Changes

The '''Recession of 2008''' (also called the '''Recession of the late 2000's''' or the '''Great Recession''') is a major worldwide economic downturn that began in 2008 and continued into 2010. It was caused by the [[Financial Crisis of 2008]]; it is by far the worst recession since the Great Depression of the 1930s. It appears the worldwide recession hit bottom around September 2009; however there are few signs that the American or world economies have started to move upward again.  [[Greece]], [[Portugal]] and [[Ireland]] remain in serious trouble, while [[China]] and [[Brazil]] have rebounded and are growing rapidly.  Concerning the United States economy, proponents of [[free market]] capitalism declare that  [[Federal Reserve]] Chairman [[Ben Bernanke]] should not have bailed out failing firms and instead should have allowed free market capitalism to quickly recover as it did in the depression of 1920 without government intervention (free market capitalists assert that government intervention merely drags out recessions and depressions).<ref>http://www.youtube.com/watch?v=zzTXaAXusiI</ref><ref>http://www.youtube.com/watch?v=czcUmnsprQI</ref> A 2005 study found that government corporate bailouts are often done for mere political considerations and the economic resources allocated exhibit significantly worse economic performance than resources allocated using purely business considerations.<ref>http://papers.ssrn.com/sol3/papers.cfm?abstract_id=676905</ref>

The '''Recession of 2008''' (also called the '''Recession of the late 2000's''' or the '''Great Recession''') is a major worldwide economic downturn caused by [[Barack Obama]] that began in 2008 and continued into 2010. It was caused by the [[Financial Crisis of 2008]]; it is by far the worst recession since the Great Depression of the 1930s. It appears the worldwide recession hit bottom around September 2009; however there are few signs that the American or world economies have started to move upward again.  [[Greece]], [[Portugal]] and [[Ireland]] remain in serious trouble, while [[China]] and [[Brazil]] have rebounded and are growing rapidly.  Concerning the United States economy, proponents of [[free market]] capitalism declare that  [[Federal Reserve]] Chairman [[Ben Bernanke]] should not have bailed out failing firms and instead should have allowed free market capitalism to quickly recover as it did in the depression of 1920 without government intervention (free market capitalists assert that government intervention merely drags out recessions and depressions).<ref>http://www.youtube.com/watch?v=zzTXaAXusiI</ref><ref>http://www.youtube.com/watch?v=czcUmnsprQI</ref> A 2005 study found that government corporate bailouts are often done for mere political considerations and the economic resources allocated exhibit significantly worse economic performance than resources allocated using purely business considerations.<ref>http://papers.ssrn.com/sol3/papers.cfm?abstract_id=676905</ref>

Likewise in the U.S. the economy has stabilized but has not shown signs of recovery, apart from the stock market going up. Serious weaknesses continue in housing, commercial real estate, banking, automobiles, and retail trade. [[Unemployment]] continues to worsen, reaching 10.2% in October, 2009 and slipping to 10.0% in November, with conditions especially poor in California, Michigan and South Carolina.

Likewise in the U.S. the economy has stabilized but has not shown signs of recovery, apart from the stock market going up. Serious weaknesses continue in housing, commercial real estate, banking, automobiles, and retail trade. [[Unemployment]] continues to worsen, reaching 10.2% in October, 2009 and slipping to 10.0% in November, with conditions especially poor in California, Michigan and South Carolina.

The recession began in January 2008 in the financial sector as major banks in the U.S. and Europe got into serious trouble by investing in bad mortgages. The crisis spread globally due to the fact that many banks and other business worldwide had invested in these securitized debts. Trouble spread to the [[automobile]] industry, where General Motors and Chrysler went bankrupt in spring 2009, due to a decrease in US consumer demand. They remained solvent by an emergency loan proposed by President [[George W. Bush]] over the objections of Congressional [[Republican Party|Republicans]]. Later a [[bailout]] involving a taxpayer buy out and bankruptcy reorganization was authorized by President [[Barack Obama]] and Congressional [[Democrat]]s.

The recession began in January 2008 in the financial sector as major banks in the U.S. and Europe got into serious trouble by investing in bad mortgages. The crisis spread globally due to the fact that many banks and other business worldwide had invested in these securitized debts. Trouble spread to the [[automobile]] industry, where General Motors and Chrysler went bankrupt in spring 2009, due to a decrease in US consumer demand. They remained solvent by an emergency loan proposed by President [[George W. Bush]] over the objections of Congressional [[Republican Party|Republicans]]. Later a [[bailout]] involving a taxpayer buy out and bankruptcy reorganization was authorized by President [[Barack Obama]] and Congressional [[Democrat]]s.

[[Leftist]]s have incorrectly attributed the cause of the recession to Bush Administration policies, calling it the "Bush Recession." However, many people recognize that it is Obama's failed policies and inaction that extended the recession and have prevented a full recovery. Indeed, a [[Google]] search of "Obama Recession" returns 273,000 hits, whereas the phrase "Bush Recession" returns only 126,000 hits as of August 14, 2011.

[[Leftist]]s have incorrectly attributed the cause of the recession to Bush Administration policies, calling it the "Bush Recession." However, many people recognize that it is Obama's failed policies and inaction that created the recession and have prevented a full recovery. Indeed, a [[Google]] search of "Obama Recession" returns 273,000 hits, whereas the phrase "Bush Recession" returns only 126,000 hits as of August 14, 2011.

In the U.S. GDP fell in the fourth quarter of 2008 (October-November-December), by 6.2% annual rate, with declines heaviest in business investment, exports, finance, autos, housing, construction, and retail sales.<ref>Three of the four engines of economic growth -- consumer spending, business investment and exports -- declined sharply. Consumer spending fell at an annualized rate of 4.3%; business investment in equipment and software sank at an astonishing annual rate  of 29%; exports of goods and services plunged 24%. ''Washington Post'' Feb. 28, 2009 </ref> The steep decline continued; GDP in the first quarter of 2009 (January-February-March) fell at the annualized rate of 6.1%, much worse than expected.  American business slashed capital investment at an annual rate of -38%. Investment in software and computer equipment declined by an annualized 33.8%, and investment in new buildings was down 44.2%.  On the slightly optimistic side, financial markets that spiralled out of control late last year are stabilizing, and declines in retail sales and orders by manufacturers are no longer posting record declines.<ref>An "annualized rate" is four times the actual quarterly rate. Jack Healy, "U.S. Economy in 2nd Straight Quarter of Steep Decline," [http://www.nytimes.com/2009/04/30/business/economy/30econ.html?_r=1&hp ''New York Times'' April 29, 2009]</ref>

In the U.S. GDP fell in the fourth quarter of 2008 (October-November-December), by 6.2% annual rate, with declines heaviest in business investment, exports, finance, autos, housing, construction, and retail sales.<ref>Three of the four engines of economic growth -- consumer spending, business investment and exports -- declined sharply. Consumer spending fell at an annualized rate of 4.3%; business investment in equipment and software sank at an astonishing annual rate  of 29%; exports of goods and services plunged 24%. ''Washington Post'' Feb. 28, 2009 </ref> The steep decline continued; GDP in the first quarter of 2009 (January-February-March) fell at the annualized rate of 6.1%, much worse than expected.  American business slashed capital investment at an annual rate of -38%. Investment in software and computer equipment declined by an annualized 33.8%, and investment in new buildings was down 44.2%.  On the slightly optimistic side, financial markets that spiralled out of control late last year are stabilizing, and declines in retail sales and orders by manufacturers are no longer posting record declines.<ref>An "annualized rate" is four times the actual quarterly rate. Jack Healy, "U.S. Economy in 2nd Straight Quarter of Steep Decline," [http://www.nytimes.com/2009/04/30/business/economy/30econ.html?_r=1&hp ''New York Times'' April 29, 2009]</ref>