The great crash of 2008: causes and consequences

The article compares the Latin American debt crisis of the early 1980s to the current world economic crisis, and explains the varying outcomes of each economic downturn. The author emphasizes the importance of the Clinton-era abolition of the Glass-Steagall Act, which had separated the basic public-...

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Bibliographic Details
Published in:	The Cato journal 2010-04, Vol.30 (2), p.265-277
Main Author:	Lal, Deepak
Format:	Article
Language:	eng
Subjects:	Analysis Bailouts Balance sheets Bank assets Banking Banking industry Banking system Banks Central banks China Clearing banks Comparative economics Debts Deposit insurance Developing countries Economic aspects Economic conditions Economic Crises Economic crisis Economic decline Economic history Economic policy Economic Recession Economic stabilization Economics, International Empires Europe Financial crisis Financial institutions Forecasts and trends Gambling Goldman, Sachs & Co International International banking International finance Investment banking Keynesian theory Latin America LDCs Legislation Money center banks Mortgages Political aspects Public debt Public debts Recession Risk Risk management Subprime lending Taxpayers U.S.A Universal banking World politics
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Summary:	The article compares the Latin American debt crisis of the early 1980s to the current world economic crisis, and explains the varying outcomes of each economic downturn. The author emphasizes the importance of the Clinton-era abolition of the Glass-Steagall Act, which had separated the basic public-utility and gambling sectors of the banking industry, in making the more drastic outcomes of the current crisis possible. Theoretically, the article explains that the current crisis has led to a Hayekian recession with Fisherian consequences. The author explains how Goldman Sachs, China and India each stand to benefit from the current crisis. The article also compares the financial crisis that led to the decline of the Roman Empire and current risky financial behavior that could also lead to the fall of American power throughout the world. Kenny Cargill
ISSN:	0273-3072 1943-3468