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President of Tanzania hon Jakaya Kikwete

President was greeting the official during the 47th commemorations of the United republic of Tanzania that was held in Tanzania Islands of Zanzibar .Picture by rahma Hashim-Mgonjahmedias.

The beautful buildings of the central bank of the united republic of tanzania

These two twin buildings are of the ministry of finance in Tanzania.

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President of Tanzania Hon.Jakaya Kikwete

The 47th commemorations of the United republic of Tanzania. Picture by Jacquelin Jackson - MgonjahMedias.

President of the united republic of Tanzania Hon.JK together with the military commanders

This was the 47th commemorations of the united republic of Tanzania and the President was inspecting the Guards prepared by the Tanzania Peoples Defence force(TPDF),It was held in Tanzania Islands.Picture by Mponela Mathei -MgonjahMedias.

Saturday, February 5, 2011

The records of major disasters happened in the world history

Aviation

January 23, Poland. A Spanish-built CASA transport plane carrying members of the Polish air force home from a conference on flight safety in Warsaw crashes near the town of Miroslawiec; all 20 aboard are killed.

February 21, Venezuela. A Santa Barbara Airlines ATR 42-300 turboprop crashes into a mountainside in Sierra La Culata National Park shortly after takeoff from Mérida; all 46 aboard are killed.

April 3, Suriname. A Blue Wings Airlines Antonov An-28 airliner crashes on its approach to the airport in Benzdorp; all 19 aboard lose their lives.

April 15, Democratic Republic of the Congo. An airliner taking off from the airport in Goma crashes into a busy market neighbourhood and bursts into flames; more than 40 people, most of them on the ground, are killed.

April 28, Black Sea. A Ukrainian Mi-8 helicopter plummets into the Black Sea after its tail hits an offshore drilling platform; 19 of the 20 aboard die in the crash.

May 2, The Sudan. A Beechcraft 1900 airplane crashes near Rumbek, killing at least 23 people, including the southern Sudan's minister of defense, Dominic Dim.

May 29, Panama. A helicopter carrying Chilean police officials from Colón to Panama City, where they had been attending a meeting of Latin American antiterrorism leaders, crashes on top of a building; at least 15 people, including the head of Chile's national police force and at least 4 people on the ground, are killed.

June 10, Khartoum, The Sudan. A Sudanese airliner bursts into flames after landing; at least 30 of the 214 people aboard are incinerated.

August 20, Spain. An MD-82 airliner operated by the low-cost carrier Spanair and bound for the Canary Islands goes off the end of the runway at Madrid Barajas International Airport on takeoff and bursts into flames; at least 154 of those aboard perish.

August 24, Kyrgyzstan. A passenger jet bound for Iran crashes shortly after takeoff from Manas International Airport in Bishkek, killing at least 64 passengers; 22 survive.

September 1, Democratic Republic of the Congo. A small plane crashes into a mountainside during a thunderstorm; all 17 aboard, most of them aid workers, are feared dead.

September 14, Russia. While traveling from Moscow to Perm, a Boeing 737 passenger jet operated by an Aeroflot subsidiary crashes when preparing to land; all 88 aboard die.

October 8, Nepal. A Yeti Airlines Twin Otter airplane attempting to land at tiny Lukla Airport in the Himalayan Mountains catches its wheels on a security fence and crashes; 18 of the 19 people aboard, including 12 Germans and 2 Australians, are killed.



Fires and Explosions

January 7, Inch'on, S.Kor. Fire breaks out at a newly built cold storage facility; some 40 people are believed to have lost their lives.

January 31, Istanbul. An explosion, likely caused by fireworks ignited by an earlier fire, destroys a building; at least 22 people die in the blast.

March 15, Near Tirana, Alb. A series of strong explosions at a munitions depot kills 26 people and injures more than 300.

March 26, Xinjiang province, China. As authorities attempt to destroy illegal fireworks outside the city of Turpan, an unplanned explosion occurs; 22 people are reported killed.

April 7, Uganda. A fire in a dormitory for a girls' elementary school outside Kampala kills 19 schoolgirls and 2 adults; the cause is unclear, and reports indicate that the doors may have been locked from the outside.

April 26, Casablanca, Mor. A four-story mattress factory goes up in flames; at least 55 people succumb.

May 15, Nigeria. A fuel pipeline in a village near Lagos is ruptured by road construction equipment, causing much of the area to be engulfed in flames; some 100 people are killed.

August 1, Balcilar, Tur. A gas explosion causes the collapse of a three-story girls' dormitory; at least 17 students are crushed to death.

August 26, Guangxi autonomous region, China. A series of explosions in the Guangxi Guangwei Chemical Co. factory that last for seven hours leave at least 20 workers dead in Yizhou.

August 28, Limani, Cameroon. After an oil tanker overturns, residents rush to salvage the leaking gasoline, but a spark from a passing bus causes an explosion and fire; dozens of people, including passengers on the bus, are incinerated.

September 20, Guangdong province, China. In Shenzhen ignited fireworks cause a fire in a nightclub that leaves at least 43 people dead.

October 23, Rajasthan state, India. A powerful explosion demolishes an illegal fireworks factory in the village of Deeg; at least 26 people lose their lives.

December 24, Yevpatoria, Ukraine. An explosion destroys an apartment building, and at least 19 people are killed; it is thought that oxygen tanks stored in the basement may have been the cause.



Marine

February 21, Near Itacoatiara, Braz. The Almirante Monteiro, a ferry, collides with a barge in the Amazon River and sinks to the bottom; some 20 people are feared lost.

February 28, Near Dhaka, Bangladesh. A ferry collides with another vessel in the Buriganga River; at least 39 passengers are killed.

March 3, Bay of Bengal. A wooden trawler carrying would-be migrants to Malaysia from Bangladesh and Myanmar (Burma) is found drifting by the Sri Lankan navy; 20 of the more than 90 passengers have died of starvation and dehydration.

March 6, Albania. A boat that is used to carry customers to and from a restaurant on Lake Farka near Tirana sinks; 16 people, most of whom had attended a birthday party at the restaurant, are drowned.

March 22, Off Hong Kong's Lantao Island. A Ukrainian tugboat collides with a Chinese freighter and sinks; 18 crew members are feared lost.

April 1, Nigeria. In Kano state, a dugout canoe carrying a wedding party capsizes; at least 40 people, including the bride, drown.

April 20, Off the Bahamas. Rescue workers find the bodies of 20 drowned Haitians in the sea as well as three survivors; the vessel that had been carrying them is not found.

May 4, Brazil. The wooden ferry Comandante Sales, carrying a group of some 80 partygoers, capsizes and sinks in the Solimões River; at least 41 people drown.

May 12, Bangladesh. A ferry on the Ghorautra River goes down quickly in bad weather; at least 44 people die.

May 19, Democratic Republic of the Congo. An overloaded passenger boat sinks in a storm on Lake Tanganyika; dozens of people are lost.

June 7, Libya. A boat carrying would-be migrants to Italy capsizes shortly after departing from Zuwarah; at least 40 people are drowned, with a further 100 missing.

June 21, Philippines. The MV Princess of Stars, a large ferry, capsizes and sinks in a typhoon off the island of Sibuyan; some 800 people perish. July 22, Democratic Republic of the Congo. A motorboat carrying passengers from Mobayi Bongo to the Central African Republic sinks in the Ubangi River; at least 47 people drown, with a further 100 missing.

August 27, South of Malta. An overloaded boat that left Zuwarah, Libya, carrying would-be migrants from The Sudan and Eritrea takes on water and sinks; 71 people are feared lost.

August 29, Bihar state, India. An Indian army boat rescuing victims of the flooding disaster that caused the Kosi River to change course capsizes; some 20 flood victims and soldiers drown.

November 3, Yemen. The international group Doctors Without Borders reports that 60 bodies have washed up onto the shores over the past two days; the dead had put out from Boosaaso, Som., in boats, and some had been forced overboard by smugglers, while one boat capsized.

November 4, Philippines. An inter-island ferry bound for Sorsogon goes down in bad weather; at least 40 people perish.

November 8, Sea of Japan. A Russian nuclear submarine undergoing testing suffers an accident with its fire-extinguishing system that fills two compartments with Freon gas, asphyxiating at least 20 workers.

December 14, Philippines. An overloaded ferry just entering the mouth of the Cagayan River capsizes; at least 23 passengers drown, with 33 others missing.



Mining and Construction

January 11, Kazakhstan. An ArcelorMittal-owned coal mine suffers a gas explosion; at least 30 miners are killed.

January 16, Morocco. An apartment building under construction in Kenitra collapses, killing at least 16 workers.

January 21, Shanxi province, China. As miners attempt to reopen a shaft in a closed mine, an explosion takes place that kills at least 20 people.

August 9, Boussoukoula, Burkina Faso. At an illegal gold mine, rain causes a mine collapse and mud slide in which at least 34 workers are buried, with dozens more reported missing.

September 20, Hegang, Heilongjiang province, China. A coal mine fire leaves 19 miners dead and 12 missing.

September 21, Henan province, China. A gas explosion in a coal mine kills at least 37 miners; 9 are missing.

November 7, Pétionville, Haiti. A third floor is being added to a church-run school when the building collapses, crushing to death at least 91 schoolchildren and teachers.

November 15, Hangzhou, Zhejiang province, China. A section of a subway tunnel that is being constructed collapses; at least 21 people are killed.

December 27, Hunan province, China. A construction crane collapses in downtown Changsha, killing at least 17 workers.



Natural

January 9, Iran. Authorities in Iran say that a disastrous blizzard in the Tehran area has resulted in the deaths of at least 28 people; Tehran declares a two-day national holiday so that people will stay home.

January 17, Afghanistan. Officials report that an unusually hard winter has left at least 200 people dead; huge numbers of livestock have also perished.

January 28, China. The government issues a severe weather warning for eastern and central China, areas that have already received record-setting amounts of snow, causing a transportation crisis and leaving at least 24 people dead.

February 3, Africa. A series of earthquakes takes place in the Great Lakes region, killing some 40 people (34 in Rwanda and 6 in the Democratic Republic of the Congo) and injuring more than 400.

February 5, U.S. A fierce outbreak of tornadoes leaves a path of destruction in several southern states, particularly in Tennessee, where at least 30 people are killed, and Arkansas, which suffers a death toll of at least 13; a further 7 people are reported killed in Kentucky and 4 in Alabama.

February 8, Indian-administered Kashmir. Heavy snowfall in the region triggers avalanches that result in the deaths of at least 20 people.

February 10, China. Officials say that power and transportation are beginning to be restored in some areas where the worst winter storms in 50 years have led to at least 60 deaths.

February 12, Northern Bolivia. Pres. Evo Morales declares a national disaster because of flooding following heavy rains that has left at least 60 people dead.

February 16, Afghanistan. Authorities say the harshest winter in 30 years has left 926 people dead so far, 462 of them in Herat province, and hundreds of thousands of cattle have also succumbed.

February 17, Madagascar. A particularly ferocious storm, Cyclone Ivan, makes landfall on the east coast, all but destroying the village of Ambodihazinina, leaving more than 80 people dead, and devastating the ripening rice crops.

February 21, Eastern Philippines. After two weeks of torrential rains, at least 20 people have died in flooding and landslides, tens of thousands of people have been displaced, and great damage has been caused to infrastructure and to rice fields.

April 7, Democratic Republic of the Congo. Humanitarian officials report to the UN that torrential rains in the Kasaï-Occidental and Bandundu provinces have left at least 15 people dead and hundreds homeless.

May 2–3, Myanmar (Burma). Cyclone Nargis, an extraordinarily strong tropical cyclone that formed in the Bay of Bengal and quickly strengthened to a category 4 storm, makes landfall in Myanmar (Burma) and throughout the night churns up the densely populated rice-growing region of the Irrawaddy River delta, cutting a wide path of destruction augmented by a 4-m (12-ft) storm surge that obliterates coastal villages; some 138,000 people perish.

May 10, United States. A violent storm system spawns tornadoes that lay waste to portions of Oklahoma, Missouri, and Georgia, leaving more than 23 people dead, at least 15 of them in Missouri and most of those near Racine.

May 12, Sichuan province, China. A magnitude-7.9 earthquake devastates the area; at the epicentre, in Wenchuan, some 80% of the structures are flattened. At least 69,000 people lose their lives, 18,000 more are missing, and hundreds of thousands are made homeless.

May 14, Uttar Pradesh state, India. A violent storm leaves at least 128 people dead and all but destroys the important mango crop.

June 17, Southern China. The death toll from flooding caused by incessant heavy rains rises to 171; more than a million people have been evacuated.

June 20, India. Authorities say that the death toll from flooding resulting from heavy rain in eastern and northeastern areas of the country has risen past 50; thousands of villages are reportedly submerged.

June 21, Philippines. Typhoon Fengshen smashes into the Philippines; at least 498 residents perish.

July 27, Ukraine and Romania. Officials report that five days of heavy storms have left a total of 13 people dead in Ukraine and 5 others dead in Romania; some 8,000 people in the region have been evacuated.

August 10, Southern India. Officials report that monsoon rains caused the deaths of at least 59 people, not including the 40 people who are swept away when a truck in which they are riding fails to negotiate a flooded bridge in Andhra Pradesh state.

August 18, Southeast Asia. It is reported that over the past week, record flooding has caused devastation throughout much of the region, with thousands of residents forced from their homes and at least 160 people dead in Vietnam alone.

August 18, Bihar state, India. As a result of heavy rains that cause the breach of a dam in Nepal, the Kosi River breaks its embankments and changes course to flow in an old channel some 120 km (75 mi) east, inundating villages in Nepal and Bangladesh as well as in India; a minimum of two million people are left homeless and at least 90 dead.

August 26, Hispaniola. Hurricane Gustav makes landfall in Haiti and the Dominican Republic; at least 84 people are killed, and thousands of homes are ruined.

August 30, Sichuan province, China. A magnitude-5.7 earthquake with its epicentre some 35 km (22 mi) southeast of Panzhihua causes houses to collapse in several villages and leads to the deaths of at least 28 people.

September 6, Egypt. The Muqattam cliffs outside Cairo begin to collapse, loosing hundreds of pounds of rocks and boulders that crush a shantytown in the shadow of the cliffs; dozens of people are killed.

September 6, Haiti. After a week of flooding caused by Tropical Storm Hanna, at least 529 people have perished, most of them in Gonaïves.

September 8, Haiti. Hurricane Ike sweeps through Haiti, leaving at least 58 people dead.

September 13, Texas. Hurricane Ike spreads heavy flooding throughout Galveston and Orange and causes extensive damage in Houston; some 51 people in the region succumb, 20 of them in Texas.

September 22, India. The death toll from three days of heavy monsoon rains is reported to have reached 119.

September 28, Vietnam. Authorities report that Typhoon Hagupit has caused flooding that has left at least 41 people dead; the storm had earlier killed some 8 people in the Philippines and 17 people in China.

October 2, Algeria. Torrential rains cause a flash flood in a normally dry river in the Sahara; the town of Ghardaia is inundated, with some 600 homes destroyed and at least 33 people killed.

October 3, Haiti. The civil protection agency reports that the total death toll in the country from Hurricanes Gustav and Ike and Tropical Storms Hanna and Fay in August and September is 793.

October 5, Kyrgyzstan. A magnitude-6.6 earthquake strikes, killing at least 72 people and flattening the village of Nura.

October 25, Yemen. After two days of heavy rain from a tropical storm, massive flooding along the Wadi Hadramawt leaves at least 180 people dead and some 20,000 people displaced.

October 29, Balochistan province, Pakistan. A shallow magnitude-6.4 earthquake strikes, killing at least 215 people and leaving some 15,000 homeless at the beginning of winter.

November 7, Vietnam. Authorities report that unseasonal flooding in recent weeks has left at least 82 people dead and led to an outbreak of dengue fever.

November 24, Southern Brazil. Officials report that flooding and landslides have left at least 59 people dead and displaced some 43,000 others; by December 1 the death toll has risen to a minimum of 116.



Railroad

April 28, Shandong province, China. Outside the city of Zibo, a high-speed passenger train traveling from Beijing to Qingdao derails and hits another passenger train en route from Yantai to Xuzhou; at least 70 people are killed.

July 16, Northern Egypt. A truck rear-ends a car waiting at a railroad crossing, pushing three vehicles onto the tracks, where they are crushed by a train; at least 40 people are killed.

August 1, Andhra Pradesh state, India. Five of the 13 cars of the Secunderabad-Kakinada Gautami Express train become engulfed in flames; at least 30 passengers expire.

September 12, Los Angeles. A commuter train crashes head-on into a freight train, killing at least 25 people, when the engineer fails to stop at a red signal; it is thought that he may have been distracted by text messaging on his cell phone.



Traffic

January 12, Port Harcourt, Nigeria. A fuel tanker truck blows a tire and overturns; the fuel spills and ignites, incinerating at least 30 people.

January 20, India. Near the town of Nashik, an overloaded bus carrying pilgrims from a visit to Hindu shrines fails to negotiate a hairpin turn and plunges over a mountainside; at least 37 of the passengers are killed.

January 26, Near Jerash, Jordan. A passenger bus traveling from Irbid to Al-Ê¿Aqabah collides with a water truck, and both vehicles fall off the road into the valley below; at least 20 people are killed.

January 29, China. In Guizhou province, which is among those suffering prolonged severe winter storms, a bus goes off an ice-coated road; at least 25 passengers perish.

February 7, Egypt. Some 100 km (60 mi) south of Cairo, a bus collides with a minibus in heavy fog, and some six more vehicles crash into them; at least 29 people are killed in the pileup.

February 29, Southern Guatemala. A greatly overloaded bus crashes while taking a dangerous corner near Jutiapa; at least 45 passengers perish.

March 25, Western Honduras. A passenger bus goes off a highway in the mountains and rolls down a hillside; at least 26 of those aboard are killed.

April 16, Gujarat state, India. In Vadodara a state bus carrying schoolchildren goes off a bridge and falls some 18 m (60 ft) into a canal of the Narmada River; at least 44 children and 3 adults perish.

April 23, Rajasthan state, India. Northwest of Jodhpur, late at night, a truck and a crowded van collide; at least 24 of the van passengers lose their lives.

May 27, KwaZulu-Natal province, South Africa. A bus goes over a cliff and falls some 80 m (260 ft), landing upside-down in the river below; at least 30 people die.

May 29, Southern India. A truck carrying at least 70 people to a wedding falls off a bridge after the driver swerves to avoid electrical wires on the road; at least 39 of the passengers perish.

July 8, Southern Bolivia. A truck carrying some 60 people as well as goods goes off a mountain road, plunging 200 m (650 ft) into a ravine; at least 47 people, among them 12 children, die.

August 2, Bihar state, India. A truck loaded with food grain sacks and people goes off a road into a nearly dry culvert below; at least 40 people die, most of them crushed to death.

August 8, Near Sherman, Texas. An illegally operated chartered bus carrying Vietnamese Roman Catholics to a religious gathering in Carthage, Mo., goes over a guardrail in a crash, killing 17 passengers.

August 15, Dominican Republic. On the highway between La Romana and Higüey, a passenger bus attempting to go around a parked vehicle hits another passenger bus head-on; at least 20 people are killed.

September 8, Eastern Turkey. A bus carrying Iranian tourists in Agri province goes off the road and crashes; at least 16 passengers die.

October 10, Eastern Thailand. On an overnight trip to the coast from a technology university in Khon Kaen province, a bus carrying students crashes into a hillside; at least 22 people are killed, and 50 are badly hurt.

November 4, Near Hannover, Ger. A tour bus carrying elderly passengers home after a day trip to a farm catches fire, possibly because a passenger smoked a cigarette in the bus's restroom; at least 20 people die.

November 15, Near Boromo, Burkina Faso. A collision occurs between a passenger bus carrying workers to Côte d'Ivoire and a commercial truck loaded with sugar, and both vehicles burst into flames, trapping the bus passengers; at least 66 of them perish.

December 16, Israel. A bus transporting Russian tour guides to the resort town of Elat from a nearby airport goes off the road and rolls down a mountain slope; at least 24 of the passengers are killed.

December 27, Tangail, Bangladesh. A truck leaves the road in thick fog and goes into a ditch; at least 24 of the passengers, most of whom were heading home from Dhaka to vote in legislative elections, die.



Miscellaneous

March 29, Luanda, Angola. Dozens of people are crushed to death when a seven-story building housing the headquarters of the police criminal investigation department collapses; the structure had been deteriorating and recently had a large electrical generator installed on its roof.

April 9, Southern Thailand. In a truck carrying illegal Myanmarese (Burmese) migrant workers, 54 of the 121 crammed inside suffocate.

May 20, India. It is reported that at least 110 people in the Bengaluru (Bangalore) area have died in the past few days after drinking illicit alcohol; by May 22 the death toll has risen to 180.

August 3, Himachal Pradesh state, India. Near the Naina Devi temple, fears of a landslide lead to a stampede in which more than 150 pilgrims, most of them women and children, lose their lives.

September 15, Pasuruan, Indon. A Ramadan tradition in which wealthy families give money to the poor results in tragedy when pushing in a crowd awaiting such handouts causes at least 23 people to be crushed to death.

September 30, Jodhpur, Rajasthan state, India. On the first day of a nine-day festival devoted to the Hindu goddess Durga, a stampede possibly caused by pilgrims slipping on coconut milk offerings causes at least 224 people to be trampled to death.

October 1, Tabora, Tanz. At an event in a disco hall to celebrate Ê¿Id al-Fitr, overcrowding among the young people attending engenders panic, and 19 children are crushed in the ensuing stampede.

The us election of 2008

President-elect Barack Obama waves to the crowd at a massive election night rally in Chicago's …
In a national election laden with historical significance, Barack Hussein Obama captured a decisive majority in the 2008 balloting to become the 44th president of the United States; he was scheduled to be sworn into office on Jan. 20, 2009. Obama, a 47-year-old Democratic U.S. senator from Illinois, won the electoral college vote 365–173 over Republican John McCain, a 72-year-old U.S. senator from Arizona. Obama prevailed 52.9–45.7% in the popular vote nationwide on November 4.

Though it seemed that every U.S. election had been hailed as historic, Obama's triumph was exceptional. He became the first African American elected as U.S. president and the first person of colour to head a country with a white-majority population. McCain, in a graceful concession speech, noted the pride that many Americans felt in that development following the long United States record of slavery, segregation, and discrimination. The country, McCain said, is now “a world away from the cruel and prideful bigotry of that time.”

Obama's youth and charisma, and his relative political inexperience, provoked comparisons to U.S. Pres. John F. Kennedy. Obama was elected as the country approached crisis, and this prompted allusions to former presidents Franklin Delano Roosevelt and even Abraham Lincoln. With an unpopular sitting president and the Republican establishment in disarray, Democrats were overwhelming favourites to win the presidency in 2008. After an exhaustive campaign, Obama ultimately made his case by demonstrating an unflappable eloquence that wore away doubts and prompted critics to say that he transcended both racial and partisan politics.

As the party nomination campaigns got under way in early 2007, neither Obama nor McCain was favoured. Obama, especially, was well behind New York Sen. Hillary Clinton; he had first come to national attention only in 2004, in a well-received speech at the Democratic National Convention. Public opinion polls showed that weariness with the U.S. intervention in Iraq was the top issue, but opinion was sharply divided over what should be done. Obama called for a quick withdrawal of U.S. troops, while McCain had long pushed for an escalation in hopes of a decisive military victory. Both approaches appealed to influential elements of their respective party bases.

A U.S. troop “surge” in Iraq approved by Pres. George W. Bush initially produced higher U.S. casualties in early 2007, and many Democrats declared the move a Vietnam-style failure. McCain's campaign nearly collapsed in July when he came close to running out of funds and laid off half of his campaign staff. By late fall, however, it was obvious that the surge was succeeding, and McCain began mounting a notable resurgence. His main opponents—former New York City mayor Rudy Giuliani, former Arkansas governor Mike Huckabee, and former Massachusetts governor Mitt Romney—failed to catch fire, and a late bid by former Tennessee senator Fred Thompson fell short. By early 2008 McCain was the clear Republican front-runner. The Republican contest was officially over in early March, but McCain was favoured to win the nomination when he defeated Huckabee in a competitive South Carolina primary on January 19.

Obama had a far-more-difficult road. Although he attracted enthusiastic crowds and solid fund-raising totals from the start, he plodded through innumerable 2007 candidate joint appearances without distinguishing himself. Clinton's campaign successfully portrayed her as the inevitable nominee, with a substantial early lead in establishment support, fund-raising, and public opinion polls. Clinton also had serious problems, however. Many Democrats feared that she and her husband, former president Bill Clinton, were polarizing figures and that she could not win a general election; in addition, her campaign staff fought internally and failed to produce a winning strategic plan.

Obama, by contrast, combined an uplifting speaking style with a smoothly functioning campaign that became known as “no-drama Obama.” While Clinton went for knockout victories in early deciding Democratic states, Obama played a longer game, seeking delegates by the ones and twos all over the country. His campaign tapped thousands of small contributors through the Internet and then approached them repeatedly for more funding. To counter Clinton's inside experience, Obama underscored his status as an outsider, promising “hope and change” and encouraging rally supporters to proclaim, “Yes we can.”

At the first real test of strength, in the Iowa caucuses on Jan. 3, 2008, Obama's organization helped turn out more than 250,000 Iowan caucus goers—double the previous record turnout—and scored a decisive victory. Polls in New Hampshire, the site of the next primary event, showed Obama edging ahead, and it seemed likely that the nomination might be unexpectedly decided in January. Clinton scored a narrow New Hampshire victory, however, and as other candidates began dropping out, Obama and Clinton began a long ground war through the winter and spring.

Obama suffered several setbacks. The underperforming Clinton campaign produced a television ad, “Red Phone 3 AM.” that skillfully exploited widespread voter doubts about Obama's readiness to handle an international crisis. Some critics began accenting his middle name, implying that he was Muslim, and hinting that he had benefited from racial preferences. Obama eventually became enmeshed by ties to a series of Illinois allies, including former 1960s radical William Ayers, political fixer Tony Rezko, and the Rev. Jeremiah Wright, Obama's longtime family pastor. Over several weeks, copies of Wright's fiery sermons, laced with black nationalism, and his aggressive press statements put Obama on the defensive. A tape surfaced showing Wright blasting U.S. foreign policy after 9/11—“God damn America”—and Obama defensively claimed he was unaware of many of Wright's views.

Obama confronted the matter head-on, delivering on March 18 a well-received speech on race in U.S. politics at the National Constitution Center museum in Philadelphia. He declared that America had long suffered from excessive attention to racial differences; the choice now was to remain there, preoccupied by a distraction, or alternatively to move on to resolving real American problems. While his remarks were criticized as self-serving, the speech quickly diffused his Wright association problems, and Obama was bolstered by handling his most difficult issue with sober aplomb.

The Obama campaign pounced when Clinton told several audiences about being “under fire” while arriving in 1996 at an airport in Bosnia and Herzegovina. A tape of the event showed a schoolgirl handing her flowers but no gunfire. For his part, Obama was taped telling a wealthy San Francisco fund-raising audience that frustrated working-class Americans tended to “get bitter, they cling to guns or religion.”

After an extended period of wooing convention superdelegates—usually elected and party officials—Obama finally won sufficient backing to claim the Democratic nomination on June 3, the final day of the primary season. Clinton conceded four long days later. Clinton had won most big primary states—including New York, California, New Jersey, Texas, Ohio, and Massachusetts—and captured more popular primary votes. Obama prevailed, however, with a tortoise-and-hare strategy and his superior organization. He was especially strong in caucus states, where depth of loyalty was tested, and among superdelegates concerned about electability in the general election.

As they prepared to name their vice presidential running mates, both McCain and Obama needed to shore up important segments of their support. McCain, still too moderate for many conservative GOP voters, needed an infusion of party enthusiasm. Obama had been faulted for a lack of foreign policy experience; he made a belated first-ever trip Afghanistan in late July.

Though supporters of Clinton made a major push on her behalf for the vice presidential spot, Obama eventually selected as his running mate Delaware Sen. Joe Biden, chairman of the Senate Foreign Relations Committee. Biden, a 36-year Senate veteran, had earlier dropped his own bid for the nomination, but he was a proven commodity unlikely to produce negative surprises. The choice was readily accepted by the Democratic National Convention in Denver, where Obama gave a highly publicized acceptance speech at Invesco Field before some 75,000 party faithful.

For his part, McCain threw a bombshell into the equation by choosing as his vice presidential running mate Sarah Palin, the largely unknown two-year governor of Alaska. Palin arrived on the national stage as a photogenic fresh face, with populist and reformer credentials and solid support from social conservatives. Almost single-handedly, Palin energized the GOP base and electrified what had promised to be a lacklustre Republican National Convention in St. Paul, Minn., in early September. When McCain began touring the country with Palin, his crowds grew notably larger and more enthusiastic. The polling “bounce” from Palin was so large that in early September public opinion polls put McCain ahead of Obama by a small margin.

While Biden had been carefully examined over the years and any shortcomings identified and discounted, Palin was largely unknown to the skeptical national press. She had been selected quickly and had little time to become immersed in federal issues, especially foreign affairs, and this caused critics to question her readiness to assume the presidency. Palin's initial national press interviews had shaky moments, and the news that the Republican National Committee had purchased for her $150,000 in clothing and accessories largely offset her initial boost to the McCain ticket.

Obama made a key decision at midyear. During the primary, under prompting by McCain, Obama stated that he would accept public funding for the general election under a law that capped campaign expenditures. As his fund-raising success exceeded all previous records, however, Obama reversed field, declined federal funds, and eventually collected some $745 million in contributions—double the total of any previous presidential candidate. McCain raised about $320 million, including the $84 million in public financing allotted to each candidate. That disparity allowed Obama to dominate the final months in both media and organization efforts across the country. McCain's camp protested that Obama's reversal on public financing received only modest criticism from news organizations and reflected media bias favouring the Democrat. Obama, again playing it safe and exploiting his financial advantage, later declined McCain's invitation to stage a series of 10 town-hall-style debates across the country.

Relevant election issues shifted over the campaign. With Iraq becoming more secure by the day, public concern over the costly war on terrorism eased, ironically moving a potentially potent McCain issue to the back burner. In the meantime, Obama toned down his early liberal issue positions, balancing his Iraq withdrawal stance by advocating more U.S. troops for the Afghanistan front. He also exploited a growing uncertainty over the economy by calling for a middle-class tax cut (he promised that 95% of working Americans would see a reduced tax bill) and universal health care for all Americans—to be achieved without a government takeover of the system.

With McCain running as a moderate and Obama tacking toward the centre in the general election, issue distinctions between the candidates were minimized. For example, by mid-2008 voters were more concerned with rising energy prices (gasoline topped $4 per gallon) than with any terrorist threat. On one key hot-button energy issue, however, both McCain and Obama were in agreement—they opposed oil and natural-gas exploration in the Arctic National Wildlife Refuge.

On September 15 the election took a decisive turn when the Lehman Brothers investment banking house collapsed into bankruptcy. As the contagion spread to brokerage and even insurance firms, public confidence in both the economy and government oversight plummeted, causing serious damage to McCain, a free-market advocate, and lending credibility to Obama's mantra for change. McCain's tenuous polling lead disappeared.

As Congress debated the economic situation in late September, McCain dramatically suspended his campaign, returned to Washington, and demanded a White House meeting on the crisis. The same day Lehman failed, he claimed that the “fundamentals of our economy are strong,” but a few days later he compared Wall Street to a casino and promised to fire the nation's top securities regulator. He also threatened for a time to boycott the first scheduled debate, which was set to take place on September 26, claiming that action on the economy deserved priority. For his part, Obama joined the White House discussion but took a low-key approach and refused to call off the debate. When McCain could not persuade congressional Republicans to back an initial federal intervention idea, both his leadership and his judgment came under fire.

Obama's coolness in the face of the financial meltdown and McCain's erratic reaction likely sealed the election, eroding remaining doubts about Obama's relative ability to handle a crisis. As Time magazine recounted the episode later, “The assumption all year was that if the Furies delivered turmoil to the doorstep of this election, the country would retreat to the safe choice and not risk a rookie. It was Obama's triumph that the financial crisis that might have buried him actually raised him up, let voters judge his judgment in real time, the 3 AM phone call that came night after night.”

The three presidential debates were largely uneventful. McCain, seeking to counter opinion that he was too old, debated in an animated and forceful manner, but Obama, who typically avoided as much back-and-forth as possible, appeared calm and presidential by contrast. In mid-October a man hoping to buy a plumbing business challenged Obama during an unscripted campaign visit to an Ohio neighbourhood; the man claimed that small business would be hurt by Obama's plan to increase taxes on upper-income earners. Obama replied that “when you spread the wealth around, it's good for everybody.”

The incident provided a final ray of hope for the McCain camp. Republicans implied that Obama's comments endorsed socialism, and at the final debate on October 15, McCain made repeated references to “Joe the Plumber” and the harm Obama's policies might inflict on a fragile economy. Cracks appeared in Joe's life story, however, and the Obama camp claimed that Joe might actually receive a tax cut under their overall plan. As a result, the final barrier to Obama's election faded away.

 On election day, voter turnout topped 131 million, or 61.6% of eligible voters, the highest total percentage since 1968. Exit polls showed blacks, Hispanics, and young people voting in notably greater numbers. Obama carried 28 states (including 9 won in 2004 by President Bush), virtually sweeping the Northeast, the Midwest, and the West Coast and even making serious inroads into the Deep South and Mountain West areas that had been recent Republican redoubts. Democrats also made decisive gains in congressional elections, gaining a net 21 House seats (for a 257–178 advantage) and picking up at least 7 Senate seats, or a 58–41 majority. A possible eighth Democratic gain, in Minnesota, was still under dispute at year's end.

Obama's success was based on a large number of factors: his personal charisma and eloquence, his well-organized and sure-footed campaign, voter weariness with a Republican White House, a struggling national economy, and his overwhelming advantage in fund-raising. Despite his best efforts, McCain could not separate himself from the status quo. In the end the American people were ready for change from politics as usual, and Obama had demonstrated that he was best able to provide it.

Do you know the global economic crises that threatened the world in 2008

In 2008 the world economy faced its most dangerous crisis since the Great Depression of the 1930s. The contagion, which began in 2007 when sky-high home prices in the United States finally turned decisively downward, spread quickly, first to the entire U.S. financial sector and then to financial markets overseas. The casualties in the United States included a) the entire investment banking industry, b) the biggest insurance company, c) the two enterprises chartered by the government to facilitate mortgage lending, d) the largest mortgage lender, e) the largest savings and loan, and f) two of the largest commercial banks. The carnage was not limited to the financial sector, however, as companies that normally rely on credit suffered heavily. The American auto industry, which pleaded for a federal bailout, found itself at the edge of an abyss. Still more ominously, banks, trusting no one to pay them back, simply stopped making the loans that most businesses need to regulate their cash flows and without which they cannot do business. Share prices plunged throughout the world—the Dow Jones Industrial Average in the U.S. lost 33.8% of its value in 2008—and by the end of the year, a deep recession had enveloped most of the globe. In December the National Bureau of Economic Research, the private group recognized as the official arbiter of such things, determined that a recession had begun in the United States in December 2007, which made this already the third longest recession in the U.S. since World War II.

Each in its own way, economies abroad marched to the American drummer. By the end of the year, Germany, Japan, and China were locked in recession, as were many smaller countries. Many in Europe paid the price for having dabbled in American real estate securities. Japan and China largely avoided that pitfall, but their export-oriented manufacturers suffered as recessions in their major markets—the U.S. and Europe—cut deep into demand for their products. Less-developed countries likewise lost markets abroad, and their foreign investment, on which they had depended for growth capital, withered. With none of the biggest economies prospering, there was no obvious engine to pull the world out of its recession, and both government and private economists predicted a rough recovery.



Origins.

How did a crisis in the American housing market threaten to drag down the entire global economy? It began with mortgage dealers who issued mortgages with terms unfavourable to borrowers, who were often families that did not qualify for ordinary home loans. Some of these so-called subprime mortgages carried low “teaser” interest rates in the early years that ballooned to double-digit rates in later years. Some included prepayment penalties that made it prohibitively expensive to refinance. These features were easy to miss for first-time home buyers, many of them unsophisticated in such matters, who were beguiled by the prospect that, no matter what their income or their ability to make a down payment, they could own a home.

Mortgage lenders did not merely hold the loans, content to receive a monthly check from the mortgage holder. Frequently they sold these loans to a bank or to Fannie Mae or Freddie Mac, two government-chartered institutions created to buy up mortgages and provide mortgage lenders with more money to lend. Fannie Mae and Freddie Mac might then sell the mortgages to investment banks that would bundle them with hundreds or thousands of others into a “mortgage-backed security” that would provide an income stream comprising the sum of all of the monthly mortgage payments. Then the security would be sliced into perhaps 1,000 smaller pieces that would be sold to investors, often misidentified as low-risk investments.

The insurance industry got into the game by trading in “credit default swaps”—in effect, insurance policies stipulating that, in return for a fee, the insurers would assume any losses caused by mortgage-holder defaults. What began as insurance, however, turned quickly into speculation as financial institutions bought or sold credit default swaps on assets that they did not own. As early as 2003, Warren Buffett, the renowned American investor and CEO of Berkshire Hathaway, called them “financial weapons of mass destruction.” About $900 billion in credit was insured by these derivatives in 2001, but the total soared to an astounding $62 trillion by the beginning of 2008.

As long as housing prices kept rising, everyone profited. Mortgage holders with inadequate sources of regular income could borrow against their rising home equity. The agencies that rank securities according to their safety (which are paid by the issuers of those securities, not by the buyers) generally rated mortgage-backed securities relatively safe—they were not. When the housing bubble burst, more and more mortgage holders defaulted on their loans. At the end of September, about 3% of home loans were in the foreclosure process, an increase of 76% in just a year. Another 7% of homeowners with a mortgage were at least one month past due on their payments, up from 5.6% a year earlier. By 2008 the mild slump in housing prices that had begun in 2006 had become a free fall in some places. What ensued was a crisis in confidence: a classic case of what happens in a market economy when the players—from giant companies to individual investors—do not trust one another or the institutions that they have built.



The Crisis Unfolds.

The first major institution to go under was Countrywide Financial Corp., the largest American mortgage lender. Bank of America agreed in January 2008 to terms for completing its purchase of the California-based Countrywide. With large shares of Countrywide's mortgages delinquent, Bank of America was able to buy it for $4 billion on top of the $2 billion stake that it had acquired the previous August—a fraction of Countrywide's recent market value.

The next victim, in March, was the Wall Street investment house Bear Stearns, which had a thick portfolio of mortgage-based securities. As the value of those securities plummeted, Bear was rescued from bankruptcy by JPMorgan Chase, which agreed to buy it for a bargain-basement price of $10 per share (about $1.2 billion), and the Federal Reserve (Fed), which agreed to absorb up to $30 billion of Bear's declining assets.

If the Fed's involvement in the bailout of Bear Stearns left any doubt that even a conservative Republican government—such as that of U.S. Pres. George W. Bush—could find it necessary to insert itself into private enterprise, the rescue of Fannie Mae and Freddie Mac in September laid that uncertainty to rest. The two private mortgage companies, which historically enjoyed a slight edge in the marketplace by virtue of their congressional charters, held or guaranteed about half of the country's mortgages. With the rush of defaults of subprime mortgages, Fannie and Freddie suffered the same losses as other mortgage companies, only worse. The U.S. Department of the Treasury, unwilling to abide the turmoil that the failure of Fannie and Freddie would entail, seized control of them on September 7, replaced their CEOs, and promised each up to $100 billion in capital if necessary to balance their books.

The month's upheavals were not over. With Bear Stearns disposed of, the markets bid down share prices of Lehman Brothers and Merrill Lynch, two other investment banks with exposure to mortgage-backed securities. Neither could withstand the heat. Under pressure from the Treasury, Merrill Lynch, whose “bullish on America” slogan had made it the popular embodiment of Wall Street, agreed on September 14 to sell itself to Bank of America for $50 billion, half of its market value within the past year. Lehman Brothers, however, could not find a buyer, and the government refused a Bear Stearns-style subsidy. Lehman declared bankruptcy the day after Merrill's sale.

Next on the markets' hit list was American International Group (AIG), the country's biggest insurer, which faced huge losses on credit default swaps. With AIG unable to secure credit through normal channels, the Fed provided an $85 billion loan on September 16. When that amount proved insufficient, the Treasury came through with $38 billion more. In return, the U.S. government received a 79.9% equity interest in AIG.

Five days later saw the end for the big independent investment banks. Goldman Sachs and Morgan Stanley were the only two left standing, and their big investors, worried that they might be the markets' next targets, began moving their billions to safer havens. Rather than proclaim their innocence all the way to bankruptcy court, the two investment banks chose to transform themselves into ordinary bank holding companies. That put them under the respected regulatory umbrella of the Fed and gave them access to the Fed's various kinds of credit for the institutions that it regulates.

On September 25, climaxing a frenetic month, federal regulators seized the country's largest savings and loan, Seattle-based Washington Mutual (WaMu), and brokered its sale to JPMorgan Chase for $1.9 billion. JPMorgan also agreed to absorb at least $31 billion in WaMu's losses. Finally, in October, the Fed gave regulatory approval to the purchase of Wachovia Corp., a giant North Carolina-based bank that was crippled by the subprime-mortgage fiasco, by California-based Wells Fargo. Other banks also foundered, including some of the largest. In November the Treasury shored up Citigroup by guaranteeing $250 billion of its risky assets and pumping $20 billion directly into the bank.

There were competing theories on how so many pillars of finance in the U.S. crumbled so quickly. One held the issuers of subprime mortgages ultimately responsible for the debacle. According to this view, when mortgage-backed securities were flying high, mortgage companies were eager to lend to anyone, regardless of the borrower's financial condition. The firms that profited from this—from small mortgage companies to giant investment banks—deluded themselves that this could go on forever. Joseph E. Stiglitz of Columbia University, New York City, the chairman of the Council of Economic Advisers during former president Bill Clinton's administration, summed up the situation this way: “There was a party going on, and no one wanted to be a party pooper.”

Some claimed that deregulation played a major role. In the late 1990s, Congress demolished the barriers between commercial and investment banking, a change that encouraged risky investments with borrowed money. Deregulation also ruled out most federal oversight of “derivatives”—credit default swaps and other financial instruments that derive their value from underlying securities. Congress also rejected proposals to curb “predatory loans” to home buyers at unfavourable terms to the borrowers.

Deregulators scoffed at the notion that more federal regulation would have alleviated the crisis. Phil Gramm, the former senator who championed much of the deregulatory legislation, blamed “predatory borrowers” who shopped for a mortgage when they were in no position to buy a house. Gramm and other opponents of regulation traced the troubles to the 1977 Community Reinvestment Act, an antiredlining law that directed Fannie Mae and Freddie Mac to make sure that the mortgages that they bought included some from poor neighbourhoods. That, Gramm and his allies argued, was a license for mortgage companies to lend to unqualified borrowers.

As alarming as the blizzard of buyouts, bailouts, and collapses might have been, it was not the most ominous consequence of the financial crisis. That occurred in the credit markets, where hundreds of billions of dollars a day are lent for periods as short as overnight by those who have the capital to those who need it. The banks that did much of the lending concluded from the chaos taking place in September that no borrower could be trusted. As a result, lending all but froze. Without loans, businesses could not grow. Without loans, some businesses could not even pay for day-to-day operations.

Then came a development that underscored the enormity of the crisis. The Reserve Primary Fund, one of the U.S.'s major money-market funds, announced on September 16 that it would “break the buck.” Money-market funds constitute an important link in the financial chain because they use their deposits to make many of the short-term loans that large corporations need. Although money-market funds carry no federal deposit insurance, they are widely regarded as being just as safe as bank deposits, and they attract both large and small investors because they earn rates of return superior to those offered by the safest of all investments, U.S. Treasury securities. So it came as a jolt when Reserve Primary, which had gotten into trouble with its loans to Lehman Brothers, proclaimed that it would be unable to pay its investors any more than 97 cents on the dollar. The announcement triggered a stampede out of money-market funds, with small investors joining big ones. Demand for Treasury securities was so great that the interest rate on a three-month Treasury bill was bid down practically to zero. In a September 18 meeting with members of Congress, Fed Chairman Ben S. Bernanke was heard to remark that if someone did not do something fast, by the next week there might not be an economy to rescue.

If government policy makers had taken any lesson from the Great Depression, it was that tight money, high taxes, and government spending restraint could aggravate the crisis. The Treasury and the Fed seemed to compete for the honour of biggest economic booster. The Fed's usual tool—reducing short-term interest rates—did not unlock the credit markets. By year's end its target for the federal funds rate, which banks charge one another for overnight loans, was about as low as it could get: a range of 0–0.25%. So the Fed dusted off other ways of injecting money into the economy, through loans, loan guarantees, and purchases of government securities. By December the Fed had pumped more than $1 trillion into the economy and signaled its intention to do much more.

Treasury Secretary Henry Paulson asked Congress to establish a $700 billion fund to keep the economy from seizing up permanently. Paulson initially intended to use the new authority to buy mortgage-based securities from the institutions that held them, thus freeing their balance sheets of toxic investments. This approach drew a torrent of criticism: How could anyone determine what the securities were worth (if anything)? Why bail out the large institutions but not the homeowners who were duped into taking out punitive mortgages? How would the plan encourage banks to resume lending? The House of Representatives voted his plan down once before accepting a slightly revised version.

After the plan's enactment, Paulson, acknowledging that his approach would not encourage sufficient new bank lending, did a U-turn. The Treasury would instead invest most of the newly authorized bailout fund directly into the banks that held the toxic securities (thus giving the government an ownership stake in private banks). This, Paulson and others argued, would enable the banks to resume lending. By the end of 2008, the government owned stock in 206 banks. The Treasury's new stance appeared to open access to the bailout money to anyone suffering from the frozen credit markets. This was the basis for the auto manufacturers' plea for a piece of the pie.

Still, all that money did little, at least at first, to stimulate private bank lending. Everyone with money to lend turned to the safest haven of all—Treasury securities. So popular were short-term Treasuries that investors in December bought $30 billion worth of four-week Treasury bills that paid no interest at all, and, very briefly, the market interest rate on three-month Treasuries was negative.

The Bush administration did little with tax and spending policy to combat the recession. Sen. Barack Obama, who was elected in November to succeed President Bush as of Jan. 20, 2009, prepared a package of about $1 trillion in tax cuts and spending programs to stimulate economic activity.



International Repercussions.

Although the financial crisis wore a distinct “Made in the U.S.A.” label, it did not stop at the water's edge. The U.K. government provided $88 billion to buy banks completely or partially and promised to guarantee $438 billion in bank loans. The government began buying up to $64 billion worth of shares in the Royal Bank of Scotland and Lloyds TSB Group after brokering Lloyds' purchase of the troubled HBOS bank group. The U.K. government's hefty stake in the country's banking system raised the spectre of an active role in the boardrooms. Barclays, telling the government “thanks but no thanks,” instead accepted $11.7 billion from wealthy investors in Qatar and Abu Dhabi, U.A.E.

Variations played out all through Europe. The governments of the three Benelux countries—Belgium, The Netherlands, and Luxembourg—initially bought a 49% share in Fortis NV within their respective countries for $16.6 billion, though Belgium later sold most of its shares and The Netherlands nationalized the bank's Dutch holdings. Germany's federal government rescued a series of state-owned banks and approved a $10.9 billion recapitalization of Commerzbank. In the banking centre of Switzerland, the government took a 9% ownership stake in UBS. Credit Suisse declined an offer of government aid and, going the way of Barclays, raised funds instead from the government of Qatar and private investors.

The most spectacular troubles broke out in the far corners of Europe. In Greece street riots in December reflected, among other things, anger with economic stagnation. Iceland found itself essentially bankrupt, with Hungary and Latvia moving in the same direction. Iceland's three largest banks, privatized in the early 1990s, had grown too large for their own good, with assets worth 10 times the entire country's annual economic output. When the global crisis reached Iceland in October, the three banks collapsed under their own weight. The national government managed to take over their domestic branches, but it could not afford their foreign ones.

As in the U.S., the financial crisis spilled into Europe's overall economy. Germany's economic output, the largest in Europe, contracted at annual rates of 0.4% in the second quarter and 0.5% in the third quarter. Output in the 15 euro zone countries shrank by 0.2% in each of the second and third quarters, marking the first recession since the euro's debut in 1999.

In an atmosphere that bordered on panic, governments throughout Europe adopted policies aimed at keeping the recession short and shallow. On monetary policy, the central banks of Europe coordinated their interest-rate reductions. On December 4 the European Central Bank, the steward of monetary policy for the euro zone, engineered simultaneous rate cuts with the Bank of England and Sweden's Riksbank. A week later the Swiss National Bank cut its benchmark rate to a range of 0–1%. On fiscal policy, European governments for the most part scrambled to approve public-spending programs designed to pump money into the economy. The EU drew up a list of $258 billion worth of public spending that it hoped would be adopted by its 27 member countries. The French government said that it would spend $33 billion over the next two years. Most other countries followed suit, though Germany hung back as Chancellor Angela Merkel argued for fiscal restraint.

Asia's major economies were swept up by the financial crisis, even though most of them suffered only indirect blows. Japan's and China's export-oriented industries suffered from consumer retrenchment in the U.S. and Europe. Compounding the damage, exporters could not find loans in the West to finance their sales. Japan hit the skids in the second quarter of 2008 with a 3.7% contraction at an annual rate, followed by 0.5% in the third quarter. Its all-important exports plunged 27% in November from 12 months earlier. The government announced a $250 billion package of fiscal stimulus in December on top of $50 billion earlier in the year. Unlike so many others, China's economy continued to grow but not at the double-digit rates of recent years. Exports were actually lower in November than in the same month a year earlier, quite a change from October's 19% increase. The government prepared a two-year $586 billion economic stimulus plan, and the central bank repeatedly cut interest rates.

The U.S., Europe, and Asia had this in common—car makers were at the head of the line of industries pleading for help. The U.S. Senate turned down $14 billion in emergency loans; the car companies got into this mess, senators argued, and it was up to them to get out of it. President Bush, rather than risk the demise of General Motors (GM) and Chrysler, tapped the $700 billion financial sector bailout fund to provide $17 billion in loans—enough to keep the two companies afloat until safely after the Obama administration took over in early 2009. In addition, the Treasury invested in a $5 billion equity position with GMAC, GM's financing company, and loaned it another $1 billion. In Europe, Audi, BMW, Daimler, GM, Peugeot, and Renault announced production cuts, but European government officials were reluctant to aid a particular industry for fear that others would soon be on their doorstep. Even in China, car sales growth turned negative. As elsewhere, the industry held out its tin cup, but the government left it empty.

The pressures of the financial crisis seemed to be forging more new alliances. Officials from Washington to Beijing coordinated interest rate cuts and fiscal stimulus packages. Top officials from China, Japan, and South Korea—longtime adversaries—met in China and promised a cooperative response to the crisis. Top-level representatives of the Group of 20 (G-20)—a combination of the world's richest countries and some of its fastest-growing—met in Washington in November to lay the groundwork for global collaboration. The G-20's deliberations were necessarily tentative in light of the U.S. presidential transition in progress.

By year's end, all of the world's major economies were in recession or struggling to stay out of one. In the final four months of 2008, the U.S. lost nearly two million jobs. The unemployment rate shot up to 7.2% in December from its recent low of 4.4% in March 2007, and it was almost certain to continue rising into 2009. Economic output shrank by 0.5% in the third quarter, and announced layoffs and severe cutbacks in consumer spending suggested that the fourth quarter saw a sharper contraction. It was doubtful that the worldwide economic picture would grow brighter anytime soon. Forecast after forecast showed lethargic global economic growth for at least 2009. “Virtually no country, developing or industrial, has escaped the impact of the widening crisis,” the World Bank reported in a typical year-end assessment. It forecast an increase in global economic output of just 0.9% in 2009, the most tepid growth rate since records became available in 1970.

Measured by its impact on global economic output, the recession that had engulfed the world by the end of 2008 figured to be sharper than any other since the Great Depression. The two periods of hard times had little else in common, however; the Depression started in the manufacturing sector, while the current crisis had its origins in the financial sector. Perhaps a more apt comparison could be found in the Panic of 1873. Then, as in 2008, a real estate boom (in Paris, Berlin, and Vienna, rather than in the U.S.) went sour, loosing a cascade of misfortune. The ensuing collapse lasted four years.

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