Clockwise from top left: U.S President Donald J. Trump visits factory workers in Lansing, Michigan; blue-collar workers march on Washington D.C , May Day, 2020; the U.S-China Trade War is regarded as one of the greatest causes of the crisis; a house sits with its price slashed thanks to the housing collapse
The financial crisis of 2019-2021 was a global economic crisis that began in December, 2019[1] after the bursting of the American housing bubble, followed by spikes in crude oil prices, and the collapse of the American stock market. Felt arguably the worst in the U.S, it eventually spread across most of the developed world.
It is regarded by historians as rivaling if not topping its 2008 counterpart, and is credited with the peak of the Second Progressive Era.
Genesis[]
From 2017-2018, the U.S enjoyed great economic prosperity. The stock market remained stable while unemployment took a nosedive. U.S President and Republican Donald J. Trump was quick to assume credit for the upturn, though most non-conservative analysts have formed a general consensus that the success was thanks to Trump's predecessor Barack Obama. Nevertheless, Trump, despite his unpopular immigration, foreign, and domestic policies defied political gravity, and rode on modest approval until 2018.
In December, 2018, Trump started the longest government shutdown in U.S history after feuding with Congressional Democrats over his promised border wall. As a direct result of the shutdown, the stock market fell markedly out of a panic. Despite Trump's best efforts, the majority of Americans blamed him and the GOP for the shutdown,[2] leading to his eventual cave on the issue and the reopening of the government in February, 2019.
Following on another campaign promise, Trump sparked a Trade War with the People's Republic of China in 2018, citing supposedly predatory trade policies against the U.S. Beijing in turn responded with equal economic aggression.
The Crisis[]
The first signs of a coming economic downturn appeared in July 2019, when the US Treasury yield curve inverted. In December, the American housing bubble burst, shortly followed by similar collapses in Canada, Australia, and Hong Kong. This was largely due to artificial meddling by the Federal Reserve in addition to bankers giving out subprime mortgages in order to maximize profit.[3] Trump, facing three challengers in his primary, responded in February 2020 by signing the Economic Stimulus Act of 2020, giving further tax breaks to the top 1% of taxpayers and big businesses. The day of the signing, Trump vowed in the Oval Office that the housing crisis would soon end, and wouldn't expand to other facets of the economy. Regardless of Trump's reassurance, many Americans were left terrified, and economists listed Trump's boasts as ignorant at best and delusional at worst.
Following the housing implosion, many mortgage companies declared bankruptcy and were either bailed-out or absorbed by the U.S government, this greatly hurt American confidence and trust in President Trump.
Thanks to tensions between the West and Venezuela, Iran, and Saudi Arabia, gas prices skyrocketed as each government moved to pressure the U.S, with U.S gas station prices reaching $5.00 by August, 2020.
A MAGA cap burns on the Streets of Washington D.C
Strained by the Trade War and other various factors, the U.S stock market dropped -800.00 points on 30 September, 2020. Chaos enveloped America and the world, with rioters taking to the streets in several countries, but most prevalent in the U.S. Protesters got as close to the White House as riot police would allow them, and demanded Trump's resignation, many of the President's former supporters burning their MAGA caps in the streets. Nationwide protests turned violent as dissidents threw Molotov cocktails and often physically battled with police. In the third presidential debate, Trump launched into an angry rant against the working class voters that had "betrayed him", largely considered to hurt his credibility among remaining undecideds.
Thanks to the Recession, Democratic nominee Kamala Harris defeated Trump in an electoral routing, carrying the entire rust belt and every swing state outside of Iowa. Harris pledged in her victory speech to deliver America out of the current economic times, channeling Obama with her declaration of "Yes, we can!" and her own "For the people!"
Immediately after taking office, Harris launched aggressive economic policies involving heavier government intervention in the market. By June 2021, Harris' actions had seemingly worked, and the crisis came to an end.
Impact[]
The crisis had a tremendous impact on geopolitics. Due to Trump's perceived bumbling of the crisis, Americans turned on the Republican Party, not only electing Harris but also giving the Democrats large majorities in the House and Senate. Most regard the crisis has having a direct hand in the peaking of the Second Progressive Era, in which progressives were elected en masse in the West.
Not all countries moved in a more leftist direction however, neoliberal governments in France, Germany, and Sweden would also be ousted and replaced by far-right leaders out of anger over the crisis.
Chicanos were also incensed due to their reliance on blue-collar work and because many lost their homes in the housing crisis, giving more momentum to the Second Chicano Movement.