we’ve reached the end of history!

Ahh. Stan, says that history never ends but whatever we’ve reached the part that Me

From the Present is in. So we aren’t going to cover the astonishing

results of the 2016 presidential election. What we are going to do is try to talk about

historical events that are also current events. Future John Green here to tell you that in

a stunning turn of events the 2020 presidential election will be won by - Harry Styles. I

know that he’s English and under 35 but we’re going to change the constitution to

make it possible. Because… that’s how much we love Harry Styles in 2020.

Intro So when we last left George W Bush, his approval

rating was dropping to the lowest number in President of the United States approval rating

history. And the U.S. was facing what turned out to

be the 2nd worst economic crises in the past 150 years. A crisis that remains unnamed because

we’re kind of still in it. But I’d like to propose a couple names:

the Wall Street Wamboozle, the Financial Fartstorm. However, knowing historians they will inevitably

call it like The Major Recession of 2008 - 2012. Booooo!

So what caused the Financial Fartstorm that began in late 2008? Well, it was a mixture

of public and private activities that tilted towards short-term economic thinking, speculation

and irresponsible spending. First, there are the Federal Reserve’s policies

of keeping interest rates freakishly low in response to the 2001-2002 recession. Now,

this worked, but the recession ended and interest rates stayed low.

And this, combined with unscrupulous mortgage lenders, encouraged people to buy houses that

they could not afford. In the early 2000s, many millions of Americans,

including certain Crash Course US History hosts, bought real estate assuming that its

value would increase rapidly and forever, so that when you were unable to make payments,

you’d just sell it, pay off the mortgage, and make a tidy profit.

It turns out this was essentially a pyramid scheme and, my friends, I was not at the top

of the pyramid. So back then you could buy a house with a

so-called NINJA loan which sadly this did not involve mutant ninja turtles or pizza.

Ninja stands for No Income, No Job, and No Assets.

Traditionally, people in this situation can’t borrow hundreds of thousands of dollars, but

in the early 2000’s, these loans were giving the benign sounding designation “subprime.”

So it’s important to understand that it wasn’t just like big Wall Street banks financing

huge deals with debt, regular people were doing it - like me.

All this created a classic housing bubble, which was doomed to burst. Also, with the

interest on government Treasury Bills effectively zero, investors had to look elsewhere for

better returns, which led to the idea of issuing securities – these bond-like instruments

that were backed by mortgages. The thinking was that the interest people

paid on their mortgages would supply the underlying value of the security, the way that like tax

revenues are the source of value of a government bond.

Now of course there’d be a minority of people who’d fail to pay off their securitised

mortgages, but most people would pay because, you know, they’d want to keep their houses.

But it turns out that if you haven’t paid any money to own your house, you don’t feel

all that invested in it. Now there are even more reasons why these

securities were terrible ideas, but the important thing is that when the mortgages turned bad,

these securities became toxic assets. Basically, the people who held them suddenly

didn’t know what they were worth if anything and banks overreacted to this uncertainty

as banks like to do by not lending out any money.

And that’s called a credit freeze, which is very bad. So that’s how a housing bubble

turned into a full-fledged financial crisis. Alright Let’s go to the ThoughtBubble.

When banks stop lending, business can’t function. So the stock market collapsed, with

the Dow Jones Industrial Average dropping from above 14,000 to around 8,000 which wiped

out about $7trillion of shareholder wealth. And a majority of Americans had money invested

in the stock market, much of it in the form of retirement funds.

With it being harder to borrow money, Americans finally cut back on their spending, which

resulted in many businesses failing and by the end of 2008, 2.5 million jobs had been

lost, many of which were in manufacturing and construction.

And because those were both male-dominated fields, it led to another change, by mid-2009

more women than men held paying jobs for the first time in American history.

In the last three months of 2008 and the first three months of 2009 our GDP dropped 6%. And

World Trade cratered and that led to unemployment and misery worldwide.

The event that triggered the chaos was the failure of the investment bank Lehman Brothers

in September, just 2 months before the presidential election. The Bush Administration tried to

stop the damage by getting Congress to pass the Troubled Assets Relief Program, or TARP,

which was basically a $700 billion bailout for banks like Citigroup and Bank of America,

insurance companies like AIG and mortgage insurers Fannie Mae and Freddie Mac.

Regular individuals also received tarps, but they had to buy them and they weren’t as

cool. Anyway, these bailouts were probably necessary

to stop a complete failure of the financial system but they were very unpopular. Most

of the banks that received a rescue from the taxpayers didn’t help the homeowners facing

foreclosure, and despite receiving millions of federal dollars, AIG continued to pay huge

bonuses to its top executives. Thanks, Thoughtbubble. So, the end of the Bush years looked a lot

like the end of the Hoover years. After a decade of Americans spending more than they

had, government taking a back seat to business interests and deregulation of industries going

hand in hand with increasing corruption, Barack Obama was faced with America’s biggest economic

challenge since the Great Depression. Oh, by the way, we got a new president, Barack

Obama, who 50 years before his election couldn’t have sat in the front of a bus in Alabama.

So I know all the green parts of not-America are mad at us for causing the great financial

meltdown and whatever, and fair enough, but we do make some progress now and again

Barack Obama was young, he was relatively new on the national scene, and represented

change. He appealed to young people and minorities, and he harnessed the power of social media

to communicate with supporters, and get out the vote, and also raise TONS of money.

Also, he was on the cover of US Weekly. You didn’t see Martin Van Buren on the cover

of US Weekly. What’s that? It didn’t exist? Of course it existed!

In 2008 Obama’s election At the time Obama’s election seemed a political watershed and

not just because he was the first African American president. He appeared to break Republicans’

solid hold on the south, he won Virginia, and North Carolina and Florida, and his supporters

represented a coalition of African Americans, and Hispanics, white liberals and, especially,

young people. Oh, it’s time for the mystery document?

I hope it’s from that US Weekly profile. The rules here are simple - he said for the

final time. I’ll tell you one thing that’s going to

change here at Crash Course, no more shock pens. I guess the author of the Mystery Document,

if I’m wrong I get shocked. Alright, let’s see what we got here today.

“For everywhere we look, there is work to be done. The state of our economy calls for

action, bold and swift. And we will act, not only to create new jobs, but to lay a new

foundation for growth. We will build the roads and bridges, the electric grids and digital

lines that feed our commerce and bind us together. We’ll restore science to its rightful place,

and wield technology’s wonders to raise health care’s quality and lower its cost.

We will harness the sun and the winds and the soil to fuel our cars and run our factories.

And we will transform our schools and colleges and universities to meet the demands of a

new age. All this we can do. All this we will do.”

Speaking of things that we will do, I will get this right it’s Barack Obama’s first

inaugural! Ba-bam! No more shocks. The getting shocked part of

my life has come to an end. Hopefully in Crash Course Literature when

I get things right I’ll get a puppy and when I get things wrong I’ll get a rainbow!

Stan says that my only reward is not being punished.

So Obama promised to change the culture of Washington. He would end partisan squabbling….

sorry I couldn’t even get through that sentence. To be fair, he did end the squabbling, it

became full blown yelling. He also wanted a foreign policy based on diplomacy,

he wanted to reduce inequality and increase access to health care, he wanted to curb “greed

and irresponsibility” that had helped bring on the economic crisis, and he wanted to end

the Bush tax cuts. He also wanted to end the wars in Iraq and Afghanistan and, as critics

mocked, reverse global warming. That’s a tall order

So how has he done? Not bad. Well, some would say not great either.

For instance he launched diplomatic outreach to the Muslim world, but a lot of this was

more rhetoric than action, as in his verbal support for the revolution that overthrew

Hosni Mubarak in Egypt. And he did keep some of his campaign promises,

for instance he signed into law the Lily Ledbetter Fair Pay Act, which made it easier for women

to sue when they had been systemically underpaid and he also reversed an earlier executive

order that limited women’s reproductive rights.

And speaking of women he appointed two of them to the Supreme Court, Elena Kagan and

Sonia Sotomayor, the court’s first Hispanic melmber.

He also followed through on his promise to end the war in Iraq, although to be fair the

Bush administration had really set him up for success there. And he increased the number

of U.S. troops in Afghanistan as part of a longer term plan to end the war there, which

has sort of worked? He also authorized a successful military operation

that killed Osama bin Laden on May 2, 2011. I was in Amsterdam at the time, and the Dutch

media came to my house to ask me how Americans felt about this and I said, “Good!”

On the other hand Obama has been criticized internationally for backing off his promise

to close the Guantanamo Bay detention camp, and he has largely followed the Bush administration's

policies with the war on terror. But the Obama administration has deployed

far more unmanned drones to kill suspected militants around the world.

Despite provoking outrage on the left and the right, Americans generally appear to support

the use of drones and extra-legal assassination of accused terrorists. Obama also kept in

place Bush’s executive power and in fact expanded it in some ways with NSA’s PRISM

program. What about that financial mess he inherited?

Well, Obama was fortunate to have a Democratic Congress for his first term in office, so

he could push through a lot of legislation. This included a sweeping stimulus package

with nearly $800 Billion in new spending, most of it on infrastructure, that was signed

into law on February 17, 2009, just 28 days into Obama’s presidency.

In the end, the recovery act cost $787 billion - more than the government had spent on a

package of programs ever. More than the Great Society. More than the New Deal.

Did it work,? Well it depends on who you ask. Among 9 large studies, 6 found that the stimulus

did have a positive effect on growth and employment, 3 found that it had little or no effect, and

economists are equally divided. The stimulus is estimated to have saved about

3 million jobs, but it also increased the deficit quite a bit.

So Liberal economists see America’s current 7% unemployment rate as evidence that the

stimulus’ Keynesian policies should have gone further, while conservatives say that

the stimulus exploded the federal deficit and debt.

Regardless, the recovery for the past few years has been steady, but quite slow.

Lastly, let’s turn to Obama’s signature policy proposal the Affordable Care Act, better

known as Obamacare. The Affordable Care Act is arguably the most

significant piece of social legislation since Medicare. And it seeks to move the United

States into the ranks of countries with universal health care.

A list that includes every industrialized nation on Earth. We’re number one among

countries that don’t have universal health care.

So Obamacare aims to reduce the number of Americans without health insurance by making

it easier and less expensive for the uninsured to buy it privately. It’s not a government

insurance plan and the government will subsidize those who can’t afford insurance.

That’s going to be expensive, but fortunately our health care system is so astonishly inefficient

that there are lots of places to save money and the Congressional Budget Office at least

thinks it’s going to be a wash. But controversially, the acts insurance mandate

means that if you don’t have insurance from your employer you MUST buy it or else you

have to pay a penalty. In 2012 the core of the law was upheld by

the Supreme Court when they ruled that thiants was a constitutional use of the government’s

taxing power. As for Obama’s success at ending partisan

politics, not one Congressional Republican voted for Obamacare, and many used it to campaign

against Democrats in the 2010 mid-term elections. And while the success of the Affordable Care

Act won’t be able to be determined for many years there was a huge backlash against both

Obama and his policies, on Facebook, and Twitter, and also the mysterious world of non-the-Internet

One of these responses was The Tea Party, a reference to the Boston Tea Party and an

acronym for Taxed Enough Already. For the record, I just want to say that the

vast majority of American’s taxes are lower now than they have been at any point in the

last one hundred years. But the Tea Party is also very concerned that

deficits are out of control and that rising government spending is going to ruin America.

Bolstered by 80 or so new Tea Party congresspeople, the Republicans took control of the House

in 2010 and John, it’s pronounced, Boehner became the Speaker of The House.

All these Tea Party freshmen took their mandate to cut taxes and reduce spending very seriously,

and that made it difficult for Boehner to compromise with the Obama administration.