3 of 7

No

Write now Article Tools

The meltdown and financial crisis in wall street was caused largely by mortgage crisis in the US. The sublime mortgage crisis came about as a result of a squeeze in the global credit market resulting from a contracted squeeze in the banking institutions and global credit market as well as failure of investment companies, mortgage companies and government sponsored enterprises. The collapse of such companies like Lehman brothers, AIG, Freddie Mac, and Fannie Mae was triggered by high default rates in the US housing markets in sub-prime and adjustable rate mortgages.

Among the increasing obvious reasons for the high default rates in the US housing market, is the rapid decline in the lending standards and regulations of these banks, investment companies and government enterprises, a longterm trend that continued to see the pricing of US housing market on the increase, and an increase in loan incentives such as easy initial terms that led to a lot of people who had no business owning houses acquiring one.

The reasons that the financial criss continues to exist, is not because of campaign contributions and lobbying going on in wall street. That suggestion or argument would be rather too simplistic. The fundamental reasons for the crisis goes beyond that, the housing market boom and bust sparked up a series of other concerns that have contributed to intensifying the financial crisis such as speculation in the real estate markets, high risk lending practices and mortgage loans, a failure of the US government to effectively regulate the US financial market.

It is clear that the weaknesses in the US financial market was spotted as far back as 2005, and is not an incident that has occurred over the last two years, or during the US campaign elections. I would argue that contributions by companies from the US election has increased the number of jobs available in the US, than cause credit crunch. Obama for example, has 44 campaign offices in the US, and all those offices have employees who are paid, the campaign runs adverts on in the media, which allows for a lot of monies circulating in the US. In addition the printing of campaign leaflets, shirts have all created jobs in the US.

Don't forget, all the monies raised in the campaign are spent in the US, Obama is likely to spend an estimate of $700 million dollars, this is just peanuts, when compared to the losses of $430 billion dollars reported by major banks in the US, or the bailout package that was authorized by the US senate of $700 billion dollars.

The truth be told, while the campaign contributions in the US elections for both the democratic and republican campaign would not be more than $1.5 billion dollars, the costs of the financial melt down, is estimated to be in trillions of dollars. It would be simplistic thinking to imagine that the US campaign contribution would have triggered the financial meltdown.

Learn more about this author, Araniyar Isukul.
Click here to send this author comments or questions.

Add your voice

Know something about Did campaign contributions and lobbying by the financial sector contribute to the meltdown on Wall Street??
We want to hear your view. Write now!