Describe the Global and Historic Economic Recession (Essay Sample)

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Summary
The article focuses on the economic recessions and the factors leading to a slow recovery from the global economic downturn. Between 2007 and 2008, the world experienced a historic economic recession. Many sectors of the economy experienced a shock in their operations leading to the shrink or even the closure of the firms. Firms such as the banking and the insurance industries were the worst hit by the recession. The goods-producing industries were also not able to stand since the consumers did not have much of the disposable income to purchase the commodities. The aftermath of the economic recession was a great change in policy. The political welfare of numerous countries also changed where many politicians are concerned with creating policies that promote social welfare.
One of the policies that led to the global economic recession is the monetary policy. Before the great recession, banks and the mortgage sectors of the economies in the United States of America and from the huge economies of the world were promoting the lending of money to the working class. For example, most of the working class in the United States of America was taking a mortgage to buy houses. In this case, it was taking longer for the mortgagers to repay their mortgages. The impact of this experience was that the financial institutions were having a hard time in their operations as their working capital was diminishing. During the recession, the financial institutions were forced to change their monetary policies. They began to encourage more savings from their clients as well as releasing little funds as loans and mortgages. This policy was essential in ensuring that countries come out of recession, though slowly.
The second cause of economic recession resulted from the political decisions that were undertaken by the world leaders, especially those controlling huge economies. Politicians are social leaders who seek to retain their political seats. They can only do so by ensuring that they have given the electorate suitable policies that will encourage development. Sometimes these policies may have a huge effect on the general economy of the country and the world at large. Therefore, they are required to consult the financial professionals on the best possible policies. Before the 2007-2008 economic recession, most of the political leaders, especially those from the great economies of the world were not making the suitable policies. It is important to note that politicians are the main policy makers in different countries. For example, in the United States of America, the government was working to ensure that e...