2009+World+History+Final+Project+D+Ashley

SHOULD WE HAVE BAILED OUT THE BANKS?

// During the Current Financial Crisis //

**OKAY.** ........... Most people have heard that the economy is not in good condition. Words are being throw around such as " **recession** ", " **crisis** ", " **world banks** " and, "bailout ."



**WHAT IS A BAILOUT?** According to the Webster's Dictionary, a bailout is: [noun] "the act of rescuing from financial crisis. " (Webster's New World College Dictionary, Fourth Edition, 48) So during the Financial Crisis the **banks** and other **financial** institutions were going bankrupt so the **government** paid them some money to help them out. (700 billion) to be exact. And this is just America.
 * $700,000,000,000 **

If you can't get that number into perspective, with that money we could have: - Paid off the debt of the 49 poorest countries. **Twice**. - Eradicated **all world poverty** (1 dollar a day at least) for two years (Kinsella, Stephen "What is the opportunity cost of the bailout?") - Given every American 2000 dollars - Bought **3,004,291,845** pairs of True Religion Jeans :)

WAS IT WORTH IT? Was it worth taking money from the taxpayers to let the banks off? Here we will be looking at whether we should have given that money to the banks or put it to a better use, and what that use would be.

In order to assess this we will first be looking at the bailout of America and discussing its pros and cons - since it is easier to do a case study on a specific country, then applying this to the rest of the world to see why this really was a global crisis.

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1. **THE CAUSES:** How did we get into this mess in the first place?

2. **WHAT HAPPENED** : What did the governments propose we do?

3. **THE CONS:** What is bad about the bailout?

4. **THE PROS**: What is good about the bailout?

5. **FINAL JUDGMENT**: So what should we have done?

6. **WHY IS THIS A GLOBAL ISSUE?**

Extra: [|THE BAILOUT GAME]

__SUMMARY__
 * The bailout occurred because of the **subprime mortgage crisis**
 * The subprime mortgage crisis caused the American Stock Market to plummet and sent the US economy into a **recession**
 * This in turn affected the entire **world** economy
 * Affected nations decided to **bailout** the banks - a solution proposed by George Bush.
 * Bailout is basically bad in the long run but better in the short run than the alternative
 * However it seems that the most prudent thing would have been to **let the market economy stay alive**
 * **Let the companies that should have failed fail**
 * Let the market economy regulate the consequences as opposed to government intervention which caused this problem to begin with
 * Bailout of countries in Asia, North and South America, Europe, and Africa - Global Crisis

CONCLUSION No, we should not have bailed out the banks since even though it would alleviate the economy in the short run, in the long run it would ruin it since there would be reduced efficiency and even more of crises just like this. The government will keep having to pay more and more of the taxpayers' money, and then eventually draw the line - which would mean that denying the banks bailout is being pointlessly being drawn out.


 * media type="youtube" key="R1X6RQLZtoA" height="340" width="560" ||
 * Comical video which shows the feelings that most of the consumers have towards the bailout ||

__**BIBLIOGRAPHY**__


 * Videos/Audio**:
 * "Podcast: Subprime Mortgage Crisis." __How Stuff Works.com__. 2 June 2009 .
 * "YouTube - Bailout 11: Why these CDOs could be worth nothing." __YouTube - Broadcast Yourself.__. 2 June 2009 .
 * "YouTube - Bailout 1: Liquidity vs. Solvency." __YouTube - Broadcast Yourself.__. 2 June 2009 .
 * "YouTube - Bailout 2: Book Value." __YouTube - Broadcast Yourself.__. 2 June 2009 .
 * "YouTube - Bailout 3: Book value vs. market value." __YouTube - Broadcast Yourself.__. 2 June 2009 .
 * "YouTube - Bailout 4: Mark-to-model vs. mark-to-market." __YouTube - Broadcast Yourself.__. 2 June 2009 .
 * "YouTube - Bailout 5: Paying off the debt." __YouTube - Broadcast Yourself.__. 2 June 2009 .
 * "YouTube - Bailout 8: Systemic Risk." __YouTube - Broadcast Yourself.__. 2 June 2009 .
 * "YouTube - The Dark Bailout." __YouTube - Broadcast Yourself.__. 2 June 2009 .


 * Pictures**:
 * Below:, the artist listed. "CagleCartoons.com - Search Subprime Mortgage Crisis." __CagleCartoons.com - Home__. 1 June 2009 <http://www.caglecartoons.com/search.asp>.
 * Category. "You Forgot Poland - Bush Political Cartoons." __Political Humor - Jokes Satire and Political Cartoons__. 2 June 2009 <http://politicalhumor.about.com/library/images/blbushpoland.htm>.
 * "Chart showing home prices." __Financial sense.__ 2 June 2009 <www.financialsense.com/editorials/bronson/2006/images/0907/chart10_lg.gif>.
 * "Coca-Cola - Press Center - Images Gallery - Products." __Coca-Cola: The Coca-Cola Company.__ 1 June 2009 <http://www.thecoca-colacompany.com/presscenter/imagebrands.html>.
 * "Credit Market Report: April 2006 | Piggington's Econo-Almanac | San Diego Housing Bubble News and Analysis." __Piggington's Econo-Almanac | San Diego Housing Bubble News and Analysis.__ 1 June 2009 <http://piggington.com/credit_market_report_april_2006>.
 * "ET Phone Home." __Cagle Cartoons.__ 1 June 2009 <www.caglecartoons.com/viewimage.asp?ID={3B0810B3-469C-48A5-AAC5-2314F3C9B3A0}>.
 * "Great Depresssion." __Creative Capital.__ 1 June 2009 <creativecapital.wordpress.com/2008/12/01/part-6-slouching-through-the-depression/>.
 * Hicks, Mark A.. "stick figure reading - Clip Art Gallery." __Discovery Education Classroom Resources__. 1 June 2009 <http://school.discoveryeducation.com/clipart/clip/stk-fgr5.html>.
 * Just_Playin_Dumb. "Allvoices.com - New Document Adds Fuel to AIG Fire!!!!." __Breaking News, Current Events, Latest News and World Events at allvoices.com.__ 1 June 2009 <http://www.allvoices.com/contributed-news/2788991-new-document-adds-fuel-to-aig-fire>.
 * "Plan Do Check Adjust - PDCA - The Process Improvement Cycle." __Theory of Constraints, Lean, and Six Sigma Help by Manufacturing Consulting Services, Inc.__. 1 June 2009 <http://leanmfg.com/leansigma/plan%20do%20check%20adjust%20080509.shtml>.
 * "The New (next-to-last) Term « A Teacher’s Education." __A Teacher’s Education.__ 1 June 2009 <http://teacherseducation.wordpress.com/2008/04/15/the-new-next-to-last-term/>.
 * TwitterButtons.com. " __MortgageNewsClips: Bear Stearns Section, Innovation, Recession 2, Fannie Mae, Thornburg, HomeSaver Advance Loan, John Mauldin, Morgan Snyder, Countrywide, Creative Solution, Expanding FHA, Ira Finds 4." Mortgage News Clips — Mortgage Industry News__. 1 June 2009 <http://mortgagenewsclips.com/2008/03/18/mortgagenewsclips-bear-stearns-section-innovation-recession-2-fannie-mae-thornburg-homesaver-advance-loan-john-mauldin-morgan-snyder-countrywide-creative-solution-expanding-fha-ira-finds-4/>.
 * "What Do Sub-Prime Borrowers Look Like? : The Deets." __The Deets__. 2 June 2009 <http://www.thedeets.com/2009/02/24/what-do-sub-prime-borrowers-look-like/>.


 * Websites**:
 * Bremmer, Charles, and David Charter. "Germany and France lead 1 billion bailout." __Times online__. 1 June 2009 <business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4937516.ece>.
 * Carney, John. "Warren Buffett Explains How The Bailout Is Crushing Healthy Companies." __The Business Insider__. 1 June 2009 <http://www.businessinsider.com/warren-buffett-explains-how-the-bailout-is-crushing-healthy-companies-2009-3>.
 * "Chapter 11 bankruptcy - what is it?." __Bankruptcy Law__ __ Lawyers, Attorneys, & Free Legal Information__ . 1 June 2009 <http://bankruptcy-law.freeadvice.com/bankruptcy-law/eleventh_chapter.htm>.
 * "Chapter 7 bankruptcy - what is it?." __Bankruptcy Law__ __ Lawyers, Attorneys, & Free Legal Information__ . 1 June 2009 <http://bankruptcy-law.freeadvice.com/bankruptcy-law/seventh_chapter.htm>.
 * "Commercial Banks." __Quanda encyclopedia__. 1 June 2009 <http://qanda.encyclopedia.com/question/commercial-banks-115016.html>.
 * Daniel. "GM is a great example of incompetent capital management. | Investment Watch." __Investment Watch; Emerging markets. Real Estate, Personal finance. Business management. Politics, Economics__. 1 June 2009 <http:// investment-blog.net/gm-is-a-great-example-of-incompetent-capital-management/>
 * Doyle, Paula. " Bailout: 'The right thing to do,' say business professors ." __The Tidings Online | Official Newspaper of the Los Angeles Archdiocese__. 1 June 2009 <http://www.the-tidings.com/2008/101008/bailout.htm>.
 * Esson, Yvette. "AIG sued over claims of inflated salaries - Telegraph." __Telegraph.co.uk: news, business, sport, the Daily Telegraph newspaper, Sunday Telegraph - Telegraph__. 1 June 2009 <http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/insurance/5095995/AIG-sued-over-claims-of-inflated-salaries.html>.
 * "Foreclosed Homes Foreclosures For Sale Foreclosure Listings Search." __Foreclosed Homes Foreclosures For Sale Foreclosure Listings Search__. 1 June 2009 <http://www.e-foreclosuresearch.com/>.
 * Kinsella, Stephen. "What is the opportunity cost of the bailout?" __Stephen Kinsella__. 6 June 2009 <http://www.stephenkinsella.net/2008/10/02/what-is-the-opportunity-cost-of-the-bailout/>.
 * Mahoney, Tim. "AIG - Executives Busted for Spending $90k on Private Jet for Hunting Trip in England! - Tim Mahoney - Zimbio." __Zimbio - Interactive Magazine__. 1 June 2009 <http://www.zimbio.com/Tim+Mahoney/articles/9/AIG+Executives+Busted+Spending+90k+Private>.
 * Miron, Jeffery A.. "Commentary: Bankruptcy, not bailout, is the right answer - CNN.com." __CNN.com - Breaking News, U.S., World, Weather, Entertainment & Video News__. 1 June 2009 <http://www.cnn.com/2008/POLITICS/09/29/miron.bailout/>.
 * Press trust, of india. "Global bailout packages near 3 trillion." __Hindustan times__. 1 June 2009 <www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName=&id=2ebe97d8-fe56-4541-804b-42b815c23688&MatchID1=4813&TeamID1=6&TeamID2=1&MatchType1=1&SeriesID1=1212&PrimaryID=4813&Headline=Global+bailout+packages+near+%24+3+trillion>.
 * Tim, Mahoney. "AIG - Executives Busted for Spending $90k on Private Jet for Hunting Trip in England! - Tim Mahoney - Zimbio." __Zimbio - Interactive Magazine__. 1 June 2009 <http://www.zimbio.com/Tim+Mahoney/articles/9/AIG+Executives+Busted+Spending+90k+Private>.
 * Turner, Rebecca. "What Is The Federal Reserve? A History of The US Central Banking System." __Taxes | Suite101.com__. 1 June 2009 <http://taxes.suite101.com/article.cfm/what_is_the_federal_reserve>.
 * Webster, Philip. " Video: Brown calls for increase in IMF's global bailout fund - Times Online ." __Business News, Market and Financial News | Times Online Business__ . 1 June 2009 <http://business.timesonline.co.uk/tol/business/economics/article5030421.ece>.
 * Webster, Philip. " Video: Brown calls for increase in IMF's global bailout fund - Times Online ." __Business News, Market and Financial News | Times Online Business__ . 1 June 2009 <http://business.timesonline.co.uk/tol/business/economics/article5030421.ece>.
 * "What is Investment Banking?." __wiseGEEK: clear answers for common questions__. 1 June 2009 <http://www.wisegeek.com/what-is-investment-banking.htm>.
 * "What is the IMF?." __wiseGEEK: clear answers for common questions__. 2 June 2009 <http://www.wisegeek.com/what-is-the-imf.htm>.
 * Wilkinson, John. "Bank of England bailout." __Money management__. 1 June 2009 <http://www.moneymanagement.com.au/article/Bank-of-England-bailout/221835.aspx>.

Textbook: Printed book: <span style="line-height: 19px; font-size: 12.1px; font-family: Arial,Helvetica,sans-serif;"> <span style="line-height: 19px; font-size: 11px; font-family: Arial,Helvetica,sans-serif;">
 * Print Sources**
 * Boyes, William, and Michael Melvin. __Fundamentals of Economics Fourth Edition__. Boston: Houghton Mifflin Company, 2008.
 * Ritholtz, Barry. __Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy__. New York, NY: Wiley, 2009.
 * __Webster's New World College Dictionary, Fourth Edition__. New York: Webster's New World, 2004

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