1 History 17C The American People, World War I to the Present 1

Black Septembers 9/11 and After The Financial Meltdown of 2008

3 Themes: The attacks of September 11, 2001, inflicted major human, material, and psychic damage on the United States. They also led, indirectly, to a fundamental transformation in the US government’s relationship to the outside world and to US citizens and residents.

4 While many, though by no means all, of those changes have been recently repealed, we will be living with their legacy for years to come. Themes:

Similarly, the financial meltdown of 2008 altered the economic and political landscape in ways that will continue to shape the future of this country and the world. Themes:

6 George W. Bush

7 On foreign policy, Bush administration divided between pragmatists and hawks

8 Secretary of State Colin Powell

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10 Vice President Richard Cheney

11 Secretary of Defense Donald Rumsfeld

12 Deputy Secretary of Defense Paul Wolfowitz

13 Hawks’ focus on Saddam Hussein 13

14 September 11, 2001— al-Qa‘ida-sponsored hijackers flew planes into World Trade Center and Pentagon, killing about 3,000

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16 After 9/11 Taliban rejected US demand that they turn over bin Laden

17 So Bush sent US forces to attack Taliban and al-Qa‘ida in Afghanistan

18 Northern Alliance

19 November-December 2001—Taliban were defeated

20 Pro-US government, under Hamid Karzai, took power in Kabul

21 But bin Laden escaped from Tora Bora into Pakistan

22 Guantánamo Bay Detention Facility

23 Guantánamo Bay Detention Facility

24 Alberto Gonzales John Yoo

25 “Extraordinary Rendition”

26 By early 2002 Bush administration was shifting its focus from bin Laden to Saddam Hussein

27 By early 2002 Bush administration was shifting its focus from bin Laden to Saddam Hussein

28 Saddam Hussein and Weapons of Mass Destruction (WMD)

29 CIA rendering of Curveball’s claim —Iraqi defector Rafid Ahmad Alwan (aka “Curveball”) told German intelligence that Saddam Hussein had built mobile biological weapons labs

—Under torture in Egyptian prison, Ibn al-Shaykh al-Libi claimed that Iraq had provided al-Qa‘ida with training in chemical and biological weapons

31 February 2003—Secretary of State Colin Powell repeated both Curveball’s and al-Libi’s claims at United Nations

32 September 2002—Bush called on UN to pass resolution demanding that Iraq disarm itself of weapons of mass destruction

33 October 2002—Supplied with misleading intelligence, Congress passed Iraq War Resolution CIA “White Paper” on Iraq and WMD

34 November 2002—UN Security Council passed Resolution 1441, calling on Iraq to disarm itself of weapons of mass destruction, warning of “serious consequences” if it failed to do so

35 Late 2002—UN inspectors started operating in Iraq

36 December 2002-January 2003—US deployed more troops to Persian Gulf; France and Germany opposed use of force without subsequent UN resolution German Foreign Minister Joschka Fischer

37 Early 2003—UN weapons inspectors found no evidence of WMD programs but asked for more time to continue investigation Chief UN weapons inspector Hans Blix

38 March 2003—US, Britain, and “coalition of the willing” launched Iraq War without second UN resolution

39 April 2003—Saddam Hussein regime fell; but US forces failed to provide adequate security, permitting widespread looting and violence

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41 Summer 2003—Iraqi Insurgency broke out

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December 2011—US troops withdrawn from Iraq

October 13, 2008

—Glass-Steagall Act Established Federal Deposit Insurance Corporation (FDIC) Limited banks’ ability to engage in speculative investment Henry Steagall Carter Glass

—Gramm-Leach-Blily Act Repealed Glass-Steagall’s restrictions on speculative investment

s—Rise of Mortgage- Backed Securities

48 Housing Bubble

—Uh oh...

50 Dilemma—“Systemic Risk” vs. “Moral Hazard Systemic Risk: If huge lending firms are allowed to fail, the entire financial system could collapse Moral Hazard: If the government starts bailing firms out, firms will have no incentive to behave responsibly Treasury Secretary Henry Paulson

51 March 2008—Federal government helped JP Morgan absorb failing Bear Stearns

52 September 2008—Lehman Brothers teetered on collapse Lehman Brothers CEO Richard Fuld

53 Timothy Geithner President, New York Federal Reserve Bank

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56 Mid-September 2008—Bush administration proposed $700 billion emergency bailout of US financial industry President Bush with Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson

57 Mid-September 2008—Bush administration proposed $700 billion emergency bailout of US financial industry Early October—Congress approved bailout President Bush with Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson

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