125
Economic Crisis
From the 1960s and 1970s, especially after 2008, the US economy experienced
radical changes in content and orientation. If in the past, the economic strength of
the United States was reduced to large manufacturing, commercial, and wholesale
complexes, today this power has been transferred to banks, credit and financial
companies, and information technology. Financial companies are very interested in
outsourcing and wider use of technology (Foroohar 2016:18).
Economists, politicians, and policymakers will continue to be highly interested
in the Middle East if it continues to possess the biggest oil reserves. The Middle
East, where there are huge oil reserves in countries such as Saudi Arabia, United
Arab Emirates, Kuwait, Iraq, and Iran, and oil-producing organizations, such as
OPEC countries, are leading entities in the world oil market. The Arab economy is
being transformed fundamentally owing to oil, which is closely associated with
domestic, local, and international politics, since there are discussions among Arabs
as to who should control the oil and in what ways the oil reserves should be utilized.
Since major oil reserves were discovered in the 1920s and oil-producing fields were
established, the undignified struggle to take advantage of Arab and Persian oil continued for some time in the twentieth century. The oil era is full of disturbing events.
Among these, we can list the European and American exploitation of reserves, the
1973 oil boycott to stabilize oil prices, the Iranian Revolution, and the three wars in
the Gulf, namely the Iran-Iraq war between 1980 and 1988, the Gulf crisis between
1990 and 1991, and the Operation Desert Storm, which was led by America subsequent to the invasion of Kuwait by Iraq, and the invasion of Iraq by the US in 2003
(Fawcett 2016:128).
In spite of some measures taken, in general, the post-2008 financial and banking
system was not subject to new legislation and policies in the United States. Many
banks and credit institutes are expanding their work by borrowing from informal
markets to the extent that in 2016, the investment of these institutions amounted to
80 trillion dollars (Foroohar 2016:20). By turning to the financial and stock market
companies, large companies have created a new culture of quick earnings, and with
the help of hundreds of lobbyists in state and legislative bodies, they have given a
new face to American capitalism. This new trend has highlighted shareholders’ satisfaction in return for investment in labor and production, both in terms of wages
and the traditional American middle-class population. Many large corporations,
such as banks, are now rebuying their shares by borrowing at very low interest rates
and thus increasing their stock prices and keeping their shareholders happy
(Foroohar 2016:4, 24, 37).
According to Joseph Ostglino, banks, mainly, no longer operate in the field of
investment for labor and production, they are more active in arbitrage or in the purchase of financial and commodity bills, and in the short run, benefit from price differentials (Foroohar 2016:125). The restocking of a company by itself will have the
lowest tax, and thus the opportunity to raise capital and satisfy the shareholders will
be provided. Large companies have invested only up to 10% in investment, which
Economic Crisis
Economic Crisis
From the 1960s and 1970s, especially after 2008, the US economy experienced
radical changes in content and orientation. If in the past, the economic strength of
the United States was reduced to large manufacturing, commercial, and wholesale
complexes, today this power has been transferred to banks, credit and financial
companies, and information technology. Financial companies are very interested in
outsourcing and wider use of technology (Foroohar 2016:18).
Economists, politicians, and policymakers will continue to be highly interested
in the Middle East if it continues to possess the biggest oil reserves. The Middle
East, where there are huge oil reserves in countries such as Saudi Arabia, United
Arab Emirates, Kuwait, Iraq, and Iran, and oil-producing organizations, such as
OPEC countries, are leading entities in the world oil market. The Arab economy is
being transformed fundamentally owing to oil, which is closely associated with
domestic, local, and international politics, since there are discussions among Arabs
as to who should control the oil and in what ways the oil reserves should be utilized.
Since major oil reserves were discovered in the 1920s and oil-producing fields were
established, the undignified struggle to take advantage of Arab and Persian oil continued for some time in the twentieth century. The oil era is full of disturbing events.
Among these, we can list the European and American exploitation of reserves, the
1973 oil boycott to stabilize oil prices, the Iranian Revolution, and the three wars in
the Gulf, namely the Iran-Iraq war between 1980 and 1988, the Gulf crisis between
1990 and 1991, and the Operation Desert Storm, which was led by America subsequent to the invasion of Kuwait by Iraq, and the invasion of Iraq by the US in 2003
(Fawcett 2016:128).
In spite of some measures taken, in general, the post-2008 financial and banking
system was not subject to new legislation and policies in the United States. Many
banks and credit institutes are expanding their work by borrowing from informal
markets to the extent that in 2016, the investment of these institutions amounted to
80 trillion dollars (Foroohar 2016:20). By turning to the financial and stock market
companies, large companies have created a new culture of quick earnings, and with
the help of hundreds of lobbyists in state and legislative bodies, they have given a
new face to American capitalism. This new trend has highlighted shareholders’ satisfaction in return for investment in labor and production, both in terms of wages
and the traditional American middle-class population. Many large corporations,
such as banks, are now rebuying their shares by borrowing at very low interest rates
and thus increasing their stock prices and keeping their shareholders happy
(Foroohar 2016:4, 24, 37).
According to Joseph Ostglino, banks, mainly, no longer operate in the field of
investment for labor and production, they are more active in arbitrage or in the purchase of financial and commodity bills, and in the short run, benefit from price differentials (Foroohar 2016:125). The restocking of a company by itself will have the
lowest tax, and thus the opportunity to raise capital and satisfy the shareholders will
be provided. Large companies have invested only up to 10% in investment, which
Economic Crisis