Truck drivers couldn't fill their rigs, Airlines couldn't afford to fuel up, shipping prices drove prices up on the shelf, companies started laying off people, the job market started falling in big numbers, the automobile manufacturers started losing sales and faced bankruptcies, loan defaults started piling up like a phenomena, and job losses were to blame. But the blame was a picture of home loan defaults, and not on the economy or the cost of living. How was the math accounted for the huge amounts of dollars diverted into the oil industry and out of the usual economy?
When president Bush and the republicans were in control of the government for 6 years (2000 to 2006) unemployment was 4.6%, a barrel of oil was $45 and the us treasury collected a record amount of money. Bush had a $600 billion deficit plus the banking bail out of $ 700 billion. The banking industry has paid back the bailout funds plus interest.
In 2007 the democrats took over congress and within a year unemployment went to 6%, oil shot up to $125 a barrel, gas prices were $4.oo a gallon and the housing market was crashing. President Obama was in the senate, the senate was controlled by the democrat party and Bush was a lame duck president ( the power was in congress to decide how to manage the economy).
Candidate Obama when campaigning made promises to the people who elected him to the presidency. Obama promised jobs ,fix the economy, reduce the deficit, close gitmo, end the wars, transparent government, rid Washington of lobbyists and many other things.
Jobs and the economy should have been his first priority, unemployment after 16 months is 9.7%, the economy has not rebounded and the deficit has increased 4 times more than Bush.
People are angry that the president has not fulfilled his promises. Black or white Americans do not make a difference ,we the people want him to succeed for all of the people.
search for the truth. The truth will set you free when you find the truth.
Wow......we are in parallel universes. I see the world NOTHING like you do.
It's no wonder there is no united states! You are delusional IMO.
And I think you may want to try a little truth yourself. For you to say you want Obama to succeed, is really reaching.
Based on all your other posts, I would say you want Obama out of office as soon as possible and by any means necessary...isn't that really the truth?
And excellent excellent post Jane!! Republicans will NEVER answer that one.
They will never admit what really causes all the pain and misery in this country.
And it's not Obama.
what actually caused the crash is the fact that integrity was wiped away from the dictionary of united state of America. capitalism without a human face was the in thing.
Greed caused the crash... nothing more nothing less....
People spending more than they have to get things that they cant afford...
"The banking industry has paid back the bailout funds plus interest."
Hardly. Only a few of the Banks have paid back... those who got the Press.
The current Democratic Controlled Congress is a disaster... but to even try and justify what George Bush did to this country as if they were somehow the answer to this current administration is a false economy in itself.
Bush was a disaster. Obama is a disaster.
If you want to place blame you only have to look to the Banking System and those who control it.
Blaming one side or the other politically may make everyone feel better but it will never solve the real problem which is debt. Neither side is doing anything to solve the real problems.
no, it didn't.
The cause of the crash was, at best, government intervention in the market (we're... still... building houses...), and at worse because of monetary inflation.
PS, if the latter is true, then we're really in trouble - the money supply has almost tripled in the last 10 years.
$149/barrel oil in the summer of 2008 wasn't the cause of the crash, but it probably did help trigger it. The primary ingredients of the crash had more to do with slack credit standards and Wall Street derivatives. In hindsight, too many people received easy credit who were not creditworthy. The house of cards began to implode, of course, as more and more people were unable to pay their debts. That is probably where high petroleum prices affected the crash the greatest. It sapped people's pocketbooks of any extra money and they had nothing left over with which to pay their other bills.
I don't think it caused the crash, but I think it really impacted the length and depth of the recession. The federal stimulus that went out in 2008 probably would have worked to keep us out of recession if people hadn't been panicked by the high gas prices. The same type of stimulus worked in 2002.
Since consumer spending accounts for so much of our economy, the public mindset is everything. If people feel like they can meet their needs and have a little extra - they will spend money.
When they spend money, people have jobs providing the goods that consumers want. Getting an extra grand or two, depending on how many kids you have, normally would spark some spending. But with gas prices hitting four bucks a gallon people were terrified in 2008. They socked away their extra money because their job commute had just tripled in cost.
So then the jobs went away, which eroded confidence even further...and now we're still in a downward spiral. The current stimulus has $400 a year trickling into peoples pockets through a reduction in withholding and the making work pay tax credit. Wow, I feel rich now! I get an extra eight bucks a week - I think I'll go buy a new car.
Needless to say...I don't think this round of stimulus is going to achieve the desired affect.
$149 dollar a barrel oil while it hurts is not the cause of the current economic state. There are actually many factors but one who participated in both the real estate as well as the equities market will see that levels reached were unsustainable.
For one..........the real estate market was just one big ponzi scheme. The real estate values were driving the economy. People were spending their equity. This equity was caused by both liquidity as well perceived demand. Everyone was trying to make a buck. This perpetual motion machine stopped and everything crashed. Kaboom.
The oil market is suppose to be inelastic which means it is somewhat independent of demand. If you looked at the trade and the charts oil was pushed up off a near term bottom and ran like crazy. Also of note was the time period for which the prices were high and all the gains were capitulated in a massive crash of the prices of oil. Oil was not that high that long.
Now with every thing said there are many contributory factors in the recession but real estate is numero uno. This money that was driving the economy went away when real estate no longer appreciated and it was a heck of a lot of money that basically makes high oil prices a drop in the bucket.
FOUR MAJOR FACTORS THAT CAUSED THIS RECESSION, and its severity!
30 years of outsourcing, thanks to Nafta and everybody else who shipped jobs overseas, or cheered while it was happening.
deregulation of the banking sector, most specifically the repeal of Glass steigal in 99'...led to the sub-prime crisis.
overspending by both parties that left us with 3.5 years worth of outlays in debt(14 trillion).
and of course global competition and the shift towards a service economy!
That particular oil crisis(08') was day trader induced, and bush sat there and laughed with his friends as he kept buying up oil at that high price with our money to add to the strategic supply we keep!! the effects was a bottle neck of supplies, and hence the high prices. and people staeving and rioting in many countries!
Congress is planning to introduce legislation to cut oil subsidies. For an insight to the oil subsidies check out
Former Shell CEO: Oil Companies Don't Like High Oil Prices
John Hofmeister on push to end tax breaks for oil companies
http://www.foxnews.com/on-air/your-worl … t_id=86929
The government receives a 18% royalty on each barrel of oil pumped. Oil companies were pumping 10 million barrels/day before Obama placed drilling moratoriums. Now they pump 7 million a loss of 3 million barrels/day. Not to mention the billions it cost to lease the sites.
Pumping more oil, government gets more money! So why is Obama restricting oil production in these troubled times? How about the loss JOBS?
Check out the billions Obama has invested in subsidies for the alternate fuel industry. The alternates represent only 3% of the energy in our country. WAKE UP AMERICA
Here's the deal. If the commodity exchanges would raise the amount of margin money needed to buy a contract, we would see the price of oil plummet just like silver did when they raised the margin money on it. Just goes to show that speculation is the root of all the high commodity prices. Real supply and demand is not apparent when speculation distorts the market.
by Aqeel Saeed8 years ago
It fluctuate between $ 148 per barrel to $ 33 per barrel.
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