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Great Recession: Political and Socioeconomic Effects Essay

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Updated: May 4th, 2021

Introduction

Economic conditions have a strong impact on the development of countries. At times of crises, people face issues such as unemployment, loss of income, reduced buying power, and more. One of the most recent examples of such events is the Great Recession, which peaked around the time of the 2008 economic crisis. The Great Recession was characterized by a long-term economic decline, which was particularly evident in the United States.

The period of the Great Recession and its aftermath affected the lives of millions in America, causing an increase in unemployment due to financial losses associated with the crisis. The Great Recession also influenced the public’s perception of democracy, as many began to think that the democratic government was incapable of supporting the country’s economy and returning it to a stable position.

A similar historical example can be observed in the period of the Great Depression, which hit the United States around the 1930s. In parallel the Great Recession, this period affected the economic, social, and political environment of the country. The Great Depression began when the stock market crashed in October 1929, leading to billions of losses in market value (Foner). The crisis also affected the political landscape of the country, which caused people to question the reliability of the government in managing an economic crisis.

The present essay will explore the issue of the Great Recession, focusing on its representation in news articles and its similarities with the Great Depression. The main argument of the paper is that the effects of the Great Recession on the economic, social, and political climate in the country were similar to the ones caused by the Great Depression in the 1930s.

Social and Economic Impact

The Great Recession had a significant impact on the American society, particularly due to job losses and decreased household income. For instance, Warner reports that “the net worth of the average American household has shrunk by about 20 percent”. Therefore, the Great Recession and the economic disruptions associated with it had a profound impact on family life, particularly in middle and low-class families. The fact that these socioeconomic groups were affected by the recession more severely than the affluent populations worsened income inequality and the gap between the rich and the poor in the United States (Warner).

Increased social inequality was also evident during the period of the Great Depression. Similarly to the Great Recession, the Great Depression occurred in the context of significant economic inequality, thus leaving middle and low classes poorer than ever before (Foner). The effects of both crises on the American society were also worsened by unemployment. In fact, after the Great Recession, unemployment in the United States reached its highest level since the end of the Great Depression (Warner). Widespread unemployment in both cases was caused by losses in market value and bankruptcy of thousands of American businesses. Those companies that stayed in business were forced to cut their costs by reducing the workforce, which left millions of people without income and unable to find a job.

Overall, the effects of the Great Recession and the Great Depression on the American society were rather similar. Both events triggered job losses, which resulted in reduced income and record-high unemployment. Moreover, the two crises impacted the structure of the American society itself by increasing the gap between various social classes.

Political Impact

Both the Great Depression and the Great Recession had a strong influence on the political climate of the country. In particular, Schnurer argues that the recession has greatly shaped politics and laid the foundations for the Republican victory of 2016: “the upheaval today – not just in the U.S., but across the globe – has to be understood as a direct result of the Great Recession and its aftermath”. The reason for the impact of the Great Recession on politics was the change in people’s understanding of social and economic inequality after the crisis.

Before the recession, income inequality was widely accepted, as people perceived that some of the richest people in America earned their position using their knowledge of economics and their efforts to keep the economy from collapsing (Schnurer). However, the recession proved this opinion to be untrue, as the vast majority of the actions taken to revive the economy and prevent the crisis were futile. This shift had a profound impact on politics, as the public began to express skepticism towards the Democrats and favored the Republican agenda.

In a similar way, public attitudes towards Hover changed as the result of the Great Depression. Hoover’s response to the recession was widely deemed to be inadequate. Like the American government during the period of the Great Recession, Hoover opposed federal intervention in the economy and relied on private businesses to take steps to recovery (Foner). However, this strategy was not effective in granting an immediate relief to the population, causing the social and economic struggles to continue for almost a decade.

Long-Term Consequences

Lastly, it is clear that a major crisis such as the Great Recession or the Great Depression will have long-term consequences for the country and the society. For example, although the American economy has improved since the recession, some of its effects are likely to persist (Casselman). One of such effects is the economic inequality in the society. As shown in multiple studies, most of the areas that were significantly affected by the Great Recession still experience high rates of unemployment and low household income (Casselman).

One of the reasons for these long-term challenges is that the rate at which the economy approaches its pre-recession state is rather slow. Increased turnover and declining entrepreneurship, mainly caused by the economy becoming less dynamic and flexible to adapt to economic changes, were also among the economic impacts of the recession (Casselman). This affected the ability of the American economy to return to its normal state, thus causing lingering effects in the society.

In some aspects, the effects of the Great Depression on the American society and economy were also long-lasting. For instance, the Great Depression was associated with a decline in foreign trade, which assisted in the development of domestic businesses in the second half of the 20th century (Foner). As described above, the Great Depression also contributed to economic inequality, unemployment, and poverty in the country. Despite numerous efforts to address these issues, many areas were still struggling with the aftermath of the crisis for decades after the economy had stabilized.

Conclusion

Overall, the analysis of the issue shows that the political, economic, and social effects of the Great Recession were similar in their significance to the ones experienced during the Great Depression. Using a variety of articles on the Great Recession, it was also possible to analyze the issue from various perspectives. For instance, whereas Warner’s article was written in 2010 when the short-term effects of the recession were especially prominent, Schnurer and Casselman write from a contemporary perspective, examining long-term consequences of the Great Recession on the society and politics.

The language used by writers also contributed to the exploration of democracy in the context of the Great Recession. In particular, all of the articles studied mentioned the inability of the Democratic government to provide a sustainable and effective solution to the Great Recession and its consequences. The exploration of the topic showed how the ideals and practices of democracy were largely irrelevant during a major economic crisis. In addition, the essay portrays how democracy can lead to unfreedom by failing to address social and economic issues in the aftermath of a crisis. However, the democracy also provided an opportunity for the people to impact the economic environment of the country by shifting to the Republican government in 2016, thus partly fulfilling its promise of freedom.

The analysis also portrayed how economic and political crises that occurred at various points in history influence the perception of democracy by the society. Before the Great Recession, people trusted the elected government to support the country during an economic crisis. After the Great Recession, however, people voted for the government that promised to listen to their concerns and to address the persistent economic and social issues caused by the crisis. On the whole, a detailed analysis of the topic helped to explore the topic of democracy and its influences on the country and the society.

Works Cited

Casselman, Ben. “New York Times. 2017. Web.

Schnurer, Eric. “Politics Are Not Recession-Proof.” U.S. News. 2016. Web.

Warner, Judith. “New York Times. 2010. Web.

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"Great Recession: Political and Socioeconomic Effects." IvyPanda, 4 May 2021, ivypanda.com/essays/great-recession-political-and-socioeconomic-effects/.

1. IvyPanda. "Great Recession: Political and Socioeconomic Effects." May 4, 2021. https://ivypanda.com/essays/great-recession-political-and-socioeconomic-effects/.


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IvyPanda. 2021. "Great Recession: Political and Socioeconomic Effects." May 4, 2021. https://ivypanda.com/essays/great-recession-political-and-socioeconomic-effects/.

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IvyPanda. (2021) 'Great Recession: Political and Socioeconomic Effects'. 4 May.

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