AMERICAN
HISTORY: The Great Recession and the 2008 Election
STEVE EMBER: Welcome to THE MAKING
OF A NATION -- American history in VOA Special English. I'm Steve Ember. This
week, our series brings us to the events of two thousand eight. It was a year
that combined one of the nation's worst financial crises with one of its most
exciting elections in recent history.
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In two thousand six and two thousand
seven, the American housing market began to collapse. Home values had been
going up and up. Now the balloon burst.
People started losing homes they had
bought with money borrowed on easy credit terms -- loans they were then unable
to repay.
The hope was that the crisis in the
housing market could be contained, and that it would not spread to the wider
economy.
Traditionally, local banks would
have suffered the losses on the bad loans. But times had changed. Big
investment banks had been buying those loans. The investment banks then resold
them as securities offering high returns.
Credit rating agencies working for
the investment banks had told investors that the securities were safe. Selling
a financial product based on a large group of loans was supposed to limit the
risk if a few loans went bad. That was the idea. But that was before millions
of homeowners stopped paying their mortgage loans.
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Mortgage-backed securities became
known as toxic assets. No one wanted to be anywhere near them.
AP
Bear Stearns was the first major
investment bank to fail in the housing crisis
In March of two thousand eight Bear
Stearns became the first investment bank to fail as a result of the crisis.
Others followed.
In September, Lehman Brothers, the
nation's fourth-largest investment bank, sought protection in bankruptcy court.
Its failure only deepened the fears in credit markets.
Toward the end of two thousand eight
an international credit freeze developed. No one wanted to take the risk of
lending money to banks or other companies that might have owned toxic assets.
Some people feared that there could even be a global depression, the first
since the nineteen thirties.
The United States economy -- the
world's largest -- started shrinking at the end of two thousand seven. The
unemployment rate started rising.
President George W. Bush's
administration, Congress and the central bank, the Federal Reserve, took
extraordinary steps to deal with the growing financial crisis. Their efforts
included loans to banks, automakers and other companies. The aim was to rescue
businesses that officials considered "too big to fail."
The bailouts from Washington were a
decision that not all of the American people agreed with. But the people also
had to make a decision of their own in two thousand eight. It was a presidential
election year, and the candidates were some of the most diverse in the nation's
history.
The Republican Party nominated
Arizona Senator John McCain. At seventy-two he would have taken office as the
nation's oldest first-term president.
JOHN MCCAIN: "So stand up with
me, my friends, stand up and fight for America, for her strength, her ideals
and her future. The contest begins tonight!"
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Senator John McCain at a campaign
event in 2008
John McCain had been a Navy pilot
during the Vietnam War. In nineteen sixty-seven, the North Vietnamese shot down
his plane and took him prisoner. He was tortured and held for more than five
years. He returned home a hero.
During the presidential campaign, he
spoke often about his experience as a prisoner of war. His campaign message
was, "Country First." Senator McCain quickly secured the Republican
nomination to succeed George Bush.
The Democrats needed more time to
choose a nominee. The race settled on two leading candidates. One of them was
Hillary Clinton. Her husband was former president Bill Clinton. They spent
eight years living in the White House. As first lady she held an unusually
public role in her husband's administration. Later she was twice elected as a
senator from New York. Now she was trying to return to the White House -- this
time as the first woman president of the United States.
Senator Hillary Clinton campaigning
in 2008
HILLARY CLINTON: "So if you
want a winner who knows how to take them on, I'm your girl!"
The other leading candidate for the
Democratic Party's nomination would also make history if elected. He was a
first-term United States senator from Illinois named Barack Obama. He was born
in Hawaii to a white mother from Kansas and a black father from Kenya. If he
won, he would be America's first black president.
Blacks in the United States had been
slaves until eighteen sixty-three. They were not permitted to vote until
eighteen seventy. Women in the United States did not have a constitutional
right to vote until nineteen twenty. And not until the nineteen sixties did
federal civil rights laws bar discrimination against either group.
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During the nominating fight between
Hillary Clinton and Barack Obama, there was a lot of discussion and debate in
America about gender and race. Some talked about the problems that women still
faced in society, and wondered whether Americans could accept a woman as
president. Others talked about the problems that blacks still faced in society,
and wondered whether Americans could accept a black man as president.
PEOPLE: "I think we're ready.
Oh, I hope we're ready." "I just hear people's comments that that
will be the day when we have a black man running our country." "I'm
not sure. I'm really not sure."
Candidate Obama gave a speech about
race in America.
BARACK OBAMA: "I am the son of
a black man from Kenya and a white woman from Kansas. I was raised with the
help of a white grandfather who survived a Depression to serve in Patton's Army
during World War II and a white grandmother who worked on a bomber assembly
line at Fort Leavenworth while he was overseas.
Senator Barack Obama at a campaign
event in 2008
“I've gone to some of the best
schools in America and lived in one of the world's poorest nations. I am
married to a black American who carries within her the blood of slaves and
slave owners - an inheritance we pass on to our two precious daughters.
“I have brothers, sisters, nieces,
nephews, uncles and cousins, of every race and every hue, scattered across
three continents, and for as long as I live, I will never forget that in no
other country on Earth is my story even possible.
“It’s a story that hasn’t made me
the most conventional of candidates. But it is a story that has seared into my
genetic makeup the idea that this nation is more than the sum of its parts -
that out of many, we are truly one.”
Many political experts predicted
that Barack Obama would lose the nomination. For one thing, he was still new to
many Americans while almost everyone knew who Hillary Clinton was. Also, she
had many wealthy supporters donating to her campaign. But political scientist
Larry Sabato at the University of Virginia said those experts did not
understand the country's mood.
LARRY SABATO: "They
underestimated the power not just of Barack Obama, but also the yearning for
change and the antipathy toward dynasty -- the idea that the Bushes and
Clintons would essentially control the presidency from 1988 to potentially
2016."
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"Hope" and
"Change" became the messages of the Obama campaign. Barack Obama won
enough delegates to secure his party's nomination, which he accepted in August,
shortly after his forty-seventh birthday. His choice for vice president was Joe
Biden, a longtime senator from Delaware.
But Mr. Obama's nomination was not
the biggest news story for long. The next day, John McCain had a big
announcement of his own. His running mate would be Sarah Palin. The Democrats
had once nominated a woman for vice president, Geraldine Ferraro, but never the
Republicans. Neither party had ever nominated a woman for president.
Republican vice presidential candidate
Sarah Palin in 2008
Sarah Palin was the
forty-four-year-old governor of Alaska. Few Americans had ever heard of her
until she spoke at the Republican nominating convention. She referred to
herself as a “hockey mom.”
SARAH PALIN: "I love those
hockey moms. You know, they say the difference between a hockey mom and a pit
bull. Lipstick."
Some women said they admired her
ability to balance work and family as the mother of five children.
ANGEL VOGGENREITER: "I feel
like she really speaks for me and represents me."
During the campaign, Barack Obama
raised a record amount of money for a candidate -- about seven hundred
forty-five million dollars. He became the first candidate to reject the modern
system of public financing of presidential elections. Instead, he accepted
smaller contributions from hundreds of thousands of supporters. His campaign
made extensive use of the Internet to collect donations, connect with voters
and organize volunteers.
John McCain did not have as much
money to spend. Something else also set him apart from the Democratic nominee.
John McCain supported the wars in Iraq and Afghanistan. Barack Obama said he
would bring the troops home from Iraq within two years of becoming president.
But the top issue in the campaign was the economy. Again, Larry Sabato at the
University of Virginia:
LARRY SABATO: "The fundamental
issue in most presidential elections is the economy. It really is the economy,
stupid — the old slogan from the 1992 Clinton campaign. When an administration
has a positive, strong economy, they're tough to beat -- even if it's a
non-incumbent running. But when the economy turns sour, they're halfway out the
door."
Barack Obama and John McCain agreed
on at least one thing in dealing with the economy. They both supported President
Bush's call for the government to bail out the financial industry. Many
Americans disliked the idea of helping banks that had acted irresponsibly. But
Congress agreed to let the government buy bad loans from banks and temporarily
became part-owner of some rescued companies. Supporters argued that the
bailouts were needed to save the economy from collapse.
In November of two thousand eight,
Americans elected Barack Hussein Obama as their forty-fourth president. He
received fifty-three percent of the popular vote. He won some states that had
not chosen a Democrat in many years. A little more than sixty percent of
voting-age Americans cast their ballots, the highest percentage since nineteen
sixty-four. Support for Mr. Obama was especially strong among young people and
African-Americans. Many voters were emotional on election night.
CALIFORNIA VOTER: "I'm
speechless. I'm trying not to cry right now. I'm thinking of my
great-grandfather, my grandmother. Man, this is amazing."
BARACK OBAMA: "Because of what
we did on this day, in this election, at this defining moment, change has come
to America."
But the election of two thousand
eight was not the end of America's economic problems. What became known as the
Great Recession would officially end in June of two thousand nine, six months
into the new president's term. But its lasting effects would continue to be
felt all the way into the twenty-twelve election season.
And that brings our history series
to a close. We will start over again. But over the next several weeks, we’ll be
presenting a special “best of” series. Each program will be a time capsule of
life in America from the decades between the two world wars through the end of
the twentieth century.
We’ll look at social trends, the
arts, music and other areas of popular culture. We hope you'll join us for this
special series, before we begin our new series of programs. You can find all of
our programs online at voaspecialenglish.com.
