Economy+Troubles+and+the+2008+Election

Catastrophic Crashes and the Housing Market Disaster
America’s next challenge did not come from war or natural disaster, but from the economy. By 2008, many banks had allowed mortgages to be given to subprime borrowers (those with lower credit scores.) However, as interest rates on the mortgages rose, foreclosures of these homes occurred. The banks who lent the money were near collapse due to the monetary loses that resulted. Eventually the entire housing market faced problems, and a recession began as a chain reaction started to affect other areas of the economy. There were rises in unemployment, and drops in the stock market. The damage to the housing market due to the mortgage crisis caused damage to the mortgage companies Fannie Mae and Freddie Mac. The car market was also affected by the recession, leaving GM, Chrysler, and Ford on the verge of collapse.

The Economy and the 2008 Election: McCain versus Obama
2008 was an election year, and the economy weighed heavily on the minds of voters. The two candidates were Democratic Illinois Senator Barack Obama, the first African-American to receive the nomination of a major political party, and Republican Arizona Senator John McCain, a veteran of Vietnam who had survived a Vietnamese prison camp. Obama’s campaign focused on the idea of change and portraying McCain as a supporter of some of Bush’s more unpopular decisions. McCain’s campaign focused on helping and understanding the struggles the average American faced during this difficult time. After the election, it became evident that Obama’s message of change had resonated with the people. Obama won the election and became the 44th president and the first African- American elected president.

The Beginning of a New Era: The Presidency of Barack Obama
On January 20, 2009, a huge crowd gathered in Washington D.C. to witness the historic moment. Barack Obama took the Oath of Office, using the bible that Abraham Lincoln had used when sworn into office. Many felt that his story was a true example of the American Dream and the dream of Dr. Martin Luther King. Obama addressed the crowd of citizens and political figures with a message of encouragement, and traced the challenges past generations to the challenges faced by the nation in 2009. He stated that overcoming the challenges would not be easy. Obama said of the past generations that built the foundation of the country:

“For us, they packed up their few worldly possessions and traveled across oceans in search of a new life. For us, they toiled in sweatshops and settled the West; endured the lash of the whip and plowed the hard earth. For us, they fought and died, in places like Concord and Gettysburg; Normandy and Khe Sanh” (“Barack Obama: Inaugural Address”).

Obama had many issues to face: the economy, healthcare reform, the wars in Iraq and Afghanistan, the environment, etc. Many were optimistic about Obama’s term in office. Obama faced the challenge of the economy by authorizing large bailouts to banks and the auto companies. Ford did not take bailout money and reported a profit in the third quarter of 2009, GM sold 4 brands (Saturn, Pontiac, Saab, and Hummer,) and Chrysler negotiated a merger with the Italian car company Fiat. However, the bailouts were extremely controversial due to the large increases in the federal deficit that resulted from the bailouts. Obama then turned his attention to the issue of healthcare reform. In September 2009, in a televised speech, Obama presented his plan for healthcare reform to the general public. Many Americans had hope that the challenges of the decade would end in a better future.