Milton Friedman And The Market Crash

The 2008 economic crash is something that almost all Americans had never experienced, and its impact was felt by all citizens of the United States. America hadn’t struggled this severely to keep itself afloat since the 1930s Great Depression. Although the crash happened after his death, Milton Friedman advanced his ideas to the public about how over regulation was one of the great causes of this market crash. He would still admit that there was other factors leading to the minor depression (like how easy it was for almost anyone to get a mortgage). He agreed mostly with other conservative economists that the government’s looming presence in the nation's economy caused the financial crisis. Friedmans rationale behind the crash explains that

The idea behind this concept the question of whether businesses should risk everything they have if they know the government will be on their doorstep to bail them out. In the early 2000s, this is exactly what happened with many banking giants. They realized federal bailout would be an easy option if they went under, and as a result many corporations also adopted this ideology. The main problem with this is if all corporations do this, the government will run into a wall and either have to give them money that they don't have (risking the nations financial stability) or be unable to bail them out (putting all of these banks under that millions of Americans rely on). That is why an economist like Milton Friedman would argue that there shouldn’t be any Wall Street bailouts in the first place. They create a toxic system where companies rely on the government thus they will not be held accountable for commencing with risky, foolish

Everyone was pointing fingers at all, for trying to figure out who is truly at fault for this. Friedman would argue that the Housing and Urban Development is one of the root causes for the financial crisis. Since the 1990s, the government has been trying to expand the housing market and open the opportunity to purchase a home to all Americans. They forced 2 mortgage giants, Fannie Mae and Freddie Mac, to give out “affordable housing loans” which required them give mortgages to people with most likely a poor credit score, and thus these loans were a bigger risk. This defies the principle of modern conservative economics (something that Friedman laid much of the groundwork for). This lack of economic freedom for these two mortgages companies was one of the major contributing factors to what brought them down, and could have easily been prevented if the government did not force them to give out toxic mortgages.
Another point the Friedman would argue is one that has less to do with economics and more with the lack of knowledge that many Americans had in basic economics. Many people who signed these outrageous mortgages had no knowledge on how they even work, thus they were not informed with the many things that could go wrong with their mortgages. The matter at hand here is that yes pure economic reasons are something that did play a great role in