Report relating to the recent financial crisis Essay

Report relating to the recent financial crisis - Essay Example A major strength in the author’s exposition is the manner in which he offers deductive analyses of situations, which makes it possible for the reader to connect the links between institutional practices and the resultant adverse effects on the American economy. In a significant sense, the author illustrates the manner in which the banking industry in America has used its immense financial resources to bankroll policies through calculated manipulation of Congress. The act of manipulation occurs through highly paid Ivy League economists and financial analysts who are paid large sums of money to give convincing but untruthful information about the matters of financial management and economic policies. As a result, it becomes appropriate to consider the fact that most of the issues raised by the author take a wide angle that connects the practices and policies of various institutions within a network that affirms the primacy of short-term financial gains over long-term policies by the corporate actors (Ferguson 44). The author makes the point that the various economic challenges facing America are derivative of the policies and practices adopted by Wall Street over the past decades. Fergusson enriches his arguments by roping in the changes in the legal framework, which have enabled private players in the economy to advance their private interests at the expense of economic growth. For instance, he cites the removal of the 1933 Glass-Steagall Act, had established and maintained some element of distinction between investment banks and commercial banks (Ferguson 51). The consequence of such actions were seen in a wide range of unethical and unprofessional business practices that included credit default swaps and other measures that had the long term effect of ruining many sectors of America’s economy. The book points out some of the major loopholes that have enabled the unethical practices to persist in the American economic environment are largely deter mined by various economic indicators that connect with the multiple issues on which the economic processes are based. In this regard, the book opens up a deep analysis of the unstable nature of the American economic systems in terms of their impact on the dependent economies. Bad corporate governance practices that thrive within the American economic system are explained in terms of non-existent of laws that would be relied upon to reign in the corporate culprits. On this particular matter, the author makes the case for the review of the current policies in the American economic sector for the purposes of instilling value and good corporate practices. Such practices, as the author argues, would shield the American economy from adverse effects such as those that were witnessed during the 2008 economic crisis. The crisis, according to Ferguson, was a culmination of years of corruption and institutionalized greed that have destabilized the American economic system and threatened the co untry’s economic power image in the world. The book offers projections about the possibilities of recurrent crises in the event that the United States does not review its policies by developing financial and economic safeguards to check against runaway corporate greed. An important aspect

Competition, Monopoly, and Oligopoly & Monopolistic Competitive Market Term Paper

Competition, Monopoly, and Oligopoly & Monopolistic Competitive Market Structure - Term Paper Example The research explained briefly on the perfect competitive market structure and revealed some features of this market structure. It described the way firms maximize profits with the help of diagrams, the researcher revealed the way they maximize profit at the equilibrium point in both short and long run. Lastly, the conclusion summed up the discussion, and the researcher provided some significant areas for further research study. The market is structured depending on varied factors and variation that determine the market structure of a particular firm in an economy. Competition is one of the factors or conditions that determines the structure of a firm. The economists assume that there are many buyers and sellers in the marketplace; hence, they compete favorably for the available products in the market. Therefore, competition in the market contributes to changes of prices for commodities; thus creating a shift in demand and supply curve. Furthermore, there are substitute products in t he marketplace; thus, when one product increases the prices, consumers chose the alternative of consuming substitute products. The buyers and sellers have the ability to influence prices for commodities, and this contributes to increased competition in the market. ... The buyers and sellers may exchange property rights and everyone in the market interacts voluntarily in order to achieve self-interest. The buyers and sellers interact; thus, they signal much information about the product through product prices. Successful sellers reduce prices in order to influence buyers and out-compete their competitor (Mankiw 2011, 36). The sellers can maximize profits in case the price exceeds the products costs. Monopoly A monopoly refers to a market structure whereby only a single producer or buyer for a commodity exists. The monopoly firms are the price makers because they are single sellers in the market. Monopoly is a single business firm and it is characterized by varied features including market restrictions because of high costs and production of homogenous products. The government has powers to control or restrict entries into the market by creating barriers. The barrier to market entry may result because the firm may have exclusive rights of accessing the natural resources. For instance, the Kenya Power and Lighting Company is a monopolistic firm because the government takes control over the resources. The same case applies to Saudi Arabia oil industry because the Saudi government is the sole control of the natural oil reserves. The market also have a patent right that impede other competitors from entering into the market. The monopoly firm is classified into numerous features including perfect monopoly whereby the single seller does not have substitute products. Therefore, there is no perfect competition, but such firms are extremely rare. Another one is imperfect monopoly whereby the single seller does not have close substitute products meaning that the