Research Essay.
Part One:

Although not as bad as the Great Depression, in 2008 the United States entered a depression - called the Lesser Depression by some, and others refusing to call it a depression, but rather a financial crisis. Looking back, you can see that several things lead to the United States financial crisis in 2008. There's nothing there that could be classified as a sufficient condition - a single thing that would have caused the financial crisis if everything else were to have failed to have happened, but there are quite a number of necessary conditions - factors, that if they would have failed to have happened, would have either lessened or outright avoided the crisis. Many people blame Alan Greenspan, who was the Chairman of the Federal Reserve of the United States from 1987 up until 2006, for keeping interest rates too low between 2003 and 2005. During this time both the credit bubble and the real estate bubbles began to swell, before finally popping in 2008. This is generally accepted as the general reason the United States' financial crisis happened, but many arguments have been had over what else caused it.

The general consensus is that yes, there are, of course, other contributors to the crisis, which didn't directly cause it, but made it possible or worsened the already dim future of the economy. The first of these are global savings imbalances - large imbalances between savings and investment in some of the biggest countries' economies reflected in large and growing current account balances. Meaning countries such as China run large surpluses, while we here in the United States run large current amount deficits. The global savings imbalance put upward pressure on the asset prices of the United States and downward pressure on interest rates during the years the bubbles were welling. Secondly, we have the banks incredible lack of transparency with the risks they were bearing - using off-balance-sheet entities typically known as an SIV (structured investment vehicle) to hide their practices from the public eye, as well as putting too much investment into mathematical models such as the VaR (Value at Risk) and the once good, but increasingly unreliable Gaussian copula function. Thirdly, the lack of certainty the public (Main Street as well as Wall Street) had after former Treasury Secretary Hank Paulson's first reaction and words to the crisis, which were less than inspiring - and in that time, both Wall Street and Main Street needed more than just a casual shrug and a half-hearted mutter of a promising future.

You can liken the financial crisis to a child who caught the common cold, and the factors to why he caught it. The largest of the reasons, or factors, would be the allowing of the credit and real estate bubbles to swell to the proportions that they were allowed to do. When any market, lest it be real estate, credit, or arguably the most well-known of all, the dot com market's bubble gets too big because of greed and arrogance, it's going to pop. This would the presence of the virus in the air. Is it the single reason the crisis happened? No, but it certainly gave it full access to happen. The global savings imbalance is the child's immune system. Had it been in better shape, it would have had a much better chance to help the body (i.e.: the economy) repel off the virus (the financial crisis.) That's one strike against the poor child. Then, we have the banker's practices, which can be likened to a thin, ratty coat. It doesn't get the job done anymore, but little Jimmy likes it anyway. So he wears it, and wears it, because for many years, that coat kept him warm as toast. But after years of use, this coat has holes, and is no longer keeping him warm anymore, but he wears it just because he always has. And Hank Paulson? He's good old Mom, telling Jimmy that yes, he can go outside in the rain without his gloves, in that ratty old coat, no hat, and without even taking his vitamins. And Little Jimmy always does what he's allowed to get away with, and as we all know, what do you get when you go play in the rain without gloves, a hat, proper jacket, and a bad immune system? You catch a pretty mean case of the cold.

Part Two:

Now, we know the real estate bubble popped - so did the credit bubble. But what does this mean to the average layman? It means, simply, that the banks aren’t making as much money as they had been. Real estate and housing prices are lowering, banks are having to put larger interest rates on the loans they give out just to be able to recoup enough money to make a profit, and when even what members of the Occupy Movement refer to as the one percent – Wall Street - have to struggle to make a profit, things don’t exactly bode well for the everyman – Main Street.

By September of 2008, nine banks had failed. Completely bankrupt – they had actually ceased to exist. Mostly caused by the lack of strength in their residential and commercial real estate loans – the United States government issued a statement in early September, stating that late loan payments and defaults by commercial and residential developers have soared to the highest levels since the early 1990s, threatening the health of some small banks. And if by some small banks, they mean every bank. How must it have felt to have been in this period to be one of your smaller, locally owned banks? You know that there’s a financial crisis occurring, and hear people saying that the economy is going to tank back down to Great Depression levels, except without the industry boom of a World War to fix everything. And this small, locally owned bank gets to read in the newspaper one morning that Lehman Brothers, one of the biggest financing firms in the world that - had survived everything before it – Two World Wars. The Great Depression. The September 11th terrorist attacks – in an office building that they themselves operated out of. Through all this, they persevered. .They lost billion after billion, trying to sell off assets with little to no avail. Investors got nervous, and got rid of their Lehman Brothers stock, and everything snowballed until eventually what happened was the biggest bankruptcy in United States history – a bankruptcy of over six hundred and thirteen billion dollars.

Banks being forced to raise their interest margins just to make a profit of course hit Main Street hard – these were times when people needed loans to be able to keep their cars, their houses, to keep their businesses afloat as the economy began to sink. As the banks lost money, so did everyone else. The unemployment rate rose to an unprecedented 10.1% by 2009, which was the highest rate of unemployment the United States had seen since the early 1980s, and was roughly twice the unemployment rate of the country before the crisis had hit. Those who managed to keep their jobs weren’t exactly unaffected, either – the average working hours dropped to 33 hours a week. This is the lowest average on record since the government began collecting the data back in the early sixties.

One of the bigger things to get hit outside of the real estate or banking and investment circles was the automotive industry. Typically a backbone for the United States economy, the automotive industry was hit heavily during the 2008 financial crisis of The United States. People stopped buying new cars, which put stress on the automotive industry - General Motors, Chrysler, and Ford specifically. There were mass layoffs, and before all was said and done, they needed a government loan – a bailout to the tune of 17.4 billion dollars. That 17.4 billion could only do so much, and it didn’t prevent two of those companies, Chrysler and General Motors from filing for bankruptcy in early 2009. Layoffs were common, morale was low amongst the industry, and the only way to afford a new car for anyone of the Main Street variety was to get a loan from a bank of the Wall Street variety – one of the ones with jacked up interest rates that they could barely afford. It was a vicious cycle – people couldn’t afford new cars without the loans from the bank, because the automobile industry couldn’t recover and pick up the economy, and without people buying new cars, they lost profits and had to continue to make pay cuts and hourly cuts to workers.

The Occupy Movement is a movement that officially began on September 17th, 2011. The purpose of this movement is to protest against economic and social inequality. The first occupy to gain national attention was the Occupy Wall Street function – a sit-in in front of major stock branches and investment firms on Wall Street in New York City. Their motto was “We Are The 99%”, with the thought behind it being that one percent of the country controlled 99% of the country’s finances – which is more than slightly inaccurate. The protests were started by the Canadian group Adbusters by simply putting out a chain-letter via the internet, and making it go viral. People flooded into Zuccotti Park in New York City’s Wall Street district, and Occupy Wall Street began.

There have been several criticisms about the Occupy movement as a whole – one of which is just the blatant obvious question of how sitting in a park is going to get anything accomplished. Culture Jamming, which the Adbusters have been doing since the late nineties is something that usually has shockingly low results. Many have pointed out occupying a location other than Wall Street might have been more successful, such as Times Square, location of many television studios.

Other Occupy movements have sprung up across the globe, spanning various countries – from Spain to Canada to Scotland, they seem to be popping up out of nowhere, but one has to question their sincerity. Are these people there to fight for the cause that originally brought on the movement, or are they there simply because they want to look like they are something they are not? #OWS is the hash tag used on social networking site twitter to mark a topic as being related to Occupy Wall Street, and at its height was being used in one out of every 500 tweets, which is a remarkable amount considering the heavy usage of the site. Occupy Wall Street is viral. We Are The 99% is a meme. But this also comes at a price – who is genuine, and who is there simply to be there?

The Occupy movement is getting less and less attention as time goes on, and rightfully so. It was a short lived movement that looks like it will have little to no impact in the future, and will probably just go down as another failed attempt at culture jamming by the Adbusters, who had probably just used this as publicity for themselves in the first place.

Part Four:
The United States is not the only country going through a financial crisis, however. There’s also a current financial crisis in Europe, which can be compared to the United States when overviewing the entire situation. Germany is the European equivalent of Wall Street, holding all the money. Italy’s government has let its own natural resources be squandered due to its own bad governance. Greece is poor, needing assistance from its neighbors as much as possible, and several other counties (Slovenia, Slovakia, and Estonia) are learning the hard way that Main Street is inseparable from Wall Street. Unlike the United States, however, there’s a severe problem with all of this: These countries don’t share a government. They are all their own separate entities, who occasionally work together as a collective. Never mind sharing a government, these countries don’t even share a language.

Right now, with how the euro is falling, for it to survive in the long run and not just the short term, Germany, Europe's biggest economy will need to basically put on its back brace and vouch for the increasing debt of the struggling members of the continent. There have also been talks of abandoning the euro, but they are just that - talks. Any hasty retreat out from under the umbrella of the euro would cause complete and utter economic chaos - imports and exports would be locked down, lending would be put to a standstill, leading to a lot of companies going into bankruptcy. It wouldn't affect just the one country that would be pulling out; it would affect the entirety of Europe. There have been talks from some of the less-economically-important countries about doing this, but if one of the bigger countries even thought to bring it up, it could trigger a complete collapse.

But if it's such a horrible idea, why would they even consider doing such a thing? Because it's not all completely terrible. Any country that decided to disregard the euro would allow the leaders of said country to completely ignore demands from the heads of other European countries. They could simply ignore the requests to repay the debt they owe. Likening it to taking a flu shot, it would sting at first, but afterwards there would be great gain. If Greece or Portugal went back to their original currency, the cost of exporting goods would drop significantly, making it easier for companies that rely on shipping their goods elsewhere to make a profit, and thus, the economy rises. Foreign travelers would find it easier and cheaper to tour these countries, to stay in their hotels, to eat in their restaurants; their tourism industries would receive a much needed buff. And if they stay under the euro? Right now it's looking like they would have to spend the foreseeable future piggybacking off the euro, being a poor country tied to a rich one's currency.

But what does this all mean to the United States? Luckily, our exports to European countries only account for a mere 3% of the United States economy, the bigger concern is the European financial system. Banks in the United States like to say their exposure to Europe is slight, and within the margins of manageability. Experts, on the other hand, point to what happened with the Lehman Brothers. More specifically, what happened when Lehman Brothers exploded, leaving a blast zone of debtors and debtees in its wake.  Not only did they not know how much money they owed, they didn't even know who they had to pay the imaginary number to. Mass uncertainty was apparent, and the world's financial system came to a standstill - the consequences of which are still being seen today.

The banks in Europe are still holding an extremely large amount of European debt - and while the banks in the United States have been putting more and more details out there about their exposure to these banks, there's still no real certainty on who would be blamed for what debt if everything imploded. It would be Lehman Brothers: Part Deux. The good news, however, is that this is not a certainty as of yet, it's just an "if" - and "if" can sometimes be the best two letters someone can hear.

Part Five:
	In conclusion, we’ve seen what caused the economic collapse and financial crisis of 2008. We should know what to avoid in the future, in the United States, the economy is on the rise and everything is looking like tomorrow will be a better day. The economic duress of 2008 is still rippling elsewhere, however. As we’ve just went over, the next year in European finance will be an important one. Whether Greece or Portugal, two of the European countries under the most financial stress at the moment, will stay under the umbrella of the euro is yet to be seen. Their decision could ripple throughout the rest of the world, and it could be either cause a wince or a full-on flinch in economics throughout the globe, like a monetary butterfly effect.
	What happens with the Occupy movement? As of right now, it seems to be dying out. It’s dying out, getting less and less news coverage as time goes on, and to reiterate what was said earlier, culture jamming with no real plan doesn’t seem to get anything done. It just ends up being a bunch of people, some of which in silly masks, sitting around doing nothing but patting each other on the back for being part of it, which makes those who generally believe in the movement look all the less sincere.
	In terms of which way the financial future is looking, it’s hard to say for certain. As stated above, things currently look to be heading toward a brighter tomorrow, but the future is always uncertain. Any number of things could happen to prolong a full economic recovery – not just in America, but in Europe as well. An earthquake could hit again near New York, like earlier this year, and cause massive damage this time – major players, the heads of billion dollar industries could die, leaving their stocks in a disarray (although, amusingly, Apple’s stock fell more when the Rumor of Steve Jobs’ death circulated many months beforehand than when he actually passed away.) Everything is uncertain, but taking away random X factors, it seems fairly easy to say that in time, everything will be okay.