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From Dump to Trump: How the 2008 Financial Crisis Got Trump Elected

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“Men being, as has been said, by nature, all free, equal and independent, no one can be put out of this estate, and subjected to the political power of another, without his own consent.” Those are the wise words of John Locke’s Second Treatise of Government. Amidst the protest and turmoil of the recent election and action of the Trump administration, we should take a further look into the philosophical and economic values that resulted in the current state of the nation. Regardless of your personal political values and opinions, any American citizen must analyze the elements that resulted in a drastic national policy change.

Let’s rewind 8 years to find out the originating source of Trump’s power. The economic crash of 2008 just recently occurred. People lost their houses, cars, and jobs. Many were borrowing money with 0% down payment, unbelievably low interest rates for a set period, and received high credit limits. The lenders were allowing everyone to have the opportunity to experience the American dream. What more could you ask for in paradise? In essence, the government regulations on lending provided the entire nation a multi-year “red-dot sale” on loans. Lenders issued loans without accepting the fact that long term equilibrium price could not be sustained when considering the normal nation interest rate growth per year would eventually exceed the short term interest rate for the loans. The entire nation was borrowing and spending money they could not afford to pay back.

After the resulting crash of the stock market 8 years ago, the government infiltrated the legislative system with new laws that drastically altered the way we lend and borrow funds. As a result, our national lending rates drastically decreased and halted our economic growth. Many thought the new regulations would create a positive impact on the economy under the Obama administration’s liberal legislation. However, it wants quite that easy to get an entire nation’s economy up and running by just creating new laws. The new legislation was only the beginning to the transitional phase into a much more conservative presidency of Donald Trump.

By now you might be thinking, “how could one of the most liberal presidents in history aid in electing a polar opposite to commander in chief?” It’ really quite a simple equation to solve. Because the Obama administration place so many legislative restrictions on lenders and borrowers, it stifled the average American citizen’s right to their slice of the pie. The new legislative policies made it nearly impossible for any individual, including very wealth citizens, to partake in economic investments and bargaining. As a result, the American citizen’s desired a change in leadership in hopes of restoring their opportunity to achieve normal American life goals like buying a car, going to college, and purchasing a home. In essence, they wanted a sense of prosperity and Trump was the poster child of a self-made billionaire who originally borrowed enough money to create what would become one of the largest empires in the world economy. His voters wanted that same opportunity to become a self-made successful citizen. As for me and my house, I’ll choose to stick to a down payment of 20% and fixed mortgage until I become a self-made billionaire who can afford gold etching on my toothbrush.

Sources:  Locke, John, 1632-1704. The Second Treatise of Civil Government and A Letter Concerning Toleration. Oxford :B. Blackwell, 1948. Print.

 

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