In March 2009, the U.S. economy was in a severe recession since the Great Depression after the subprime mortgage crisis was spiraling out of control. The situation had changed dramatically in a year, since the Federal Reserve Board had helped to bailout investment bank Bear Stearns. Deflation, not inflation, a major concern was. The interest rates were near zero percent. Lost five million jobs. The new Barack Obama administration had pushed forward with a $ 787 billion stimulus … Read more »

In March 2009, the U.S. economy was in a severe recession since the Great Depression after the subprime mortgage crisis was spiraling out of control. The situation had changed dramatically in a year, since the Federal Reserve Board had helped to bailout investment bank Bear Stearns. Deflation, not inflation, a major concern was. The interest rates were near zero percent. Lost five million jobs. The new Barack Obama administration had pushed forward with a $ 787 billion stimulus package, coupled with various programs to address frozen credit markets and markets depressed investor confidence. But the burning question in every politician’s mind was – how effective the various plans would work to revive the U.S. economy
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from
Laura Alfaro,
Renee Kim
Source: Harvard Business School
20 pages.
Release Date: 7 April 2009. Prod #: 709 045 PDF-ENG
U.S. mortgage crisis: Political reactions (B) HBR case solution