I don’t know enough about the financial crisis here in the U.S. to explain why our economy is having so many problems, but I can explain some of the headlines (titles) that have appeared recently in U.S. newspapers for those of you who are interested in reading the news in English.
Here is the main (most important, largest) headline from today’s Wall Street Journal:
Bailout Plan Rejected, Markets Plunge, Forcing New Scramble to Solve Crisis
Let’s begin with bailout. To bail something/someone out literally means to remove water, usually from a boat or ship that has a leak (where water is entering the boat and causing it to go down or sink). A bailout (noun), however, is when you give money to someone or some company to help them when their business is failing. The U.S. government has been giving money to large financial companies to prevent them from failing in the past two weeks. Yesterday, the U.S. Congress (the part of the government that makes and approves new laws) rejected or said no to a plan to provide even more money to these businesses. Because they said no, the stock markets plunged. To plunge means to go down very quickly or rapidly. You can also use plunge when something goes down in the water very quickly. Plunge is similar here to the verb to dive, which again means to go down quickly.
So the bailout plan was rejected by the U.S. Congress, causing the stock markets to plunge. Now what happens? Well, the U.S. government has to find a new solution, so they are looking desperately – scrambling – to solve this crisis or serious problem. To scramble, then, means to move quickly after something goes wrong, usually something you didn’t expect to go wrong. Many people thought that Congress would approve the bailout plan, so when it failed to pass yesterday, there was a scramble to find a new solution.
The New York Times‘ headline was similar:
Defiant House Rejects Huge Bailout; Stocks Plunge; Next Step is Uncertain
A defiant person is someone who disobeys or says no to something. The House refers to the House of Representatives, which is one half of the U.S. Congress (the other part is called the Senate). So the House rejected the large or huge bailout plan, the stock market plunged, and now no one knows what will come next. The next step or action for the government is uncertain.
~Jeff
The all things we can see now in the U.S. economy are the global system crisis. Trying to explain the cause of the current crisis in some words, I can say that The U.S. has been solving his problems lately at the expense of other counties. If country has some economic problems such as high rate of inflation and unemployment, the simplest way to escape crisis is to launch a war somewhere outside the country. We can see wars in Yugoslavia, Afghanistan, Iraq under the banners of fight for democracy. Some of them continue ( Afghanistan, Iraq ). For some period of time after a war, we can see the improvement of economic situation in the country, because military orders can reduce unemployment and slow down inflation. But it is temporary. How the crisis can be solved again? Find, where are countries living without so-called democracy. Now, there is no need searching these countries. The U.S. has already found it. There are Iran and North Korea. Then the U.S. will find somebody else etc. This is vicious circle.
After the end of World War II, when military production was reduced, the U.S. had high rate of inflation and unemployment. Now remember Korea and Vietnam.
Now the quote of the film Zeitgeist is coming to my mind. « What do you think Americans brought to Iraq after occupation – food, equipment, machinery? No, they brought money». So, their inflation problems they solve at the expense of riding of extra money in circulation through wars. I recommend seeing this movie. It is very easy to download it through the web.
I hope that we don’t miss the podcasts because US Financial Crisis. Bye
Dear Dr. Jeff,
On the first line of your report, you have mentioned that you don’t know enough about the economic crisis. Dosen’t this show that you are wealthy enough that do’t feel such a economic pressure on your shoulders? Hope so ! We wish a rich Jeff and Lucy with a lot of health, money, luxury cars, large and beatiful houses withiout any mortgages and with a lot of pretty and beatiful children and grandchildren !!
very useful! yesterday i was reading about Bail-out in BBC web site, and i didn’t have clear what the word means
Adam Smith & Milton Friedman must be turning in their graves.
We have a proverb in my country, Taiwan: “If US sneeze, all the world will catch a cold.”, which means US affects the world a lot.
It’s true!!! Now all the world have got a heavy cold.
Ariel from Taiwan
Thank you Jeff, I have read the titles on N.Y.T., and it is really difficult to understand what are they saying about, and now you have explained them perfectly. I think understanding the news tittles is one of the most difficult things to do for us, that English isn’t our language.
This crisis was announced more than a year ago, I could remember we have talked about it many times, and here at my country everybody was asking for approving the
bailout plan.
I was admired for the attitude of the U.S. Congress, they are really independent and no robots at the party’s or president’s orders. BRAVO for them.
Here we do not need Congress or something similar as they always press the button following parties orders.
My question and my concern is: are lawmakers qualified in order to understand the seriousness of this financial crisis?. Are they qualified to vote in relation with an issue they really do not understand?. Appearances are misleading, they defeated the bill because of partisanship, after an inopportune speech given by speaker Ms. Pelosi.
my name is Ahmad I’m from Saudi Arabia. thinks for this post.. it’s really useful for me because I’m a finance law student.
Thanks Jef for explanations
Dear Den,
I absolutely agree with you. Unfortunately the US has been involving in several blood sheding wars in different countries during the past decades. I these wars so many poeple were killed, and even much more people were injured. This policy should be stopped and this will never happen unless all nations and pcifist groups around the world come together and get united aginst this policy (policy of human killing). The united states is not the police of the world and doesn’t have the right to dictate to other countries what to do.
And about Iran (I am Iranian), I should say Iran is not as weak as you think. As you may know, Saddam (the dictator of Iraq) who was the best freind for the US at that time and received a lot of military help from the US started a 8-year long war aginst Iran and killed several houndred thousands of Iranian poeple and injured many of them (even with chemical weapons) and destroyed many beatiful cities couldn’t defeat Iran. Iran has the oldest civilization in the world, with a young and egucated population and a strong base of economy and great resources, and eventhough our goverment is not democratic enough, and we are aginst many policies of this goverment, but all Iranians are united aginst foriegn intervention in their country (even Iranian poeple who are against this regime). Iran is not comparable to Iraq or North Korea. So, don’t worry about that. The united states colud never attack Iran, and if it did, the results would not be in favor of the united states.
yours,
Ghasem, from Iran
This is right time to issue a podcast about this subject based on the media information and other sources, it recalled me the podcast named Stock Market, where Lucy and Jeff clarified several terms and vocabulary related to this matter.
It seems that this crisis will last for a while, and the problem is who is going to bear it, namely, the shareholders and executives of these banks or the John Q citizen; and don’t forget the role played by the regulator agencies which failed in supervising these financial institutions and its operations. Criminal responsabilities must be determined, it is unfair as some people said that Main Street rescues Wall Street.
As for the solutions I regret to say that Den is right… History doesn´t lie.
Rodrigo, from Venezuela
Hi Den,
could you please lt us know the web site for downloading the Zeitgeist.
Thanks,
Sara
As a matter of fact I think this is not the appropriate place to talk about some things that may be offensive for other people that have nothing to be with their Government behaviour.
After all USA is a democracy where people may change their representatives and president every few years, not like other places where citizens can’t do anything similar.
Compare with the global economy tumble, I am more afraid of China’s contaminated products, which are detrimental to our health seriously. It’s appalling!!!
My dear freind Emiliano,
You mean that because the united states president is elected democratically, he/she has the right to invade other nations and countries? I can’t believe it! I’m sorry, but you are absolutely wrong! Yes, the us people can change their goverment, but who will pay to so many poeple who were killed or wounded in Iraq? This against the democracy.
Ali, no I don’t of course, what I mean is that people of u.s.a. may change their goverment and their president if they don’t agree with them. Just what they are going to do I hope. Alse that usa is quite a big nation with 300 million people from all over the world and what their president and goverment do there are always millions of usa people that are not willing to accept. Also there are millions that don’t agree with the invasion of Irak, Vietnan war, violence or other bad things politicians may do along years,
So generalize about people from a country, or just about a country, is not fair, and I mean this for all countries of the world, as Irak, Iran, Usa, Spain or which ever country you may imagine. So please, don’t offend these all people that are in desagreement with their politician, but love their country, their flag, and everything about their land.
I am in disagreement with our goverment or president just now in Spain, and so are a lot of people here. If they do somthing wrong out here it is not appropiate that ee are judget for the bad things the may do. Same with usa people, and of course invasion of Irak was horrible like many other terrible wars.
When Franco was here in Spain, if we go out to Europe we felt some lack of respect to spaniards because europeans citizens were against spain just about Franco and so on. So please, that was not my fault and on those years I was insulted sometimes if I traveled outside.
Someting similar is happening with americans when they travel outside their country u.s.a., and this is not fair.
Also I think Ali that there are other places to talk about all these important things, not here in a blog so marvellous that is made by our good american friends Jeff and Lucy.
This is my opinion, Ali, but I respect yours and others.
Regards.
Dear Emiliano,
Thank you for your explanations. We are not talking about people or nations. We are talking about goverments, plicies and politicians.
I am in the USA right now. Many American people are against the policies of their goverment. I don’t have any idea about the guys who work in the ESL Podcast. I love them, and may God bless them. But I don’t think our exchange of ideas about this important problems causes any insult to them. We all respect so many achievments of American nation. Without any doubt, America is the leader of technology progress and democracy in the world and the USA is the symbol of freedom. No argument about it. The problem is that we should not accept this dangerous thought that every goverment who was elected democratically by his/her own nation, has the right to dictate everything to other nations. We should not forget that so many criminals were first elected by thier nations democratically. Democracy means that each goverment should serves it’s own nation inside it’s border, and if it could or want, helps other poeple to achieve it, too.
My freind Emiliano, yes American poeple can change thier goverment and may do, but the change of the govermnt in tha USA will not change the situations of so many killed or wounded poeple in countries like Iraq. We sholud consider that every body in the world has been bornd only for one time and will never come back to the world again, and this is the first and last chance for him/her to live in peace, health, and prosper. No body can take this chance from any body else, but unfortunately many politicians do not respect this law. Hope you, your nation, and your beautiful country live in peace and prosper. God bless you.
I agree absolutly with you Ali in all you say now, of course, and it is true because sometimes some politicians are shoosen by people democratically as Hitler for example,that was elected so., also Bush was one of the most voted president on second chance, and they are fatal for ever and by all means.
I have to thank you also your explanation that is now clear to me and beside we think just the same like you, in this way is good that we may talk some way about
so important matter like those. I lived the Vietnan war here in my country but I was very affected by it, I was very young then, and I know how much contest against it
were in usa those years, also here and everywhere. Many young american boys went to Canada or Swiden or other countries just to not be called by the army. It was deadly for so many hundred thousand people, so it is impossible not to agree with your point of view.
You are living in usa, but if you were living in Spain, or Europe, may be you were a little fed up with so many indiscriminates critics agaist americans, usa, and all that may
be related with their customs, country, movies and so on. Of course not everybody here or in Europe thinks so, but I know just a lot of people think so and I have listened that ideas for to many years, even I have friends who think and talks that way, once and again, and going on with the same matter without rest. Some of them don’t want go go to usa because they hate the country and people. It’s real despite you may be surprised.
So I am sensitive about this matter. That`s all, we may talk about politicians, Bush, Zapatero, Berlusconi…or son on, but not generalize about nations, people. You know perfectly well now what I mean, even have in mind that I have lived for so many years without democracy (33 years of my life) and we were as good nation and persons as we can be now.
Thak you Ali, it has been a pleasure to clear up this matter with you and at the end we think just the same. Sure we could talk more in future.
God bless you also, I feel you are a good chap.
Thank you again, Emiliano. Your comments were great. I think websites like this are good places to discuss, share, and exchange our ideas with respect and without offending each other.