The Great Recession of 2008

Position Paper

Student: Tran Dang Minh – National Economics University - Vietnam

ID: 11132577

Topic: [Economy] The most important reason that causes The Great Recession of 2008

The Great Recession, the worst worldwide financial crisis since the World War II, was happened around the beginning of the 21st century. This global issue has cast its long shadow on the economic fortunes of many countries. The first sign of the disaster was the instability in the US housing market and the crisis was finally fully blown by the end of 2007 as a surprise to many policymakers, multilateral agencies, academics and investors. The breakdown came largely, seriously damaged the global economy and the consequence was last for more than half decade. There is a lot of blame to go around for the Great Recession, some people believe that it was because of the weak points in policies of the governments, while some others are in the opinion that it was the mortgage companies and the banks’ fault. This essay will discuss about all those causes and give some extra facts about the damage of this crisis, but in my personal opinion, I believe that the governments had to take most responsibility for this global disaster.

To begin with, there were heaps of blame go to the Government, specifically the politicians. Politicians and the banks wanted deregulation of the banking and investment industries. In 1930, when the Great Depression occurred, regulation called the Glass-Steagall Act went into effect that separated banking from investment. After that, in 1999, this act was repealed and completely abused with bankers, investment firms and politicians thinking that they were too smart to ever let another financial crisis happen again. Before the Great Recession began, there was a warn about what was some problems with mortgages and what about to happen, but the SEC (Securities Exchange Commission) ignored it.

Besides the governments, the mortgage companies had their role...