The question explored in this paper is the relationship between national politics and the stock market. There is an interesting relationship between Washington and Wall Street that has existed in the United States for decades that many citizens either do not know or do not understand. Government has had an increasingly influential role in the economy of the United States, particularly since the creation of the Federal Reserve. We seek to understand and explain the impact the balance of power in Washington and political activity can have on the performance of the stock market.

This article investigates the behavior within the financial services industry that contributed to the Crash of 2008 and the Great Recession of 2009 – 2010. Based on the theory of Adam Smith, it is not the typical academic paper as it analyzes the work of industry practitioners who wrote about the run-up of real estate and stock prices between 2003 –2009 and the ultimate collapse. It is also an examination of the role of government in the economy and the financial services industry. The intent is to initiate conversations about ethics in the Finance major of America’s colleges and universities.

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