Megan Hockingberry_Reading Response 1

The article, The 2008 Housing Crisis, argues that the cause of the 2008 financial crisis was not in fact government policies that made it more affordable to buy homes, but instead “the lack of sufficient government oversight in key areas…that transformed a housing bubble into a global financial crisis”. They argue this by providing historical background about the federal policies that support homeownership, such as the FHA, Fannie Mae, and Freddie Mac, and state that the real cause for the crisis was because of subprime lending fueled by Wall Street demand.

Similar to the previous article, Wall Street and The Financial Crisis: Anatomy of a Financial Collapse argues that high risk lending was one of the root causes of the financial crisis, but doesn’t see that as the only cause. The Senate also argues that regulatory failure, inflated credit ratings and investment bank abuses are to blame. The article makes its point with years of heavy investigation and research and case studies.

Before reading these two articles I decided to look for some visual explanations on the subject of the financial crisis to help me better understand and have a base knowledge about a very intricate problem. These two videos are The Causes and Effects of the 2008 Financial Crisis and The 2008 Financial Crisis: Crash Course Economics #12. Even after taking two economics classes and being a marketing minor, I knew little to nothing on the subject and had only been exposed to it through my parents. Both of these really helped to break down every aspect of the financial crisis and everything that affected it. I’m very much a visual learner, so I knew that I needed something more than just the articles to help me better understand the subject.

After taking in all these sources of information (and feeling very overwhelmed by all the dizzying information provided) it seems to me that the cause of the 2008 financial crisis was in fact the subprime, risky lending fueled by Wall Street, a subject that both articles covered and thought were root causes. I also think its important not to overlook our capitalist government and how that has played a role, or lack thereof. With the government giving inaccurate rating to banks and investors that were executing poor practices, they have allowed for Wall Street to grow off the backs of the American people.