The Causes and Effects of The Financial Crisis

Financial collapses are always scary and catastrophic events. It’s even worse when barley after a decade has passed since the last one, experts are already saying that another one is imminent. Michael Sandel, is a very interesting political philosopher and the author of the book “Justice”. Chris Hedges is an award-winning journalist and the author “The Coming Collapse”. Both essays intelligently discuss the causes and effects of the financial crisis but with key differences in what they focus on specifically based on their opinion and point of view toward the subject. While Sandel’s essay is more of a philosophical argument, Hedges’s essay is more practical since it goes more in depth on finding ways to prevent this from happening again.

The arguments in Justice start off by explaining the cause of the financial crisis and the actions by congress that followed soon after. Congress had no other option but to bail out the banks and financial institutions with $700 billion, they had grown so much and so entwined with the economy that their collapse could bring down the entire financial system. Soon after, news surfaced about companies who had been bailed out, were now giving out millions of dollars in executive bonuses with that money. Then came the outrage and the discussion about why that was wrong and unjust. Sandel presented two arguments regarding the reason for the people’s outrage. One was about greed and the other about failure. Failure was the most accurate one, claiming that it was because “a failed job shouldn’t be rewarded”, since that is the exact opposite of the American dream.

Hedge’s article begins with explaining how he thinks the country got to how it is nowadays. Blaming the failed political system which he states is “dominated by corporate power and the mandarins of the two major political parties, in which we don’t count”. He claims that Trump is the result of that. He goes on to criticize the Democratic Party by accusing them of refusing to address the social inequality i, not fighting to pay workers a living wage, not getting corporate and dark money out of politics, and instead, playing to the margins by focusing on narrow cultural issues. Hedges says that is how Trump got to where he is, by tapping into the hatred people have for the media and a political system that has backstabbed them. He states that “this will soon be compounded by financial collapse”. The claim followed up by referencing to the 2008 financial crisis, how the money in bail outs have almost zero percent interest, and how the money has been used for executive compensation. It’s pointed out how that the system is designed so people can never be free from debt. Followed by saying that the next financial crisis will be even worse because this time there won’t be a backup plan. He concludes his article by advising ordinary people to invest in parallel institutions and several other ways to prevent the next crisis from ruining their lives, and telling them to “get ready” because he knows the warning signs.

I found that Sandel’s essay had some very interesting philosophical points, but I believe that in all the philosophical talk, he went too far and missed, in part, the source for all the outrage caused by the collapse. I think Sandel with wanting to understand the deeper meaning of it all got lost in the morality aspect and the theory of what is American Dream. I concluded that people were pissed off most at the fact that the millions in bonuses given to executives who were in part responsible for the collapse, came from the tax money of the same people they screwed over. Rather than being upset about executives getting millions in pay for “a failed job” which was Sandel’s conclusion. This was personal issue for the everyday man who was affected by the collapse, the guy who screwed him was now getting paid for it with the money he paid in taxes. That is what I think makes it so outrageous, and what made the average joy feel like he was being screwed twice over by the same group of people.

After reading Hedges’s essay I found that it presents our current situation very pessimistically. I agree with most of what he said and discussed in the article, but thought the gravity of the situation was the exaggerated. I think there is a silver lining in a lot of the current situations talked about that weren’t addressed. For example with Trump, I agree with most of the statement about him, but that doesn’t take into account the good he’s done, like with ISIS, he basically evaporated that terrorist group from existence, but that isn’t talked about. I think if there would have been a contrast between the good and the awful aspects of the current situation, and then suggested actions to counteract the awful, it would’ve had a better effect.