The following is my final for a US Economic Policy course I took where we learned about the 2008 financial crisis and the neoliberal policies that lead us there. We also learned about the racial factors that played a roll in mastering the mortgage backed security loans that largely contributed to the crash and a plethora of other economic history that has led to modern circumstances.

Dear Reader,

In modern American Society and around the globe, it has become increasingly evident that many individuals struggle to achieve financial stability despite maintaining full-time employment. With essential costs such as housing, food, and healthcare steadily increasing over time, wage growth has remained largely stagnant, exacerbating wealth inequality and bringing it into the public eye with movements such as Occupy Wallstreet. Earlier models of American capitalism, primarily from FDR’s New Deal to the 1970s, emphasized long-term investment in workers, their families, and the surrounding communities. Since the 1970s, the rise of financial capitalism and shareholder primacy have fundamentally reshaped corporate priorities, severely limiting workers’ ability to have a say in where the surplus they help generate goes. Stock buybacks and similar practices disproportionately benefit shareholders by concentrating wealth at the top and further lining the pockets of America’s richest families, while the workers that are responsible for creating corporate surplus increasingly face heightened economic insecurity, weakened individual bargaining power, and more authoritarian management structures, conditions that bear troubling resemblance to those of the early twentieth century in the years leading up to the Great Depression. To understand how these conditions emerged we must examine not only economic trends, but also the deliberate political and ideological strategies through which corporate power has reshaped the American state and its governing institutions in the mid-twentieth century.

The strategies used to accomplish this are best communicated by Antonio Gramsci, an Italian philosopher and politician who was imprisoned for being a vocal critic of Bentino Mussolini and fascism and ultimately perished while imprisoned after 11 years. From the 1940s through the 1970s, the capitalist class engaged in what Gramsci describes as a sustained war of position. The war of position involved gradually consolidating ideological influence within key political, legal, and cultural institutions while labor movements and New Deal era legislation remained dominant in governing policy. During this period, business interests invested heavily in think tanks, policy networks, media outlets, and academic institutions to reframe public perception around markets, government intervention, and labor rights. Some examples of organizations that are used to achieve this end are the Heritage Foundation (founded in 1973), the Business Roundtable (formed in 1972), and the U.S. Chamber of Commerce (founded in 1912 but experienced drastic changes into a political machine from 1971-1975). These organizations, whose spending is known as dark money because of their nonprofit status as a 501(c)(4)s and their legal right to not disclose their donors, spend millions every election cycle to secure the politicians and policies that benefit them and punish the average American. The Business Roundtable alone spent over $23 million between January 1^st and September 30^th[1] of 2025. These institutions also promote free-market thinking (with sayings such as “the freer the market, the freer the people”), individualism over collectivism, and market efficiency over moral authority (lack of accountability for the climate crisis and as framing democratic intervention as inherently inefficient or corrupt, aka American Capitalist Exceptionalism). However, the war of position that led to the rise of these behemoths and the deregulation that followed in nearly all sectors but specifically the financial sector, was then thrust to the backburner as the capitalist class pivoted to another strategy which Gramsci describes as the war of maneuver.

Ultimately, the long-term effect of the war of position set the stage for the subsequent war of maneuver. The war of maneuver was a more direct and decisive political offensive through which business interests embedded themselves within the Republican Party and reshaped America’s policy agenda. Ronald Reagan’s victory was a critical turning point in this process. Reagan’s response to the 1981 Professional Air Traffic Controllers Organization (PATCO) strike signaled a fundamental shift in the federal government’s relationship to organized labor. By firing the striking workers and permanently replacing them, the administration sent a powerful message: if union suppression was permissible at the highest level of government, it would, could, and should be done across the private sector as well. In the decades that followed, this moment functioned as a de facto authorization for widespread union-busting, accelerating the decline of organized labor and further entrenching corporate power over wages, working conditions, and political influence. The successful implementation of the war of position and war of maneuver leads us to where we are today. A globalized economy, gig workers, and technological advances so great they’ve caused American GDP to grow from $9.74 trillion in 1990 to $22.57 trillion in 2024[2]. Certainly, with productivity growth as drastic as that, worker wellbeing must be nearly euphoric right? Wrong.

In 2008, within my own lifetime, there was a global financial crisis that centered in the United States. The havoc and devastating loss that has resulted from the 2008 crisis, which is estimated to be $19.2 trillion lost in total household wealth, not to mention the long-term effects and economic mobility consequences, with experts expecting 66% of those who lost a home because of the crisis to never own another[3]. The origin of the 2008 crisis started in the 1990s, when couples such as Janice and Isaiah Tomlin, who married in 1977, and bought a home in Wilmington, North Carolina a year later. In the 1990s, the neighborhood was now a predominantly black neighborhood since white flight occurred since the late 70’s when black families such as Janice and Isaiah moved in on Creecy Avenue. As the Tomlins lived, worked, and continued to put equity into their home and the neighborhood went through changes, phone calls started coming in about people marketing refinance loans. Like many parents, Janice wanted to do anything in her power to send her children to a religious school and first looked at her nest egg to finance the tuition. During the time I was being born, in early 1998, Chase Mortgage Brokers continually called the Tomlins, eventually getting Janice to agree to an appointment. As any lender should, Chase had fiduciary duty to find a borrower the best loan they can provide. However, they didn’t deliver. Chase held a secret arrangement with a single lender known as Emergent. Regardless of how low an interest rate a borrower may have qualified for, if the salesperson at Chase could sell them a higher-priced loan, they received more a commission. To the unknowingness and downfall to the Tomlins, they refinanced their dream home into a subprime mortgage that had an annual interest rate in double digits and was unrelated to their credit score, not to mention the 12% of home equity lost on day one[4]. When questioned about the high interest rate, the sales rep assured Janice, telling her “You can come back in, and we can lower the interest rate once you have paid on it for a certain period of time.” What ultimately won Janice and Isaiah over was the salesperson using Janice’s mention of wanting to send her kids to a religious school against her, with crosses in her office and statements such as “I know that God must have sent you to us. We’re here for you.” However, Janice was fortunate enough to casually mention the loan to an attorney, who looked through the paperwork and found that the lender was charging them all sorts of outrageous fees. After investigating the company’s other loans, the attorney put together a class-action lawsuit with 1,300 plaintiffs, including the Tomlins. The lawsuit led to a settlement of about $10 million in 2002.

The most important part of the underlying moral bankruptcy of the loan was the lack of relevance to their credit score, because lenders can justify excessive loan costs as being essential for poor borrow to balance risk, and the idea of subprime loans to sell to borrowers who have sub-prime credit scores. Despite this key component, subprime loans nearly doubled from 1995-2000 and half of the refinance loans issued in majority black neighborhoods were subprime. This bubble and increase in these subprime mortgages, which were being sold constantly as mortgage-backed securities, changing who the Tomlins and others sent their payments too often, resulted in the 2008 crisis. The loans were first tested on Americans in black neighborhoods because they’re the least respected by the financial sector and least protected by lawmakers. When the lenders got away with it, including the Lehman brothers’ investing firm that had historical ties to the slave trade as human collateral, they rolled it out to America and eventually, the world. Wall Street was soaring for much of this time. However, when the house of cards inevitably came crashing down, and the market froze when only the Wall Street coined loans known as “IBGYBG (I’ll Be Gone, You’ll Be Gone) loans were on the market, prices crashed 15-20% nearly instantly[5]. When creative destruction, capitalism’s kryptonite, struck banks turned to the government to help and received bailouts, some figures estimate as high as $29 trillion[6]. All of this goes to prove that lenders who have no duty to provide you with the best rate because of financial capitalism results in moral decay, human suffering, and government bailouts. I could go on about how President Bush and other politicians such as Clinton were heavily involved in such an extensive bankruptcy of human goodness, but I feel I’ve made the point I was trying to make. Government bailouts teach Wall Street and the rich that they can continue to do whatever they want and hold their hand out when needed, all on the backs of the American working class and the shareholder mindset that has been prevalent since the 1970s.