Analysis of thesis, conclusion, and evidence supporting and opposing arguments

¶ … Crash, 2008: A geopolitical setback for the West," author Roger Altman analyzed the series of events that led to the "Great Crash" that was the American economic crisis in 2008. In analyzing the causes of the Great Crash, Altman also looked at the other major players that were affected and benefited in the economic crisis, discussing extensively its potential effects for countries in the West and China in the future. The article demonstrates how the economic crisis was preceded by years of exceedingly positive outlook on the U.S. economy, leading to "rampant speculation" in critical markets, particularly the housing market and the U.S. government's "overly accommodating monetary policy." In the midst of all these causes of the U.S. economic crisis is the emergence of economies from the Asian region that are challenging not only the economic stronghold, but also the political influence that U.S. still yields globally.

In this review of Altman's politico-economic analysis of the U.S. economic crisis, two important themes will be thoroughly discussed. First, Altman discussed how the U.S. economy policies domestically have been influenced politically through specific events that influenced the way the U.S. And other countries have perceived the U.S., economically (financially) and politically. Second, the author predicts the future of the U.S. As a political and economic leader globally, as other countries such as China and India are gradually emerging as competitive challengers in influencing the economies and governments all over the world. Combining both themes, Altman concludes that as a result of The Great Crash, the economic and political power that the U.S. had previously held will now be challenged by emerging economically strong countries that were not affected by the U.S. economic crisis, such as China.

In the first theme of the analysis, Altman points to the attitude of the American government after 9/11. He argued that the monetary policies implemented after 9/11 are "overly accommodating" and greatly favored credit loans at low interest rates. Increased and indiscriminate loan activities spurred the U.S. economy after 9/11, and this has led to a booming housing market (domestically), not to mention a highly positive outlook on the stock market and the U.S. economy in general. Indeed, looking at the economic behavior of the Americans and the countries/economies that are dependent on the U.S. economy prior to the crisis, it can be described as optimistic and can be likened to a 'financial bubble.' Because of the positive outlook on the U.S. economy, there had been highly risky behavior from financial institutions and even private individuals who were encouraged and attracted to the prediction and possibility that the economy will just get better as the U.S. remains a global leader even after 9/11.

This was the situation in the U.S. prior to the crisis. Because of poor credits and bad loans, financial institutions were not able to sustain the 'bubble.' Eventually, poor returns on loans/credits led to the financial bubble bursting, and the housing market was the most salient manifestation of the crisis as most money given to poor/bad loans went to mortgages (housing market). "Rampant speculation" eventually caught up with U.S. investors, resulting to stocks plummeting, companies declaring bankruptcy, and financial institutions scrambling to redirect investments to other profitable economic endeavors, of which China stands to benefit as an emerging economic power in the world.

Interestingly, Altman also demonstrates how the U.S. economic crisis had been a contributing factor to the eventual emergence of a China as an economic power in the world. The conditions leading to China's potential as an economic leader, challenging the U.S., are brought about by the fact that U.S. has suffered immensely from its "overly accommodating" monetary policies and the Asian region is relatively unaffected with the economic crisis that has plagued the U.S. And countries from the North American, European, and South American regions. Because of these external and internal factors inherent to the nature of the U.S. economy, China, India and other competitive Asian countries not highly dependent on the U.S. economy have survived the crisis of 2008. These countries have continued to flourish while the U.S. is still experiencing challenges with the downward spiral of its economy.