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When The Music Stops Analysis

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Brett Krosschell Blinder Analyzation Blinder’s book, When the Music Stops, does a great job of explain what took place in all aspects of the 2008 recession. There were a lot of shocking news and events that were unknown to others during the time, but also to me. For example, the lack of morals and responsibility that took place during this past recession. Investors and companies bet on Mortgage-Backed-Securities and not only that, but companies tried to make more profit by ensuring them in case of default. Also the fact that AIG not only insured the claims but acted irresponsible in the sense that they did not set aside the necessary capital to pay out in case of these policies failing. Blinder talks about these types of players …show more content…
There is clear evidence linking recoveries that do nothing to help the economy in times of need has proven to be much worse than helping them. However, even when it does make sense to use the policies for stimulation, such as in 2008 there were no repercussions only rules changed in order to prevent reoccurring events. Businesses that made poor decisions were not held responsible or reprimanded for the actions and deals they had committed, not to mention that they were not required to pay back the bailout money. Without a form of punishment there is no change taking place as we move forward with a stronger and more consolidated economy. If there were repercussions, they should not follow right after the recession, but make companies receive the punishment in about 5 years later. This could possibly removal moral hazard form the equation but at the least reduce the …show more content…
We are also instructed to not worry about tomorrow, which seems more classical, however that doesn’t mean do nothing that means focusing on what needs to be done today. It may be impossible to say that the policies were missed used, because not simulating would have caused more problems. In the story of human salvation the sinner is forgiven, but that does not erase the sin without something taking its place. Obama’s administration gave taxpayer money to automotive and banking industries, which was a clear need in order to stabilize our economy. This went through without having anyone take the punishment besides the taxpayers. This is unjust and also unwise as it could have helped combat the nation’s growing national debt. The public would have seen it as a loan or short term stimulation rather than a free gift, which what many of the corporations used the bail-outs

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