The global economic crisis of 2008 had a negative impact on the financial situation of all countries of the world. It occurred as a result of, and parallel to, the mortgage crisis in the US, which saw a sharp rise in mortgage defaults. After that, the mortgage crisis began to develop into a financial one and affected all countries worldwide. It led to large banks’ bankruptcies and their subsequent rescues with the help of state apparatuses. On a global scale, the crisis began to manifest itself as a decrease in production volumes and demand and prices for raw materials, which in turn negatively affected supply chains and large organizations. The purpose of the work is to analyze the impact on the economic, social, and political situation of Los Angeles as a result of the 2008 crisis.
The impact of the crisis on major cities was negative and similar to small towns around the world, including the deterioration of the financial, social, and political situation. In Los Angeles, in addition, there was a scandal after families who lost their homes found out that they had gone to the rich. It caused widespread anger and, as a result, protests demanding the capture of Los Angeles and justice (Timberg, 2018). In addition, a number of decisions were made by politicians to offset the consequences of the crisis for the city and society. These included the creation of reserve funds, financial assistance, easing credit conditions, etc.
The impact on the economy of Los Angeles was, as one may conclude, negative since the decline occurred on a national and international scale. Primarily, it concerned the inability to continue the work of buying, selling, and lending in the housing area. In turn, the crisis disrupted the economic processes responsible for the further development of this sector. In addition, food and household supply disruptions prevented people from affording certain things. The development of the city stopped, the entertainment industry did not bring proper income, and the popularity of establishments fell (Wigmore, 2021). It contributed to the closure of many businesses and therefore deprived the state treasury of potential taxes, which further worsened the situation.
In addition, it should be noted that the deterioration of the economic situation in the city has led to a number of social problems. These include an increase in the number of homeless people, as many lost their homes and did not have the means to purchase new ones (CBS News, 2018). In turn, it led to an increase in crime and social inequality. As a result, the attitude of citizens toward the government of the country and the city deteriorated, which provoked protests. Finally, there were many people requiring assistance in the form of welfare payments, food, medicine, or temporary housing. Certainly, the city government could not provide the necessary resources for all people, which led to an increase in social tension. People felt insecure and abandoned, which gave rise to aggression, increased crime rates, and social disparities.
To conclude, it is worth mentioning that the 2008 crisis was a difficult test for countries around the world and for the city of Los Angeles in particular. The crisis became the root cause of the social problem regarding the number of homeless people. In turn, it negatively affects the level of crime and social inequality. The crisis caused the government to fail to provide all people with primary means of survival.
References
Timberg, S. (2018). ‘The 2008 economic crash hit L.A.’s cultural institutions hard. 10 years later, many are bouncing back — and thriving’. Los Angeles Times. Web.
CBS News. (2019). Why LA’s homeless population spiked in the wake of the 2008 financial crisis [Video]. YouTube. Web.
Wigmore, B. A. (2021). The financial crisis of 2008: a history of us financial markets 2000–2012. Cambridge University Press.