After watching this video what caught your attention most. What were some of the similarities between the Great Depression and the Financial Crisis of 2008? Has this changed your outlook on our current economic situation? How or why not?
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There are many similarities between the Great Depression and the Financial Crisis of 2008. Both were marked by soaring markets followed by devastating crashes. The Great Depression started when uncertainty arose after the government instituted a strict monetary policy in order to try to limit speculative buying of stocks that could potentially harm the economy if they failed. However, severe drought throughout the Midwest also played a major role in the failure of banks and the inability of the American economy to get back on track. The 2008 Financial Crisis also occurred after a profitable time in the markets. Lenders became greedy and made riskier and riskier transactions, similar to in the late 1920s. However, this time the government did not really take precautionary measures, and banks began to fail when investors realized most of their underlying mortgage-backed securities were practically worthless. These two events serve as cautionary tales to me on how the greed of a small amount of people can lead to the downfall of many. It is vital that Americans keep their eyes open to what happens in the economy and have a strategy in place if another crash like this were to happen again.