financial crisis

Economics and Politics

Recently I have been re-watching a lot of documentaries and about all kinds of things. One thing that was often a topic or connected to the topic was the division of wealth and the presence or absence of poverty. Especially the financial crisis of 2008 and its effects still get to me.

As I thought about the financial crisis I thought about the relationship between the economy and the politicians. In general a country is either capitalist or communist or something in between. Each country decides based on its economy and economic system what is best for the country. The decisions are taken by the politicians in charge and then it is a matter of waiting for the effects.

What is described in the paragraph above seems simple, well it is not. A country also has people and the people either support a politician or not in making his or her decision. There are interests the people have and interests the politician has. When these interests are not (largely) the same and the decisions made dissatisfy a majority of the people, especially economically there is a problem.

During the financial crisis of 2008 which started in the U.S. the politicians in charge were in a dilemma. Yes the banks and financial companies were important but the consumers, thus the civilians were also important. The decision was made to bail out Wall Street while people were losing their jobs and houses.

In the aftermath of the financial crisis Europe prepared for austerity measures. Southern parts of Europe suffered economic collapse, notably Greece. The European member states of the EU worked together to support the weaker economies and contributions were collected. At the same time some people in European countries rightfully asked: “why do we have to contribute tax payers money to save failing politicians who collapsed their countries?” I thought the same thing, but I also knew the EU the member states had to support each other to maintain political unity and stability.

Both in the U.S. and Europe the economic interests and the political interests of both politicians and civilians came into conflict. Short-term, long-term, social and financial factors were very important. Now in 2014 some effects have become visible and not everybody is satisfied, especially the civilians who see how not all previous problems have been solved.

Economics and politics influence many far-reaching decisions. To have some understanding helps a lot…