December 10, 2018, on what was the tenth anniversary since the declaration of the 2008 Recession, HBO collaborated with VICE News and aired the Panic: The Untold Story of the 2008 Financial Crisis documentary. Having been inundated with many 2-minute promotional video clips for months, I was more than prepared to be entertained. Moreover, given my expansive background in finance, as well as my current role as a financial literacy instructor (and blogger), I was emotionally prepared to reflect upon the 2008 fiscal meltdown and how it hit close to home for myself and millions worldwide. As such, I viewed the documentary from three pivotal perspectives: a student (physically obtaining my B.A. in Economics and becoming a life-long learner of the topic), an activist (using my knowledge to doggedly advocate for the 99% as the economy crumbled before our eyes), and as a pawn (my knowledge could not spare me from the reality that my funds were being used to roll out the Troubled Asset Relief Program) . As a result of the financial crisis, once bright-eyed and eager college students, myself included, transformed into anxious, pessimistic graduates who would forever be affected by the near collapse of the world’s market. Such a catastrophe also meant there would be scarce employment opportunities, especially for the classes of 2009, 2010, and 2011.
So, where did the documentary begin in trying to make sense of the past decade? Corrupt housing practices dating back to 1970. From movies such as “The Big Short” to Michael Moore’s “Capitalism: A Love Story”, the housing market has been thoroughly analyzed, with its predatory practices picked apart. To give added analyses, and reflect on their role throughout the crisis, Ben Bernanke, George W. Bush, Michelle Davis, Jamie Dimon, Barney Frank, Timothy Geithner, John Macks, Barack Obama, Nancy Pelosi, and Warren Buffet were the keys to piecing the past decade together. Although at times their commentary did little to answer the burning questions, and more to absolve themselves of wrongdoing and wrong decision-making, one theme was consistent: we knew the housing bubble was sure to burst and we did nothing to keep the effects minimal. Thus, Fannie Mae and Freddie Mac were highlighted throughout the program and lambasted for their unscrupulous practices which included allowing lenders to give homeowners “liar loans” (borrowers state their income, which is taken at their word void of additional research), which falls under the category of predatory lending. Because of Fannie and Freddie’s work, millions of North Americans rode a dangerous rollercoaster. First, these individuals experienced an uphill rush of being able to buy a 4-bedroom home, at the lowest price, then ultimately bought two more house to flip, thus tripling their profits. Then, consequently, these homeowners took to the deep plunge into financial ruin when housing prices fell so low that banks raised interest rates to roughly 9.4%. Under those circumstances, commercial banks knew that these homeowners would never be able to repay their debt, hence foreclosures skyrocketed. Finally, mortgage backed assets became so toxic, institutions such as AIG, Bear Stearns, and Lehman Brothers (who all had shares of these toxic assets) met their demise when Barclays and others denied helping bail them out and so they dissolved. I held on to every statement made during the documentary, often repaying them in my head for additional clarity. However, no statements made my gears turn louder than the revelation that each policymaker knew TARP would split the nation in half and be the catalyst for populist movements, yet the bill was signed into law because the country was desperate, and Washington D.C. refused to repeat the high unemployment rate and starvation of the Great Depression of 1929. What I found fascinating was that minimal commentary was made towards Bernie Madoff and the massive Ponzi scheme that added insult to injury. Tuesday, December 11, 2018, marked a decade since the arrest of Bernie Madoff who was indicted on federal charges for masterminding the largest Ponzi scheme in United States history worth $65 billion dollars. Operating such a large-scale scheme, with the help of trusted employees, Madoff scammed thousands of victims out of their pensions, retirement funds, and savings. Many of his victims were so distraught that they committed suicide. A decade into his 153 year sentence, Madoff has been the subject of countless articles, books, and a television movie (The Wizard of Lies) that aired on HBO last May, so it was intriguing to find his role in the financial crisis glossed over. In the final analysis of the financial crisis, each person noted that the current political climate is a direct result of the crisis. Essentially, in the poignant words of Hank Paulson, “crises breeds populism.” North Americans who felt robbed by the federal government and the passage of TARP grew to distrust the government and wanted change. Thus, in 2016, change for these individuals came in the form of a billionaire who not only “understands” the plight of the poor, but poverty as a whole. By and large, the dialogues had expressed the sentiment that Wall Street continues feel the ire of Main Street and the necessary work to begin mending broken fences will take a lifetime or two.
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