The 2008 Great Recession hit the world hard and changed politics drastically. However, it wasn't bad as it could've been, such as a second Great Depression. What if the Second Great Depression hit in 2008? What would be the chain of events to lead that to happening. Your challenge is to show that exact scenario happening.
AHC - Second Great Depression in 2008
- Thread starter TheDoofusUser
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- 2008 great depression ahc
It's not that hard. You just need John McCain or some other republican to win the 2008 election, because that would be enough to butterfly the stimulus and auto industry bailout.
the AHC has to have the Great Depression 2.0 begin during 2008 to be accomplished.
prani
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First of all, the great depression 1929 was a different beast, people borrowed money from the banks and speculated in the stock exchange where as the Financial crises of 2008 was due to sub prime lending dating back to the Clinton era. There was also securitization of the bank's borrowers where the Banks sold their borrowers account to a large number of financial institutions who in turn re packaged it and the sold on to other institutions, so on and so forth until the contagion spread across the system. This did not happen in the Great depression of 1929, there the value of stock collapsed and the banks panicking began to call back the loans and when the people were unable to pay back the debts the banks began to go under.
One was caused by the speculation in the stock market and borrowing across the board in all sectors of the economy especially agriculture (Since the USSR has gone out of the European grain market, it opened the door for American grain to Europe) and the other was caused by bad banking practice in the housing sector, lending to people who did not have the capacity to re pay back as the banks looked into capability to repay back. So given the nature of the two, it is very hard to predict what would happen and what should happen to get a depression of 2008. Because if you had bail outs for 1929 depression it would probably not work, because financial institutions back then were surplus wealth allocators rather than actual wealth creators, which they are in our present day and age.
Now despite the glaring differences between the two, there is one similarity, that both were caused by the loss of trust amongst the financial system and participants in the financial markets. So stopping bail out is a quick way of making the financial crises of 2008 worse as that is the way by which you can worsen the trust deficit in the financial system. The US government does nothing and allows the banks and financial institutions to collapse and file for Bankruptcy allowing the contagion to spread from the Financial sector into the real economy. In particular allow Fannie Mae and Freddie Mac to collapse, this will cause panic through out the US financial system. After that whatever you do, you cannot stop the system from falling apart.
Now that being said, there are some who say allowing the financial crises to run it's course would not have cause a long lasting depression or a depression at all, since other aspects of the economy such as manufacturing, agriculture and other sectors of the service economy were doing fine, the contagion may have spread across wide span of the financial system but the depth of the problem was not that deep and that the distance between the real economy and the financial economy was not that great as the distance between those two back in 1929 and reason for that was the Soviet Union, yes i am not joking, the communist party of the Soviet Union single handily caused the great depression of 1929 (Those dam Reds!) , because they repudiated the debt of the Tsarist government which caused a lot of money circulating within the global financial system to become worthless and they took the USSR out of the world economy and all of those money flooded into the US markets which enabled the US economy to grow, overheat and speculation in the financial sector of the economy. In the 2008 financial crash, there was bubble in the housing sector alone, now back in 1929 the entire economy was a bubble.
I'd say the effects of financial crises of 2008 is not over, cause the massive bail outs and the loss of trust in the financial system and the subsequent quantitative easing caused a glut of capital to be produced and circulated around the world which so far had not been a problem because India and China and rest of the developing world who have been sucking up the surplus wealth of the west in their Industrialization and the US using the massive cheap finance to you know fund the shale revolution which has made them energy independent and in China it has contributed to the housing bubble. But the massive fiscal spending and quantitative easing made during the pandemic and the previous monetary and fiscal policy to get out of the financial crises is contributing to inflation. So......it remains to be seen if we have dogged a depression or did we just delay it?
To conclude my long rambling, the conditions for a depression back in 2008 financial crises is absent, yes we would have a severe recession with a lot of banks and financial institutions going under but there would still be quite a number of financial institutions standing to service the real economy.
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There was an old TL, that had a severe second great depression - GWB was killed, Cheney become president, Iran was invaded, McCain was elected, due to low congress support the stimulus and bailouts weren't passed and McCain made lots of mistakes in economy.
There was a planned terrorist attack in SA on a massive oil refinery at that time, but failed. But what if that happened? It was responsible for a big oil supply, and would be offline a long time.
So is basically a mix of war exhaustion, debt, oil, financial, manufacturing and supply crisis.
There was a planned terrorist attack in SA on a massive oil refinery at that time, but failed. But what if that happened? It was responsible for a big oil supply, and would be offline a long time.
Maybe chinese internal politics could had changed after the 2000s, with a radical communist CCP leader being elected and doing the same of what the soviets did.
So is basically a mix of war exhaustion, debt, oil, financial, manufacturing and supply crisis.
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