Written by Chaoran Hu
Since the economic recession, government has sent out a $700 billion bailout package to boost the economy. When the news that Obama was going to establish a “bad debt bank” to absorb the debt from banks, the economy climbed right after the news was came out. As we can see, all the up and down of DOW and Nasdaq are relatively related to the act from government. Another guess from the government is to nationalize the banks. However, this guess is not reliable because of the shortage of money. At that point, the stock gains as this guess was confirmed by Obama government.
While tracing back to the “Bush Administration”, the idea created by bush about the “ownership of society”. This idea means that home ownership is best for all the Americans. He claimed that market works best without the interference from the government. During that time, the housing prices rise. And the policies are good to the first-time and low-income buyers. As time goes by, these advantages gradually become bubble. As we can see, government is one of the biggest factors in the financial crisis. It is a double side sword in this economy recession. In another words, government is either hero, or villain in this battle. No matter government will win or not, it will eventually affect itself.
Sources:
http://www.bloomberg.com/apps/news?pid=20601087&sid=anNDLfpwdx9k&refer=home
http://www.physorg.com/news151941552.html
http://www.associatedcontent.com/article/1332137/the_financial_crisis_government_as_pg2.html?cat=9
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