Essay: The Great Financial Crisis
Question 1. In the book The Great Financial Crisis: Causes and Consequences, by Magdoff and Foster, the authors explain the global economic melt down that affected the entire global economy. In the book, the authors elaborate that causes of the economic crisis from a broader perspective. The finance capitalism is identified as a major cause of economic stagnation among the mature capitalist economies.
The economic stagnation resulted to decreased profitable investments alternatives in the real productive economy. According to Foster and Magdoff, the financial crisis date back in the 1970s when there were limited investment opportunities forcing the economy to seek other sources of profit by financialization. The US economy was founded on speculation coupled with complex financial strategies hence referred to as casino economy that requires changes in the existing monetary and fiscal policies.