Ross Englert Ms.

Caruso Due: 2/16/12 Historical Inquiry Paper The History of the Great Recession In December of 2007, right before President Bush was about to leave office, the United States was hit hard by an event that will impact the current generation for many years. The elections were coming to an end and the battle between Candidate Barack Obama and Candidate John McCain was on the final stretch to the finish line with Barack Obama head by a couple inches. The elections were intense but once over, the winner, our current President Barack Obama did not know what he had in store for him. Both candidates had great intentions for America to pick up after George Bushs little miscues however an unexpected crash in the market occurred. This was the start to the Great Recession. A recession is a decline in economic activity. It is a period shorter than a depression, during which there is a decline in economic trade and prosperity. With the stock market crashing, it deserved more than just the title the recession. Scientist, political figures, congress, bankers, and so on knew this was a very serious ordeal that wasnt something you could just fix in a day or two. This would take years to repair. Many people suffered from the happenings and in a result many people lost their jobs, houses, possessions, family, and many other important assets in their lives. (Islam, Iyanatul, and Sher Verick) Three main reasons would be: an unhealthy stock market, growing unemployment, and a slump in personal income. The biggest and most well known problem that sparked the Great Recession would be the crash of the stock market. So much went wrong that its tough to decide where it all began. In early October of 2008, Dow Jones took a dive for the worst. Dow had record setting numbers across the board with the

main one being net loss. This is where researchers, scientists, observers, political figures and so on have stated the beginning of the Great Recession. With Dow taking its worst hit since being established, the stock market came to a startling halt and crashed. Dow Jones numbers affected majority of banks making business seem impossible. JP Morgan and Wachovia had the hardest time when Dow went down causing Wall Street to become an absolute mess. (Twin) Unemployment shot up to a record high in the past 4 years. Many states set records during the Great Recession for unemployment rates. (Rugaber) For a couple of examples, Vermont went from a record low of 3.8 in 2000 to a whopping 14.4 10 years later in September of 2010. Also our very own North Carolina had its most successful years in 1999 with the unemployment rate at 3.1 however 2 years ago in February of 2010 NC set a record high of 11.2 with the unemployment rate. NC has dropped down to a 9.6 now however its still one of the highest numbers amongst the states. Numbers like this are very scary to look at. Whats even scarier There are around 300,000,000 current US citizens. 15,000,000 of that number are currently unemployed. 6,200,000 of that number have been unemployed for half a year, only 27 weeks. 1,400,000 of the 15 million have been unemployed for 2 years (Focus). When the market crashed, many companies were forced to go out of business. Some were saved by merging with other companies and the best example of that would be Wachovia, a huge bank in 2006 and 2007 that was forced to merge with Wells Fargo or they wouldve gone out of business. A merger is the combining of companies. This saved many businesses from going completely out of business however, in the long run, they were bought out by another company so everyone had to adapt to new jobs, new locations, and so on. If were lucky enough to keep your job it, didnt mean you had an advantage on anyone. (Holder) Although the goal was to keep your job, majority of people had their paychecks get cut down dramatically. Businesses had to reduce pay to stay in business. Even though they had jobs, they were

working for a lot less. With this, many people had to downsize on their ideas. Foreclosures starting popping up around every corner and many families had to downsize to smaller homes to keep from going complete bankrupt. This also affected belongings such as cars, boats, gifts, and many other necessities in the American Dream. To other families, reduced pay paychecks had larger effects on people resulting in divorce. Around 2006, the divorce rate hit its peak. It has slowly reduced in the past couple years however that because at the beginning of the recession a lot of couples ended up filing for divorce. As you can guess this tore families apart making life even worse in the economic times for the couples, kids, family members, and even close friends. The sad thing was, all America could do was sit back and watch. Between unemployment and reduced pay checks, peoples hopes, dream, and values were all being destroyed by the Great Recession. (Schwarz) Now the bright side to all of this is that we survived. There have been many moments in history when it seems like America is going down the tubes and cant recover. In bold letters the Great Depression stands out the most. We were close to being worse economically in the Great Recession than the Great Depression however we were able to stay on our feet and get back in business. Kelly Gavins title of her online article speaks for itself in a time like this: "The Recession Is Over. The Real Pain Starts Now." A lot of economists can agree with this because we went through the one of the worst times in history yet we survived and now we must build from it. Its time to get America back on its feet. It will take years to recover from and only time will tell if we are improving or not but the scary part of it all is looking back on what it has done then looking forward and seeing how it will affect us for the years ahead. It seems like the Great Recession took the biggest hit on the middle aged generation who have had to work or fight through all of the Great Recession without any income what so ever. Most economists are starting to disagree with that now. Looking ahead, economists are predicting that the Great Recession will actually hit the youth of today harder than it hit the middle aged citizens. Its scary

to think what the US will be like years from now. Like said earlier, only time will tell. We can predict all we want however no one will know until its actually here. Perfect example: the Great Recession. Its crazy how one thing can lead to another and end up as a disaster. The importance of Dow Jones and the stock market in general has stood out over the past couple of years. Living through the Great Recession is one thing, but recovering is going to be an even bigger challenge. We have learned from past experiences how to handle a situation like this but times are different now a days. Technology, society, economics, and the way of life all have a huge impact when it comes to recovering from this disaster. The causes and effects of the Great Recession have destroyed more peoples lives than made better. That will most likely continue for years to come.