US CAUSES GLOBAL CRISIS

OBJECTIVES Explore events leading up to financial

crisis that struck the US and the world in 2008.

Interpret political cartoons relating to global economic crisis.

Consider the connections between globalization and the current economic crisis.

WARM UP

What have we learned about globalization so far?

Cultural, economic, political?

Effects on people?

Benefits? Downsides?

SUB-PRIME MORTGAGE CRISIS Listen to NPR report “Global Pool of Money Got

Too Hungry” and complete guided listening worksheet http://www.npr.org/player/v2/mediaPlayer.html?action=1&t=1&islist=false&id=903

27686&m=90327669 http://www.choices.edu/resources/documents/organizer_008.pdf

Global Pool of Money? Mortgage Loans? Foreclosures?

Too Big To Fail Explains It All Rap Version of Event

DOMESTIC FALLOUT? Housing Prices Decline

Foreclosures

Rising Unemployment

Loss retirement/pension

Auto industry decline

Investors withdraw from stock market, move to commodities Further tumble in stock values

Banking Crisis Bank & Lending House

failures (write off losses)

Bear Sterns & Lehman Bros bankruptcy (no $ to cover) – AIG on verge

Govt Bailout TARP - Up to $700 b

in distressed assets Stability,

confidence, reform

http://youtu.be/wVV6dzDOgQ0

POLITICAL CARTOONS In order to analyze the global impact of

the crisis, we are going to work in small groups to evaluate a series of political cartoons.

Labels: Identify or name certain things in their cartoons so that it is apparent what the things represent.

Symbolism: Use simple objects to represent larger ideas or concepts.

Analogy: Compare a simple image or concept to a more complex situation, in order to help the viewer understand the more complex situation in a different way.

Irony: Highlighting the difference between the way things are and the way the cartoonist thinks they ought to be.

MAIN IDEAS Economies are so interconnected that

failure of bullish US economy led to a series of global events.

US economy has the power to destroy the entire global economy.

With collapse of US economy, China remains as leading power. Global panic when their market shows slight weakness.

In the end, the US public will pay for Wall St errors in one way or another (higher taxes, or increased price consumer goods)

CLOSURE How is the current economic crisis

related to globalization?

Money is global – invested all overEconomies slow as credit tightened,

internatl trade declinesDrop in US demand hurts rising economiesLoss investor confidence hurts global

marketsLower interest rates = weaker dollar =

declining profits for trade partners