Topic 1: The financial crisis that was triggered by the U.S. subprime problem in the summer of 2007 has changed the landscape of the U.S. financial system and remade Wall Street. Many financial giants such as Bear Sterns, Lehman Brothers, Merrill Lynch, AIG, Fannie Mae, Freddie Mac, and Citigroup have either disappeared or been rescued through large government bailouts. Goldman Sachs and Morgan Stanley converted to bank holding companies, marking the end of an era for investment banking in the United States. Many people agree that the 2008 economic crisis was the worst economic contraction since the Great Depression that occurred in 1929 and lasted for more than one decade. The Global Recession officially ended in December 2009, but the U.S. economy is still in a fragile situation. The Great Depression in the 1930s brought a fundamental shift in thinking about the market economy and capitalism, and thanks to the government’s massive intervention in the market, the U.S. market economy became more efficient and stronger after the Great Depression. China’s emergence as an economic superpower imposes another threat to the dominance of the U.S. economy. Will the global economic crisis change the principles and ideas of capitalism that have been enshrined for many years? The U.S. government’s partial nationalism of banks and massive intervention in the private sector were unimaginable merely before the occurrence of the global economic crisis. Some people (especially ideological leaders in Europe and Asia) argue that the 2008 economic crisis marks the beginning of the end of the superiority of the U.S. economic model and American-style free market capitalism. They further claim that it is inevitable to establish a new international financial and monetary system that is not dominated by the United States. Discuss critically whether American-style free market capitalism will continue to dominate or concede to a new economic system led by China.
Topic 2: Japan suffered from the “lost two decades” from the early 1990s until 2012 when Abe Shinzo was elected as a new Prime Minister and he began to implement his ambitious economic recovery plan commonly known as “Abenomics” Discuss the causes and consequences of the longest and most severe recession in Japanese history and the future of Abenomics.
Topic 3: The following book written by Anatole Kaletsky explains how the U.S. economy and the world economy fell into the 2008 global economic crisis. Since the book was published in 2010, it has attracted a considerable amount of attention from both professional economists and general readers. In this book, he has suggested that capitalism is “not a static set of institutions but an evolutionary system that reinvents and reinvigorates itself through crisis.” After reading the book, provide a summary evaluation of the views expounded by the author.