I see this a lot - people blaming a president they don't like for ultimately being responsible for our generation's version of the Depression. The problem, however, was monetary policy.

People have a tendency to view various presidents as responsible because they think the financial crisis caused the recession, which is simply false. So, accordingly, they look to the flagrant and abhorrent uses of deregulation under presidents like Reagan and Clinton. I can understand why people have this confusion of causation, but it simply isn't correct.

Financial crises - at least those which accompany recessions - are usually caused by the recession itself. Financial crises, on their own, are never enough to push a country into recession. So, I'll emphasise it again - bad monetary policy caused the Great Recession.

Specifically, tight money did. The mortgage crisis would've still likely been a thing, but it would've been nowhere near as severe as we've seen. Some time in 2007, the Federal Reserve slammed on the breaks and caused a drop in the growth rate of the monetary supply - they did this in response to an oil shock. Unfortunately, this meant monetary policy was too tight in relation to the needs of the economy, and caused nominal income to begin falling.

The recession actually began about six months prior to the financial crisis (the beginning of which was marked by the failure of Lehman Brothers), but was actually pretty mild. This falling nominal income, however, makes it difficult for people to pay back loans and leads to bankruptcies and causes financial crises.

The subprime mortgage crisis likely would've been a thing on its own, without falling nominal income, but it wouldn't have been anywhere near as severe as what we've experienced. Tight money, quite seriously, exacerbated the crisis. Like I said, financial crises are usually a response to recessions, and are never enough to cause them - this has been vindicated time and time again from 1929 to 1987.

If you want to blame anybody, then it was Ben Bernanke who was chairman of the Fed at the time - although you can't really hold him to account.

um, no. god caused the recession as punishment for this country's rising tolerance of the homophiles. it has nothing to do with bernanke (who is, in fact, a god-fearing republican).

Bernanke's also a Jew.

We need to ban currency! We must shave off our greediness and unit!

Bump.

Conspiracy twist:

I always believe that businesses or financial institutions that react to the economy around them instead of predicting the future. I mean Scotia Bank made a bunch of layoffs during the oil drop then they came out with a financial report of record breaking profits. I mean honestly yeah they have profits but do they know how many jobs were lost and how this will effect not only the economy but their business. The presidents should not be responsible for the outcome of the economy and Obama is also not at fault. What is though is the inability of governments and financial institutions to make decisions on the economy based on how the economy is doing in the present. Nudge the way or direction you want it.