Deregulation In The 1970's

In the late 1970’s a new neoliberal form of capitalism began to emerge. It had the following features:
● deregulation of business and finance this was to allow the free market to rule and to achieve free mobility of capital
● privatization of many state services;
● sharp reductions in state social spending;
● significantly lowering corporate taxes and giving tax breaks to wealthy individuals
● unrestrained competition which replaced the “co­respective behavior” (which stands for: behavior by a company which avoids cutthroat competition in favor of a live­and­let­live attitude to competitors).
Financial deregulation has always been in high demand by large corporate interests, because they want to be able to move their capital around freely.

However, the housing bubble of the 2000s was massive, and the consequences of the major correction would accordingly be huge.The housing industry seemed so rock solid. It seemed like it would’ve kept on going up for many years. It had been a well known and integrated part of the American culture to own a house it has been that way since the 1930’s when the government started providing tax subsidies on mortgages for those who did. Almost 63% of the Americans own a house, while in a country like Switzerland it is 22%. However, identifying the specific cause of the end of the housing bubble is not of central importance here. As is the case with all asset bubbles, the housing bubble of the 2000s was bound to deflate at some point. As the saying goes: “Whatever goes up surely must come down”. Once the housing bubble began to deflate, all of the foregoing trends would become unsustainable. Along with it’s deflation of all the stock indices the housing bubble would take down a large number of households who could

So these reckless decisions made by bankers on wall st. based on fear and greed would affect household on a local level all across The United States. The increasingly fragile financial sector could not survive the deflation of the housing bubble. The evidence suggests that we had seen more than just a severe financial crisis and a severe recession. We were actually experiencing a crisis of neoliberal capitalism. The ability of neoliberal capitalism is to promote expansion of output and profits appears to have reached its end. Another expansion, within the existing neoliberal model, would require a new asset bubble even more massive than the housing bubble, and it is difficult to imagine how this could arise, for we have seen the aftermath of such things. Further, the deregulated financial system of the neoliberal model, which would have to play a key role in any new asset bubble, had been unable to survive the collapse of the latest one. Most of the major U.S. financial institutions have needed large government bailouts, and the assets of the financial sector have underwent a massive shrinkage. while the us government followed a neoliberal policy, at the same time the mechanics of the stock market with the Bulls and the Bears didn’t really care about government policy because neoliberalism encouraged things such as deregulation and privatization there was this gap of