The web of the global economy, at the center of which lies the United States, is affected by each vibration of even the most picayune strand. Much like a real spider’s web, al threads, notwithstanding their size, affect the frequency at which the web quivers. When a superpower such as the United States falters, the entire structure collapses. In 2008, this is precisely what happened when the fiber surrounding the housing market was stretched past its breaking point.
The Occupy Wall Street movement of 2011 was ignited in part by the American financial crisis of 008, the course of which was elaborated upon in the documentary Inside Job. As Inside Job clearly outlines, corruption in the economic system of America is easy to spot even with minimal investigation. Policies established in the Nixon era and lasting through the following forty years have produced a laissez-fairer economy where the largest corporations have the most say not only in the economy, but also in the government.
Without regulations, inspections, or investigations being imposed on these companies, they were free to do whatever they wished with absolutely no consequences. This freedom, of course, opened a Pander’s Box of greed and corruption. When left to its own devices, the baking system dissolved into chaos and immorality. This deregulation was caused in part by the inability of regulators to “keep up” with the ever-changing system of derivatives.
These derivatives are unlike any other, more concrete economic transactions, in that there is no shift in property, so the individual betting on the derivative does not actually own a portion of the baser good. Derivatives do, however, allow risk related prices to be transferred from one party to another. During the asses, derivatives became increasingly popular and companies began speculating both for and against derivatives sold by their competition much in the way they handled credit default swaps.
With so much confusion, complexity, and a predominantly conservative era, the economy was in for a period of vast deregulation, most poignantly seen in the housing market. The most obvious cause of the economic collapse was the bursting o the mortgage bubble, In the years prior to the financial collapse, investment banks, primarily I the business of large loans, took on an enormous number of sub-prime mortgages. Mortgages are given this moniker when the borrowers are assessed to have a high risk, most often due to a poor credit score or have a history of making late payments.
In a sub-prime mortgage, the interest rates are higher than that of a more stable loan to compensate the lender for taking on the risk The risk was compounded by the practice AT moroseness Drowning Manley percent or more on tenet payment, Glenn them little to no incentive not to default on the loan. The process of characterization was reintroduced, a practice that pools loans into debt that can be transferred teen parties, and more and more collateralized debt obligations, or Cods, were created. These Cods were composed of many loans clumped together and sold to investors.
The loans that made up a COD were mainly sub-prime mortgages with a few stable loans thrown in to entice buyers. Investment banks paid rating agencies to rate the Cods; the higher rating, the more popular it was and the more money it yielded for the investment banks. The near absolute deregulation of banks meant two things: one, that investment banks took on as many sub-prime mortgages as they could and piled them into Cods, and two, that rating agencies, which were paid by the investment banks whose loans they were rating, rigged the ratings to make as much money as possible.
This meant sub-prime mortgages were given “triple A” ratings; the highest rating possible. These high risk loans were being mislabel as stable, secure mortgages. The investment banks knew they would collapse but continued the practice anyway to receive the short-terms payoff. Reprehensible actions such as these artificially inflated the economy and with the government and he Securities and Exchange Commission looking the other was, the bubble that burst went the economy could not keep up triggered an apocalyptic financial crisis. The bottom fell out of the entire operation before citizens or investors knew what was happening.
While the government and banks themselves had known about the impending collapse, the shareholders were left in the dark as they trustingly invested their money in Cods that were destined to go bad. As millions lost their entire life savings and retirement money, banks were getting immense bailouts from the government. Not only did the government ignore the blazing warning signs, and attach he sinking ship of the economy transform into a full scale global economic “Armageddon,” it then had the audacity to provide these banks and businesses guilty of fraudulent activity with TA-payer funded bailouts on the scale of trillions of US dollars.
Citizens were furious. The Occupy Wall Street movement was what followed a few years later, when all this information was released to the public. It protested the rise of economic deregulation, an occurrence which was proven to be enormously faulty during the 2008 financial crisis, which ultimately resulted in an enormous socio-economic gap. These “Occupiers” called for a large-scale bank reform.
Coupled with the inspiring movements of the Arab Spring revolutions in Egypt, Tunisia, and countries across Northern Africa, the Occupy Wall Street movement cropped up on September 17, 2011 in Cutting Park, demanding reform of the “corporate forces” that have corrupted the economy and the government, such as the aforementioned regulators that failed to do their Jobs, To remedy this, the Occupiers proposed a system of autonomy over a governmental system that Mr.. Grabber, a prominent anthropologist, has deemed, “democracy without a government.
Occupiers try to curb corporate Innocence In politics, a practice teen nave vowed to Elocution. Sun an extreme position has no doubt been spurred by equally extreme provocations. These protesters are largely unsatisfied with the current role of the government and wish to perform a radical overhaul to make the organization operate in a way that favors the citizens it governs. One could argue that they are merely enforcing the notion state in the Declaration of Independence that the government should derive its powers “from the consent of the governed. ” Others, however, have criticized the Wall Street event for being too socialist.
Whatever position one takes on the movement, it is clear that the roots of it are founded heavily in the discontent that developed as a result of the 2008 crash. It is not only blue collar citizens commenting on this inequality either. Stilling, a Nobel Prize economist and notable liberal, claims that the extensive economic inequality makes it difficult for the government to “engage in collective actions” to rebuild critical infrastructure. This is where the Occupiers endeavored to come in; they wished to right the imbalance between the rich and the poor.
Many Americans have “lost their faith in the country,” and the Occupiers intend to establish a more manageable socio-economic gap. Several individuals, such as prominent documentation Michael Moore, demand rearranging the spending patterns of the American government and passing legislation to ensure continued economy equity. The foundation of the Occupy Wall Street movement is rather clear. After many lost their entire life savings in the collapse of the late asses, the government asked for even more of their hard-earned money to bail out the companies that caused the downfall.
In the backlash the followed, the individuals who would later Join the Occupy movement came to the conclusion that the fundamental flaw was present in the structure of the economy, that flaw being corporations. As Inside Job markedly explained, deregulation of the economy allowed corporations to flex their influence in the market. The agendas of these companies were then let loose in a climate of near total deregulation and wreaked havoc in the global economy. Angry and looking for their compensation, Occupiers decided to protest the inclusion of corporations into he economy and the inequity that subsequently arose.
The seeds of the 2008 financial crisis were sown years, possibly even decades previously. The boom of the housing market and the questionable banking processes used to manufacture it was followed by the devastating collapse of the American and foreign banking systems. Unfortunately, the American government held a guideline for almost complete economic deregulation and did not make any move to prevent the catastrophic collapse. The end result was a country of unsatisfied citizens, some of whom banded together to form a movement to Occupy Wall Street, their goal to bring about better economic equity.