Capitalism a love story answers

Capitalism: A Love Story

Please write a three paragraph summary due next week regarding either the documentary "Inside Job" or "Capitalism: A Love Story." Discuss the financial crisis and how the current state of capitalism impacted average Americans. Further, do you believe that there still is a middle class in the U.S.? Be sure to consider the difference between positive and normative economics; that is what is versus what should be with respect to the differences between the films.

The financial crisis of 2008 was the biggest crisis and recession after the Great Depression of 1929. Though there were few other recessions in between (July 1981 – November 1982: 14 months; July 1990 – March 1991: 8 months and March 2001 – November 2001: 8 months) before the 08’s recession but the 08’s recession was the biggest as well as the longest and caused much more damage in terms of 8.8 million jobs lost, according to the Bureau of Labor Statistics, only in USA. The main cause of such a tremendous effect was basically the “greed” of Wall Street financial bodies. Almost all of the Board members of the most important institutions tried to make as much profit as possible in exchange of the security and money of a common citizen. Whereas the common citizens and retirees lost their savings these “corporate goons” fattened their wallets.

They lobbied and spend a huge amount (5 billion dollar on few years only for lobbying) not only to affect the political situation in Washington but they also “bribed” the educators and researchers to make the circumstances in their favor. That was also fueled by the Ex-board members of top financial institutions who served as the government authority to control the regulations. Instead of controlling the situations for a common good they worked in favor of the corporate and due to that the US taxpayers had to spend on corporate spending. The “AIG” itself was saved by the US Government which cost 160 billion dollars of taxpayers’ money. Even then these “ex-board member-current-government-authority” played in such a way that AIG can’t sue the actual goons for this crime. The corporates also made sure that no regulations were formed on their high profitable areas like “Derivative” market. Also eliminating the “Leverage Ratio” limit caused a drastic change where the companies borrowed almost 33 times their own asset. The government should have taken control of the situation by putting appropriate regulations and by limiting the leverage ratio what they didn’t. The credit rating systems which also caused an important role in this crisis played freely which should have controlled by the proper authority. By doing proper audits as we as taking proper steps to the corporates and their CEO and board members the government could have saved lots of million dollars of the taxpayers’ money. Whereas the CEOs, board members and all companies went without a charge. Some of them even got a huge amount of tax exemption.

And due to these circumstances an average citizen got affected the most. The pensioners and retired persons lost all their lives savings. The unemployment rate almost tripled, it went to highest in 27 years. Millions of people lost their job and a million still now are at the edge of losing. People stated to live in tents. According to the reports 1 in every 5 citizens in us are living on Food Stamps (23 million in 2013). The middle class US citizens are no more. The economy divided them into two class where the top 1% controls almost 30% of the money. And the rest spends the day somehow.