Thursday, August 29, 2019

Report relating to the recent financial crisis Essay

Report relating to the recent financial crisis - Essay Example A major strength in the author’s exposition is the manner in which he offers deductive analyses of situations, which makes it possible for the reader to connect the links between institutional practices and the resultant adverse effects on the American economy. In a significant sense, the author illustrates the manner in which the banking industry in America has used its immense financial resources to bankroll policies through calculated manipulation of Congress. The act of manipulation occurs through highly paid Ivy League economists and financial analysts who are paid large sums of money to give convincing but untruthful information about the matters of financial management and economic policies. As a result, it becomes appropriate to consider the fact that most of the issues raised by the author take a wide angle that connects the practices and policies of various institutions within a network that affirms the primacy of short-term financial gains over long-term policies by the corporate actors (Ferguson 44). The author makes the point that the various economic challenges facing America are derivative of the policies and practices adopted by Wall Street over the past decades. Fergusson enriches his arguments by roping in the changes in the legal framework, which have enabled private players in the economy to advance their private interests at the expense of economic growth. For instance, he cites the removal of the 1933 Glass-Steagall Act, had established and maintained some element of distinction between investment banks and commercial banks (Ferguson 51). The consequence of such actions were seen in a wide range of unethical and unprofessional business practices that included credit default swaps and other measures that had the long term effect of ruining many sectors of America’s economy. The book points out some of the major loopholes that have enabled the unethical practices to persist in the American economic environment are largely deter mined by various economic indicators that connect with the multiple issues on which the economic processes are based. In this regard, the book opens up a deep analysis of the unstable nature of the American economic systems in terms of their impact on the dependent economies. Bad corporate governance practices that thrive within the American economic system are explained in terms of non-existent of laws that would be relied upon to reign in the corporate culprits. On this particular matter, the author makes the case for the review of the current policies in the American economic sector for the purposes of instilling value and good corporate practices. Such practices, as the author argues, would shield the American economy from adverse effects such as those that were witnessed during the 2008 economic crisis. The crisis, according to Ferguson, was a culmination of years of corruption and institutionalized greed that have destabilized the American economic system and threatened the co untry’s economic power image in the world. The book offers projections about the possibilities of recurrent crises in the event that the United States does not review its policies by developing financial and economic safeguards to check against runaway corporate greed. An important aspect

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