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Chapter 20

SOCI 1F90 Chapter Notes - Chapter 20: Unsecured Debt, Neoliberalism, Shaky Ground


Department
Sociology
Course Code
SOCI 1F90
Professor
Michelle Webber
Chapter
20

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SOCI 1F90: Introduction to Sociology
Rethinking Society – Chapter 20
Wednesday, February 24th, 2016
Neo-Liberalism, Families, and Work-Life Balance by Kate Bezanson (pg. 217 – 230)
Introduction: A Wile E. Coyote Fall
Focus of this chapter:
Asks some fundamental questions about the economic crisis and its implications for work and families in
Canada
Argues that the protections that might have shielded families and workers from the worst effects of this
crisis were dismantled in the “Road Runner” capitalism years leading up to the fall of 2008
The article proceeds in five stages:
1. It explores what has happened in Canada since the crash of 2008
2. It explains neo-liberalism and how the logic of this kind of economic model left workers and families on
shaky ground
3. It considers social supports in the Canadian welfare state and argues that before the crisis of 2008, there
were few supports to balance work and family and to offset income insecurity or shortfalls
4. It profiles one family’s story from a longitudinal case study of 49 families in Ontario who are balancing
significant work and caregiving responsibilities
5. It discusses the future of work and family, and suggests that far from learning from the errors of neo-
liberal market rule, we have entered into a new era of “strategic” neo-liberalism, intensifying the existing
problems families face
The Stormy Present: What Happened in the Fall of 2008?
In September 2008, the United States and Europe had panicked discussions about economic bailouts by
governments that were underway
For several months, Canadians felt somewhat insulted from the effects of the meltdown in financial
markets
Prime Minister Harper showed little concern in the early days of the economic meltdown
But, by January 2009, layoff were almost daily announcements and Ontario was particularly hard-hit as
the meltdown in the U.S. auto sector travelled north
There was no doubt that the effects of the economic recession were going to be devastating for Canada
This was underlined by the Harper Conservatives almost losing their minority government over
their handling of the economic situation
In spite of the mounting evidence of Canada’s vulnerability, there was no response to the global crisis to
stem the tide of job loss and support industry, as other countries were doing
By January 2009, Prime Minister Harper introduced a new budget, heavy on spending and more
in line with the kind of responses governments of wealthy nations took around the world to
attempt to remedy the crisis
At the heart of the crisis was an under-regulated credit market that treated debt as assets
This played out most dramatically in the subprime mortgage market where the artificially inflated prices
of homes allowed owners to access large amounts of credit
The biggest crash happened in the early 2000s, after September 11th, 2001 and the crash of Internet stocks
The U.S. economy, among others, faced the prospect of recession, so interest rates were dropped
dramatically
When interest rates drop, it is much cheaper to borrow money and to buy or refinance houses
Counting on the continued appreciation of value in homes, financial institutions continued to buy up
unsecured debt
When interest rates rose in 2006, many people were not able to meet their payments
Reckless mortgage companies were backed by banks and other financial institutions
Banks could no longer lend money to another as they normally did, and they began to sell off assets,
making the problem worse
Governments tried to buy up bad assets to get the financial system moving again
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