Global Financial Crisis: the American Bank Scheme
Ross Trivisonno
The U.S. government should have taken more action in strengthening the integrity and infrastructure of large investment corporations such as Lehman Brothers and Goldman Sachs, so as not to let them fall to the brink of bankruptcy--in the 2008 financial crisis.
For
Economic/Political Arguments
Subpoint 1: It is the U.S. government’s job to insure that corporations do not “dig themselves a hole” to deep to recover from.
--"The practice of calmness, of immobility, of certainty and security, suddenly breaks down," Keynes wrote. "New fears and hopes will, without warning, take charge of human conduct." This is the "herd behavior" that George Soros has identified as the dominant feature of financial markets. It is the government 's job to stabilize expectations.”
Even by being calm and secure, new fears/hopes—“stimulators”—will control human behavior. This behavior is the main feature that manipulates many markets…It is the government’s job to regulate and stabilize this.
Citation: Skidelsky, Robert. "The king is dead. Long live the king. (Comment)(BUSINESS CYCLES: TEETERING BETWEEN KEYNES AND FRIEDMAN)(Financial report)." Globe & Mail [Toronto, Canada] 16 Sept. 2008: A19. Global Issues In Context. Web. 1 Oct. 2012.
--“…Lehman Brothers was forced to seek bankruptcy protection yesterday, while an even bigger institution, Merrill Lynch, was pushed into a merger to avoid the same fate. And American International Group, the largest insurer in the United States, declared that it needs at least a $40-billion (U.S.) lifeline to shore up its deteriorating capital base and prevent credit downgrades. The U.S. government, which had earlier stepped in to salvage two battered mortgage giants, drew the line at Lehman Brothers”
Many great corporations were recently put in jeopardy—bankruptcy, forced acquisition, or worse. Our government refuses to rescue Lehman Brothers and others as it had just managed to save to other large mortgage
The U.S. government should have taken more action in strengthening the integrity and infrastructure of large investment corporations such as Lehman Brothers and Goldman Sachs, so as not to let them fall to the brink of bankruptcy--in the 2008 financial crisis.
For
Economic/Political Arguments
Subpoint 1: It is the U.S. government’s job to insure that corporations do not “dig themselves a hole” to deep to recover from.
--"The practice of calmness, of immobility, of certainty and security, suddenly breaks down," Keynes wrote. "New fears and hopes will, without warning, take charge of human conduct." This is the "herd behavior" that George Soros has identified as the dominant feature of financial markets. It is the government 's job to stabilize expectations.”
Even by being calm and secure, new fears/hopes—“stimulators”—will control human behavior. This behavior is the main feature that manipulates many markets…It is the government’s job to regulate and stabilize this.
Citation: Skidelsky, Robert. "The king is dead. Long live the king. (Comment)(BUSINESS CYCLES: TEETERING BETWEEN KEYNES AND FRIEDMAN)(Financial report)." Globe & Mail [Toronto, Canada] 16 Sept. 2008: A19. Global Issues In Context. Web. 1 Oct. 2012.
--“…Lehman Brothers was forced to seek bankruptcy protection yesterday, while an even bigger institution, Merrill Lynch, was pushed into a merger to avoid the same fate. And American International Group, the largest insurer in the United States, declared that it needs at least a $40-billion (U.S.) lifeline to shore up its deteriorating capital base and prevent credit downgrades. The U.S. government, which had earlier stepped in to salvage two battered mortgage giants, drew the line at Lehman Brothers”
Many great corporations were recently put in jeopardy—bankruptcy, forced acquisition, or worse. Our government refuses to rescue Lehman Brothers and others as it had just managed to save to other large mortgage
Citations: Carney, John. "Crash of the Titans: Merrill Lynch 's salvation spelled Lehman Brothers ' doom." The American Conservative 7.20 (2008): 10+. Global Issues In Context. Web. 4 Oct. 2012. Social/Cultural Arguments Subpoint 1: Even though the culture was not up to par, it was brought to the executives’ attention—and the company is willing to change. ““It was, said Edward Hill-Wood, executive director of Morgan Stanley 's European media team, "one of the clearest, most thought-provoking insights we have seen, so we published it". This says a lot about the stuff produced by the grown-ups at Morgan Stanley.”” “It was one of the most direct, concise, and stimulating internal views we have ever been exposed to”, said Morgan Stanley’s European media team director—Edward Hill-Wood. Citation: "CITY investment bank Morgan Stanley [...]." Evening Standard [London, England] 14 July 2009: 13. Global Issues In Context. Web. 5 Oct. 2012.