If the Fed Had Bailed out Lehman Brothers, Would We Have Avoided the Great Recession

There is no doubt that the crisis of 2008 has shaped the existing economical landscape a lot. Leading to the bankruptcy of a number of companies, it made the U. S. entrepreneurships reconsider their policies and established only-the-strong-survive principle as the key strategy for the America companies in 2008.Advertising We will write a custom essay sample on If the Fed Had Bailed out Lehman Brothers, Would We Have Avoided the Great Recession? specifically for you for only $16.05 $11/page Learn More Although the U. S. Fed could have given a second chance to the famous Lehman Brothers Company by bailing the firm out, the chances were never taken. Hence, the Lehman Brothers have gone completely bankrupt. In a retrospective, however, the Lehman Brothers could have hardly been able to fight the financial crisis in 2008 efficiently even with the help of Federal Reserve, which means that in the case the company would have stayed afloat, they would have not be en able to offer people sufficient help anyway, being almost broke themselves. Taking a closer look at the financial situation in which the Lehman Brothers was in 2007, one must admit that the company was not doing well, according to what MacEwan and Miller say. Therefore, it is rather questionable that a loan from a bank could save the day; rather, it would serve as the means to keep the company afloat for a while, yet it would not make Lehman Brothers prosperous again. As MacEwan and Miller explain, Lehman Brothers, Bear Stearns, Citibank, and others all held large amounts of these assets on their books. So, as the housing bubble burst, as many homeowners failed to meet their mortgage payments, and as the value of CDOs and credit default swaps fell, many banks (including some of the largest banks) saw a sharp decline in the overall value of their assets. (MacEwan and Miller, 107) Hence, it can be considered that there was hardly any chance for the company to survive the crisis. Th e main problem of the Lehman Brothers was that the bank depended on the Fed much more than it was required. In its turn, the Federal Reserve followed the policy of the housing bubble (Fox), which can be defined as a run-up in the prices for housing enhanced by the certainty in future stability. Resulting in the rapid decline of the Federal Reserve’s progress, the given policy must have been considered the only legitimate course of actions in the situation when the economics was gripped by crisis. On the one hand, the given approach seems rather reasonable, given the fact that creating the housing bubble helps spread the belief in strong economic system among the population.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More On the other hand, the downside of the give strategy is that, while people believe that the crisis will not last long, the poor state of economics and the rapid incr ease in price for housing will finally lead to a financial collapse. According to what Friedman, Moseley and Sturr claim, The housing bubble was in part generated by the Federal Reserve maintaining low interest rates. Easy money meant readily obtainable loans and, at least in the short run, low monthly payments. Also, Fed Chairman Alan Greenspan denied the housing bubble’s existence — not fraud exactly, but deception that kept the bubble going. (Friedman, Moseley and Sturr 133-134) Taking into account the given information, one must admit that the Lehman Brothers’ impact on the financial situation within the state was rather small. Because of the scale of the crisis, it was quite doubtful that the bank would handle the complexities within its own structure and policies, not to mention having a tangible effect on the state economy. Hence, it can be concluded that even if the Fed bailed the Lehman Brothers out, the housing bubble would have ultimately led to the f inancial instability. The Great Recession seems to have been spawned not by the inability for entrepreneurships to get investments, but from the existing housing policy. In addition, the critical state of affairs in the sphere of finance and economics in the USA should be mentioned: â€Å"It has become commonplace to describe the current financial crisis as the most serious since the Great Depression† (Friedman, Moseley and Sturr 135). It can be alleged that the economical situation in which the USA was trapped in 2008 was quite close to the one of the 1929, known as the Great depression: â€Å"So we reap the whirlwind with a market collapse building to Great Depression levels. Once again, we learn history’s lesson from direct experience: capitalist financial markets cannot be trusted. It is time to either reregulate or move beyond† (Fridman, Moseley and Sturr 132). Naturally, the fact that the U. S. economics was collapsing did not improve the Lehman Brothers s ituation. Judging by the above-mentioned, one must admit that the USA economics was way too unstable for the Federal Reserve to take risks by giving the loan to the company which could have been broken by the end of the crisis (Palley). When considering the reasons behind the decision of the Federal Reserve to refuse to give the Lehman Brothers the loan which the company needed, one must admit that the Fed was impacted by the problems within. The fact that the Fed was suffering from the crisis was the main reason, while the fact that the Lehman Brothers lacked trustworthiness happened to be the pivoting point in Federal Reserve strategy.Advertising We will write a custom essay sample on If the Fed Had Bailed out Lehman Brothers, Would We Have Avoided the Great Recession? specifically for you for only $16.05 $11/page Learn More To Lehman Brothers’ credit, one must mention that the company did have certain opportunities to improve their financial s ituation with the help of the Federal Reserve’s investments. According to the existing evidence, there have been several attempts to bring the company back to life, along with the endeavors of Bear Sterns: â€Å"The precedent for preventing the failure of a large financial institution, initiated with Bear Stearns, now appeared to be reinforced by the Fannie Mae and Freddie Macactions† (MacEwan and Miller 110). Still, no matter how sad this can seem, the given approach has had little effect: â€Å"Yet, while the precedent seemed very clear on September 7, the federal authorities failed to follow it a few days later when Lehman Brothers, the nation’s fourth largest investment bank, moved toward collapse† (MacEwan and Miller 110). Fighting against the odds, Lehman Brothers tried its best to stay afloat. It must be admitted, however, that at that point, the company could hardly have any impact on the economical state of affairs within the country. Judging by the fact that the Lehman Brothers could not handle its own financial issues, it is hardly believable that the company could have had any effect on the financial processes. Hence, even if the Federal Reserve offered the bank the required loan, the collapsing Lehman Brothers would not have been able to save the day. Therefore, it is clear that even with Lehman Brothers receiving the help of the Fed the outcomes of the crisis would have still been deplorable. Although it is quite questionable whether the company would have had the power to adjust to the situation which the U.S. market faced in 2009, it would still have taken too much time to adjust to the changes in the economics. Hence, Lehman Brothers would not have been able to offer people a full range of their services. Even though Lehman Brothers had already lent a considerable amount of money from the Federal Reserve Bank, the former would have been able to pay the bank back with the revenues which they would have obtained from the future financial operations. However, the Fed did not trust with the company that had already been in debt by the point at which the crisis peaked. Therefore, it seems that there is no one to blame in the given situation; it was Federal Reserve to decide whether to trust Lehman Brothers, and the bank’s decision is not to be judged by anyone except its members.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More In addition, the fact that the company was facing its own crisis is worth bringing up as an argument that the Federal Reserve would have only postponed the process of the company’s regress. Even if Fed had provided the required amount of loan money, Lehman Brothers would have already been dead and gone by now, which means that the recession would have been in progress even if the Lehman Brothers still provided their services. Works Cited Fox, Justin. â€Å"A Random Walk from Paul Samuelson to Paul Samuelson.† The myth  of the Rational Market: A History of Risk, Reward and Delusion of Wall Street. Ed. Justin Fox. New York, NY: Harper Collins Publishers, 2009. 60-74. Print. Friedman, Gerald, Fred Moseley and Chris Sturr. The Economic Crisis Reader:  Dollars and Sense. Armonk, NY: M. E. Sharpe, 2011. Print. MacEwan, Arthur, and John A. Miller. â€Å"The Emergence of Crisis in the United States.†Economic Collapse, Economic Change: Getting to the Roots of the Cri sis. Ed. Arthur MacEwan and John A. Miller. Armonk, NY: M. E. Sharpe. 65-117. Print. MacEwan, Arthur, and John A. Miller. â€Å"Globalization and Instability.† Economic  Collapse, Economic Change: Getting to the Roots of the Crisis. Ed. Arthur MacEwan and John A. Miller. Armonk, NY: M. E. Sharpe. 119-159. Print. Palley, Thomas I. From the Financial Crisis to Stagnation: The Destruction of Shared  Prosperity and the Role of Economics. Cambridge, UK: Cambridge University Press, 2012. This essay on If the Fed Had Bailed out Lehman Brothers, Would We Have Avoided the Great Recession? was written and submitted by user Trace C. to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

You Need to Check Out These 70 Most Liberal Colleges in America

You Need to Check Out These 70 Most Liberal Colleges in America SAT / ACT Prep Online Guides and Tips If you’re politically active, you may want to go to a college where the students, faculty, and administration share your values. You’ll be more likely to find student groups that are aligned with your interests and beliefs and you'll probably have a more enjoyable college experience. In this article, I’ll give you the names of some of the most liberal colleges in the United States. Furthermore, I’ll detail the traits of liberal colleges, explain possible advantages and disadvantages of liberal colleges, and advise you how to find liberal colleges that could be a good fit for you. Traits of the Most Liberal Colleges Liberal colleges are very politically left-wing. They're more accepting of different sexual orientations and gender identities, and students tend to favor liberal positions like ending the War on Drugs, outlawing private prisons, and raising the minimum wage. The most liberal colleges tend to be private liberal arts colleges.Very liberal students are often drawn to small liberal arts colleges because these schools offer a more progressive education. For example, at Reed College, grades are recorded, but deemphasized and not distributed to students, and professors serve more as mediators in class discussions as opposed to being lecturers. Furthermore, the most liberal colleges usually reflect the political leanings of their locations. Many of the most liberal colleges are located on the west coast and in the Northeast, both known for being extremely liberal places. Possible Advantages of Going to a Liberal College If you're very liberal, then you'll probably be happier and more comfortable around like-minded people. You're more likely to make friends who share your political and social views. Your professors are also likely to be very liberal, and you'll be receiving an education that coincides with your values and beliefs. Liberal colleges are known for being extremely tolerant and culturally sensitive. LGBT students and students from underrepresented backgrounds may feel more supported at liberal colleges. The college is more likely to offer support services and organizations for these students. Also, very liberal colleges tend to be less strict and structured. Many liberal colleges pride themselves on being less focused on grades and big lecture classes and more focused on collaboration and self-actualization. They often have a much more permissive culture, and they tend to be less likely to harshly punish students who engage in "extracurricular" activities that are stereotypically associated with college life. If you're liberal and go to a conservative college, it's possible that you'll feel isolated and ostracized for your beliefs. You'll find more Bernie Sanders fans at liberal colleges. (Marc Nozell/Flickr) Possible Disadvantages of Liberal Colleges If you're very liberal, you may benefit from being exposed to different viewpoints. Having your beliefs challenged and being around diverse opinions can help you learn and grow. If you're very liberal and attend a liberal college, you may just be surrounding yourself with people who are likely to echo your beliefs. While liberal colleges are tolerant of people from different backgrounds, they tend to not be very tolerant of conservative viewpoints. Many of the students at the most liberal colleges view conservatives as closed-minded or ignorant. If you want to be in an environment that welcomes diverse viewpoints, you may not feel completely comfortable at the most liberal colleges. Furthermore, the most liberal colleges and students are becoming notorious for protesting and taking action against speech they consider insensitive or offensive. Many people believe these colleges and students have become hyper-sensitive. Because most colleges tend to lean liberal, and the majority of college faculty members are liberal, you don't have to attend the most liberal colleges to be around liberal people and ideologies. The only colleges that have a reputation for being more conservative are many of the religious schools, the service academies, and public colleges in the most conservative states. Finally, the less structured environment at the most liberal colleges may not be beneficial to you. Some students need more structure and discipline to excel. Also, the lack of emphasis on grades and a traditional curriculum at some of the most liberal colleges may not suit your educational needs and could negatively impact some of your future job opportunities. The Most Liberal Colleges Let's go through two rankings of the most liberal colleges, so you can get a sense ofwhereyou might want to look if you're hoping to attend a particularly liberal school. Niche Niche is a website that provides reviews, rankings, and statistics about neighborhoods and schools. It provides many different college ranking lists from the overall best colleges to the top party schools to the most liberal colleges. The Niche rankings of the most liberal colleges are based on a political poll of 50,000 students from 747 colleges. A full 80% of the rankings is based on student survey responses regarding the students' personal political leanings. The remaining 20% is based on student survey responses regarding the political leanings of other students at the college. The List I'm giving you the top 50 most liberal colleges according to Niche, with #1 being the most liberal. Most of these colleges are private colleges and many are small liberal arts colleges. Some of the public universities that made the top 50 are University of Vermont, UC Santa Cruz,SUNY Purchase, andPortland State University. UC Santa Cruz (Casey Marshall/Flickr) School Location Acceptance Rate 1. University of California - Santa Cruz Santa Cruz, CA 51% 2. San Francisco State University San Francisco, CA 70% 3. Columbia College Chicago Chicago, IL 92% 4. Mills College Oakland, CA 87% 5. University of California - Berkeley Berkeley, CA 17% 6. Mount Holyoke College South Hadley, MA 51% 7. Bard College Annandale-On-Hudson, NY 58% 8. Portland State University Portland, OR 92% 9. American University Washington, DC 29% 10. Oberlin College Oberlin, OH 34% 11. New York University New York, NY 28% 12. Howard University Washington, DC 41% 13. Sarah Lawrence College Bronxville, NY 53% 14. Bryn Mawr College Bryn Mawr, PA 38% 15. Smith College Northampton, MA 32% 16. Vassar College Poughkeepsie, NY 24% 17. SUNY Purchase College Purchase, NY 74% 18. Carleton College Northfield, MN 21% 19. Wesleyan University Middletown, CT 16% 20. University of Washington Seattle, WA 46% 21. SUNY New Paltz New Paltz, NY 44% 22. Northwestern University Evanston, IL 9% 23. Kenyon College Gambier, OH 34% 24. Fashion Institute of Technology New York, NY 47% 25. University of California - Santa Barbara Santa Barbara, CA 33% 26. CUNY Hunter College New York, NY 40% 27. Western Washington University Bellingham, WA 85% 28. Columbia University New York, NY 7% 29. Roosevelt University Chicago, IL 70% 30. Denison University Granville, OH 37% 31. University of Oregon Eugene, OR 83% 32. University of San Francisco San Francisco, CA 66% 33. Barnard College New York, NY 15% 34. Morgan State University Baltimore, MD 64% 35. SUNY Buffalo State College Buffalo, NY 58% 36. Occidental College Los Angeles, CA 42% 37. New College of Florida Sarasota, FL 69% 38. University of California - Riverside Riverside, CA 57% 39. Emerson College Boston, MA 46% 40. Swarthmore College Swarthmore, PA 11% 41. Northeastern University Boston, MA 27% 42. Hofstra University Hempstead, NY 64% 43. Boston University Boston, MA 25% 44. Bowdoin College Brunswick, ME 14% 45. California State University - Los Angeles Los Angeles, CA 46% 46. San Jose State University San Jose, CA 67% 47. Spelman College Atlanta, GA 40% 48. California State University - Dominguez Hills Carson, CA 54% 49. Ithaca College Ithaca, NY 71% 50. University of Vermont Burlington, VT 67% Rally of the "Carleton College Dems" (cursedthing/Flickr) Princeton Review The Princeton Review rankings for the most liberal colleges are based on students' responses to the question "Politically, are you left-wing, Democrat, middle, Republican, right-wing?" The List All of these colleges are small, private colleges with the exception of Clark University (Worcester, Massachusetts) and Brown University (Providence, Rhode Island), which are progressive private research universities. Schools that made both the Niche and Princeton Review lists are Bryn Mawr and the University of Vermont. The schools on the Princeton Review list are ranked from 1-20. School Location Acceptance Rate 1. Bryn Mawr College Bryn Mawr, PA 38% 2. Bennington College Bennington, VT 63% 3. Reed College Portland, OR 35% 4. Earlham College Richmond, IN 62% 5. Sarah Lawrence College Bronxville, NY 53% 6. Grinnell College Grinnell, IA 25% 7. Pitzer College Claremont, CA 14% 8. Scripps College Claremont, CA 28% 9. Mills College Oakland, CA 71% 10. Brandeis University Waltham, MA 34% 11. University of Vermont Burlington, VT 67% 12. Clark University Worcester, MA 55% 13. Skidmore College Saratoga Springs, NY 36% 14. College of the Atlantic Bar Harbor, ME 76% 15. Carleton College Northfield, MN 21% 16. Whitman College Walla Walla, WA 43% 17. Brown University Providence, RI 9% 18. Mount Holyoke College South Hadley, MA 50% 19. Lawrence University Appleton, WI 68% 20. Wesleyan University Middletown, CT 22% Marlboro College (Jared and Corin/Flickr) Student Reviews of Liberal Colleges Niche also offers student reviews of colleges. Here are some comments written by students about some of the most liberal colleges in the United States. I tried to include positive and negative comments about each school related to its very liberal environment. UC Santa Cruz There are some classes that really drill in the necessary skills needed for you future career. Other classes show you different aspects of other studies, which may be great for finding the perfect major. Overall, I would say that community is that best part of this college. It has taught me to be more open-minded and to always question the everything. Hippies everywhere! Public service announcement: if you need to be on psychedelics or smoke weed to have a better appreciation for the nature around you, you're doing something wrong! Nature is beautiful sober. Grinnell College Grinnell is extremely accepting of people from all walks of life. We have tons of programs and groups on campus to accommodate all students, such as Concerned Black Students, Cultural Diversity Panel, Spectrum, and Queer Students of Color. It was a great experience, but it requires that you are self-motivated. I thought I was at first and it was a hard wake-up call. You will be beaten, but you will come out better for it. Smith College Northampton is a perfect college town, very liberal, artsy, hipster, and worldly. So is the food. So many different types of restaurant options are available. Smith trusts its students, and it's also a school very concerned with social justice, so even seemingly trivial violations are taken very seriously and reported. Skidmore College I've learned a lot about issues that make people uncomfortable (especially in the United States) like race relations, radical environmental initiatives and the true significance of privilege. If you want drugs, then you will be able to find them relatively easily, and more than just your basics. Pot is smoked by more people than not. Alcohol is also very widely used. Most of campo just wants you to be safe and discreet, so if you are then you probably won't have any problems. For the most part, you need to be pretty obvious and obnoxious to get in trouble. Skidmore College How Should You Use These Lists of the Most Liberal Colleges? If you want to go to a very liberal college, you should research the colleges on the Niche and Princeton Review lists that interest you to determine if they’re schools you should apply to. There are many factors to consider to determine if a college is a good fit for you including location, selectivity, support services, and the majors offered. Look at the school’s website, and use guidebooks, college finders, search websites, and other ranking lists to help you in the college selection process. If possible, consult with teachers, counselors, parents, current students, and alumni. What Should You Do If You Want to Attend a Liberal College, but a School You're Considering Isn't on EitherList? Just because a school you're considering didn't make either list doesn't necessarily mean that it's not liberal. As I mentioned previously, most colleges tend to be more liberal than conservative. If you want to go to a college with a liberal atmosphere, look at the school's website to see if there are student groups that are aligned with your political and social views. There may be student groups for Democrats, feminists, or LGBT students. Similarly, there may be student groups that advocate for more liberal organizations or causes like Planned Parenthood, NORML (National Organization for the Reform of Marijuana Laws), climate change, or affirmative action. Also, you can consult other sources that evaluate or grade how liberal a college is. On the Niche profile for each college, under "diversity" for each school's guide, there is a category called "political activity" that describes the political activity on campus. For example, this is how Harvard's political activity is described: Harvard possesses a largely liberal political base, but conservative political groups do make their presence felt. Nearly every student has an informed opinion, and the Institute of Politics provides an excellent forum for discussion and debate of current political topics. On the College View college finder, you can select that you're "only interested in schools with a very liberal climate" and search for colleges that fit that criteria. Furthermore, there are 20 other search categories to help you narrow your college search. Finally, remember that the political leaning of a college is often reflective of the city or town where the college is located. Colleges in the Northeast and on the west coast tend to be more liberal, and colleges in the South tend to be more conservative. You can determine if a specific city or town is liberal by looking up the candidates it supported in the last election and its views on various political and social issues. From the city of Liberal, Kansas, which is ironically more conservative What's Next? Since liberal arts colleges are predominantly liberal, you may be interested in checking out our rankings of the 28 best liberal arts colleges in the country. Also, if you want to go to a selective college, you should take a look at the colleges with the highest SAT scores. Finally, because college tuition prices continue to rise and you may be worried about how you're going to pay for college, I recommend you read this post on how much college really costs. 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