THE RISE OF POLITICAL CONSERVATISM 1980 1992
PRESIDENT GEORGE HW BUSH
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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They were ‘too big to fail’. The whole US economy depended on big banks being able to provide loans for businesses and citizens.
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The banks provided lots of jobs for Americans.
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The bank executives had donated millions to the campaigns of many congressmen and women.
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They were a part of America’s history from the 1800s and they felt they should continue to be America’s banks.
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Detailed explanation-1: -Banks would close. Demand would outstrip supply of food, gas, and other necessities. If the collapse affected local governments and utilities, then water and electricity might no longer be available. A U.S. economic collapse would create global panic.
Detailed explanation-2: -Unable to recover investments, collect loans and repay depositors, thousands of banks went bankrupt and were forced to close.
Detailed explanation-3: -The failure of large institutions can immediately cause failures of other industries in the whole financial system. The failure may also cause a crisis of confidence that may contagiously travel over to other financial institutions leading to a financial crisis.
Detailed explanation-4: -Deflation increased the real burden of debt and left many firms and households with too little income to repay their loans. Bankruptcies and defaults increased, which caused thousands of banks to fail. In each year from 1930 to 1933, more than 1, 000 U.S. banks closed.