If Kerry had won Ohio, would the world economy have crashed in 2008?

[User157088589849]

I will always remember President Bush campaigning in Pennslyvania, Ohio  and Wisconsin repeating that if he was re-elected, families would have access to buying a family home at a good rate and with less regulations. The banks borrowed money from each other at flexible interest rates bought American homes and sold to American families in 2004/5/6. Interest rates went up, unemployment went up, exports went down, dollar stayed low, war in Iraq and spending on terrorism continued, families stopped paying the mortgage, banks lost the money and then pop the bubble bust in 2008. Lehman brothers borrowed around 1billion US dollars to pay for the purchasing of homes across America before it collapsed in the late summer of 2008.

The crash of 2008 was totally avoidable or were banks just so unregulated that it didn't matter who the President was? Or did Bush economic policy encourage this environment?

[Person Man]

Kerry would have most likely been a lame duck if he was elected (democrats were pissing in the wind down ballot that year) and when Glass Stegall was done away with, many believed the collapse would have been inevitable. The only difference between the two would be that we would have a liberal court instead of a conservative court and the president would have been a lame duck right after the election instead of after Katrina.

[○∙◄☻¥tπ[╪AV┼cVê└]

It was certainly avoidable, but I don't know if  Kerry Presidency would have avoided it. But if John Kerry

"“I think we will look back in 10 years’ time and say we should not have done this, but we did because we forgot the lessons of the past, and that that which is true in the 1930s is true in 2010, We have now decided in the name of modernization to forget the lessons of the past, of safety and of soundness.” -Senator Dorgan in 1999 when Glass Steagall was repealed.

John Kerry was not one of the 8 nays.

Boxer (D-CA)
Bryan (D-NV)
Dorgan (D-ND)
Feingold (D-WI)
Harkin (D-IA)
Mikulski (D-MD)
Shelby (R-AL)
Wellstone (D-MN)

[Snowstalker Mk. II]

The presidency does not have anywhere near enough influence over the global economy to prevent that.

[Beet]

Yes; by January 2005, the bubble was already in full swing; besides, Kerry was clueless as to what was wrong with the economy. If he had known, I'm sure he would have brought it up more forcefully. In 2004, the Democrats were still campaigning on the 2001 recession.

[Starbucks Union Thug HokeyPuck]

The presidency does not have anywhere near enough influence over the global economy to prevent that.

This. 

Yes; by January 2005, the bubble was already in full swing; besides, Kerry was clueless as to what was wrong with the economy. If he had known, I'm sure he would have brought it up more forcefully. In 2004, the Democrats were still campaigning on the 2001 recession.

And this. 

[Person Man]

Yes; by January 2005, the bubble was already in full swing; besides, Kerry was clueless as to what was wrong with the economy. If he had known, I'm sure he would have brought it up more forcefully. In 2004, the Democrats were still campaigning on the 2001 recession.

If Kerry and the democrats knew, they would have won, right?

[bedstuy]

You can't blame the Financial Crisis on Glass-Steagall's repeal.  I don't understand that talking point.  Which entities were at the heart of the collapse?  Bear, Lehman, Merrill Lynch, AIG, how many were "Financial Holding Companies" under the 1999 revision of the law?  0. 

I think the answer is that a recession was inevitable.  We had a huge asset bubble that neither party wanted to deal with.  However, the crash could have been triggered later, in 2009 maybe.  There were a few key policy missteps in 2007 and 2008 that really lead to a domino effect.  Perhaps, a Kerry administration would have dealt with the banking crisis more aggressively and there would have been less of a financial crisis and more of a traditional economic recession.

[Lief 🗽]

If Kerry had won Ohio, the Democratic Party would have been destroyed for a generation in 2008.

[IceSpear]

If Kerry had won Ohio, the Democratic Party would have been destroyed for a generation in 2008.

It didn't even destroy the Republican Party for 2 years.

[memphis]

If Kerry had won Ohio, the Democratic Party would have been destroyed for a generation in 2008.

It didn't even destroy the Republican Party for 2 years.

The difference is that the Republicans understand salesmanship. Democrats couldn't sell a life jacket to a drowning man. To answer the question, Kerry never would have been (or even tried, really) able to undo the disasterous Bush tax cuts. Cutting capital gains rates to the bone is just asking for a speculative bubble.

[Cory]

If Kerry had won Ohio, the Democratic Party would have been destroyed for a generation in 2008.

This. 2004 was fools gold.

[pbrower2a]

By 2005 there was no way to prevent the economic meltdown of late 2007- early 2009. The corrupt practices were already entrenched, and nobody was going to undo them. 

Kerry would have been a one-term President. Whether the following Republican would also be a one-term President depends upon how long the meltdown lasted, and how quickly the recovery would happen.   

[○∙◄☻¥tπ[╪AV┼cVê└]

If Kerry had won Ohio, the Democratic Party would have been destroyed for a generation in 2008.

This. 2004 was fools gold.

I guess there's an advantage in keeping Republicans in office long enough that their terrible policies blow up in their face. Besides President Dubya, see also Governor Arnold. The state was a fiscal disaster when he left office. And not even the biggest Republican partisan hacks can say that it hasn't gotten better under Governor Brown.

[Person Man]

If Kerry had won Ohio, the Democratic Party would have been destroyed for a generation in 2008.

This. 2004 was fools gold.

I guess there's an advantage in keeping Republicans in office long enough that their terrible policies blow up in their face. Besides President Dubya, see also Governor Arnold. The state was a fiscal disaster when he left office. And not even the biggest Republican partisan hacks can say that it hasn't gotten better under Governor Brown.

I can see 2014 and 2016 being fool's gold for us for that matter. This is because if Republicans are given enough slack, they will hang themselves. Of course as above-posters pointed out, Republicans just have these amazing panty dropping social skills (pretty much the one thing they do have if they have anything at all) so unless things get really bad, we can't just not contest the next two elections and just hope that things get really bad in 2018 and 2020.

[Clarko95 📚💰📈]

Of course, the housing bubble had begun in 2001 and peaked in 2005. He would've come into office a dead President walking in terms of the economy


After 9/11 and the 2001 recession, the Federal Reserve cut interest rates to 1.00% from 6.50% and hoped it would stimulate homebuying, consumer spending, manufacturing, business hiring, etc. but it turns out most of the capital was shoveled into the residential real estate market, just as had happened during the 1984 - 1989 real estate bubble. While from 1996 - 2000 housing prices were increasing by about 4 - 5% per year (which is strong, but not exactly bubble levels. It was more a bounce-back from the 1989-1995 real estate depression, similar to what we're seeing now after the 2008 crash), from 2001 onward they were exploding by 7%, 8%, even 12% in 2005.

One of the reasons investors put so much money into real estate was the fact that it was seen as a relatively safe investment (you can literally live in your investment) and there was no shortage of people wanting homes who would take out loans they didn't read, and politicians happy enough to give people homes (Democrats) and claim credit for the roaring economy and stock market (Republicans).

In 2004 - 2005, as unemployment fell back to 5%, GDP grew at 3%, and income had begun to rise, the Fed hiked interest rates to 5.25%. Home values peaked in December 2005, and then home sale prices peaked in March 2006. From late-2005 to early-2007 the housing market basically slid sideways, until the interest rate hikes began hitting homeowners in terms of higher mortgage payments, which lead to huge defaults and foreclosures beginning in May 2007. In 2007, over 2 million people lost their homes to foreclosure. The stalling, and then declining, housing market (lots of well-paying construction jobs were at risk) combined with huge imbalances in the US economy (our trade deficit that was was a horrifying $850 billion, and 3.8 million manufacturing jobs had disappeared 2001-2007) led to a recession beginning that December, but the financial crisis didn't happen until September 2008 because the few banks that began to fail in 2007 were able to take out some lines of credit from the government and the big banks were able to cover their losses in other sectors (until everything went to hell in 2008).

President Kerry was screwed from before he even began his campaign, so yes the crash still would've happened. But how his administration would have reacted to it is a whole 'nother debate. I see two scenarios with him. First, you could argue that his admin would not have let Lehman fail (Bush was committed to free markets) and his regulatory agency appointees would have red flags everywhere starting in 2005, and thus this would've prevented the financial crisis from getting too out of hand (but still quite severe). Or I could see him mirroring Bush's mistakes of not intervening, because he didn't want to be "that Democrat" who bailed out the fat cats (we have to remember how the Left, and all political rhetoric, would've changed had Kerry defeated Bush in 2004) until it was too late.

[courts]

yes obviously. we'd probably have president hillary clinton after whatever republican won in 2008 though

[Rockefeller GOP]

I highly suggest the book, "All the Devils Are Here."  Anyone who thinks there's one simple cause for the financial crisis is out of their minds.  Of course it would have still happened.

[Person Man]

I wonder how long people think it will before the next financial crisis? The economy is very average and is chugging along at a conservative pace...there seems to be no bubbles. And unless there is another global disaster like war or a major major natural disaster, its all out of sight and out of mind.

[pbrower2a]

"That some should be rich shows that others may become rich, and hence is just encouragement to industry and enterprise. Let not him who is houseless pull down the house of another; but let him labor diligently and build one for himself, thus by example assuring that his own shall be safe from violence built"

- Abraham Lincoln

Fake quote. Just so you know.

[Clarko95 📚💰📈]

I wonder how long people think it will before the next financial crisis? The economy is very average and is chugging along at a conservative pace...there seems to be no bubbles. And unless there is another global disaster like war or a major major natural disaster, its all out of sight and out of mind.

The longest period of uninterrupted expansion the US has seen was 1991 - 2001, followed by 1961 - 1969 then 1983 - 1990. The last recession ended in June of 2009, so the current expansion would have to surpass June of 2019 to break the record. Crazy right?

While it's true that the slow rate of expansion is preventing any bubbles and could drag the expansion out, I think that when the Fed raises rates it may rock the stock market and slow the housing market, causing a soft landing like what happened in 1995. I could see Europe flaring up again in 2016 - 2018 and causing even a minor recession in the States, but it would be very shallow but drawn out, kind of what happened to the US 2001-2003 or Italy 2011-2013.

I'm personally betting on a small recession 2018 - 2019, which will screw over whoever succeeds Obama and screws me as a I graduate. Another possibility is a "paper recession" where GDP growth goes negative for two quarters, but the job market remains strong (like what happened in Q1 2014) or affects only a few sectors, and unemployment fluctuates slightly. I could see government budget cuts and/or a Fed rate hike causing that.

[The Free North]

Vague political differences between two bonesman would have been irrelevant in stoping the countries movement towards economic and financial calamity.