VII.Understanding the Recession: Stock Markets, Subprime Lending, and Bursting Bubbles

In all, there have been over thirty cycles of expansions and recessions of the U.S. economy just since 1854. When markets are surging, “bubbles” form out of wild speculation and overvaluation that are based largely upon euphoria and greed. Electronic “herds” of investors are populated with optimistic, or “bull” buyers. In 2000, the dot.com economic boom came to an end as interest rates rose and investments in technology slowed. When an economic bubble bursts, the herd became fearful. A pessimistic “bear” market is a seller’s stock market in decline. Some of these economic forces were the same key factors that caused the “subprime” mortgage bubble that burst in late 2007. However, it was dubious and unregulated lending practices (with encouragement from the U.S. government) that caused this shutter in the economy—with aftershocks felt around the world.

Americans have tried to be cautiously optimistic, embracing the message of “Hope” in the presidential campaign of Barack Obama. Like many presidents who took over in the midst of recession, President Obama faced the task of virtually “remaking America”. Direct effects of smaller government and deregulation under previous administrations, but most recently with the energy and environmental policies of President Bush, were seen in the Gulf of Mexico when as much as 180 million gallons of oil gushed from a self-regulated rig’s blown out wellhead. The question, then, seems virtually the same as that which faced a younger America: how big should the government be? The answer is overwhelmed by the sheer number of complexities that complicate the task facing President and Americans today—the task of remaking another new American economy.

Vocabulary list

1. economic superpower – экономическая сверхдержава

2. to assume a role – взятьнасебяроль
syn. to take a role

3. recession – спад экономической активности

4. agriculturaleconomy– экономика, ориентированная на сельское хозяйство
n. agriculture

5. toexpand – расширяться, увеличиваться, расти
n. expansion

6. income - доход

7. sovereign nation – суверенная нация

8. internal – внутренний
ant. external

9. tolayoutregulation – устанавливать законы, правила

10. free flow of… - свободное движение

11. tax – налог

12. core – ядро, центр, суть

13. entrepreneurship – предпринимательство
n. entrepreneur

14. manufacturing – производство, изготовление
n. manufacturer
v. to manufacture

15. commerce – торговля
adj. commercial

16. to back a strong currency – поддерживать «сильную» валюту
hard currency – твердая, конвертируемаявалюта
soft currency – неконвертируемаявалюта

17. industrial infrastructure – промышленная инфраструктура

18. mass production – массовое производство

19. advancements in technology – достижениявтехнологиях

20. to launch a program – вводить, претворятьвжизньпрограмму
syn. to introduce
to put into effect

21. military-industrial complex – военно-промышленныйкомплекс

22. labor (labour) union – профсоюз

23. domestic spending – внутренние затраты, расходы

24. expenditures – расходы (государства)

25. consumer confidence – доверие потребителей

26. global marketplace – мировой рынок

27. dot.comindustries – компании, осуществляющие свою деятельность с использованием интернет-технологий

28. unemployment – безработица
ant. employment
v. to employ
n. employer/employee

Notes

1. transfer of power – переход власти

2. self-sufficient – самодостаточный

3. toboost – резко увеличивать(ся)

4. standard of living – уровень жизни

5. the national debt – государственный долг

6. Gold Standard – золотой стандарт

7. theFederalReserve – Федеральная Резервная Система, государственное финансовое учреждение США

8. the Great Depression – Великая Депрессия

9. the stock market crash – крахфондовогорынка

10. to cripple confidence – наноситьурондоверию

11. GNP (grossnationalproduct) – ВНП (валовый национальный продукт)

12. baby boom – резкий подъем рождаемости

13. middle class – средний класс

14. access to opportunity – зд. возможности

15. budget deficit – дефицит бюджета

16. toborrowheavily – занимать денежные средства в больших количествах

17. herds of investors – зд. толпыинвесторов

18. bullmarket – рынок быков (при повышении цен)
bearmarket – рынок медведей (при понижении цен)

19. economic bubble – «экономический пузырь»

20. dubious and unregulated lending practices – ненадежные и нерегулируемые заимствования

Ex 1. Suggest the Russian equivalents:

a transfer of power seems to be in progress; the American Dream still exists; dynamic economic expansion; abundant food and land; a strong institutional core; the driving economic force; the Gold Rush; to resort to paper currency; to be driven by innovation and invention; to outpace; to assume a dominant role; the economic effects were disastrous; government-sponsored work projects; to become increasingly urban; to guarantee access to opportunity by minorities; to keep the economy afloat; to make starting gains; electronic “herds” of investors; with aftershocks felt around the world; the energy and environmental policies.