Yet if you look at the statistics, real worker wages have continued to be flat for this period. The crisis itself was the greatest looting of the public purse in history. The crisis itself was a huge wealth transfer. The Obama administration should have forced a lot more recognition of the losses. These losses were real. They should have forced more loan write-downs. And recognition of the loss to the financial system. And they should have had a huge stimulus to offset the downdraft of recognizing those losses.
And in fact the Japanese, early in their crisis, they said the biggest mistake we made was not writing down the bad loans in the banking system. And we did this in a more indirect manner by having the Fed engineer these super-low interest rates that were a transfer from savers to the financial system. So that reduction of income right there, you see today. It used to be that if you were a saver or an asset holder, you could get a decent positive return doing something not crazy. And the Fed took that away.
The big reason the pensions are in crisis is because the way we dealt with the crisis. We have this fallacy that normal people should be able to save for retirement. Why do you think we have Trump? What you hear from these coastal elites: People over 40, even over 35, are basically non-hirable. Are you gonna train them? This is one of my criticisms of the Obama administration, but now appears to be true of the Democratic Party generally, that they think the solution for every problem is better PR.
Boots Riley Musician and filmmaker The quote-unquote real-estate boom was all bullshit. You should be buying a house. And that any other view was an irresponsible view! To bring it up as this being a contradiction was to be thought of as some sort of conspiracy theorist. Steve Rattner Financier I think the job that was done by both the Bush administration and the Obama administration was really remarkable in retrospect. They were operating in real time, with banks literally close to failure over a weekend, banks having to be merged over a weekend to be saved. I suspect that if I looked at the auto thing, I might think of some things we should have done differently, but not many.
So I think we should all be pretty grateful. The key decision in the case of both the banking crisis and the auto crisis was the decision that government needed to step in. Remember, there were people who argued that the market should work and capitalism should be allowed to function and government had no business investing in banks or saving banks or saving auto companies. The pressure to not intervene was particularly acute during the Bush administration.
I think is too often left out precisely because it does pose a tremendous challenge to the Democratic Establishment. Paul Romer Economist Did you get a chance to look at this looting paper? This is a couple of crises ago. In effect, what [economist George Akerlof and I] showed is that seemingly small weaknesses in your regulatory system can open up enormous risks, and enormous opportunities for private profit.
So what it tells you is that under-regulating or mis-regulating is much more dangerous than people generally accept.
A New Housing Bubble? Some Cities Might Already Be on the Cusp
Everybody disliked that paper. This is what worries me, people are kind of heading back to the pre-crisis worldview. Regulation is never perfect. You can always kind of complain about imperfections. You know, how much harm could it cause? Stephanie Kelton Economist The knock-on effects that arose as a consequence of failing to keep people in their homes impact everything from academic performance of the kids who were in those families to the health of the parents, the balance sheets, the credit scores. When you lose your home and you lose your job, the aftereffects that stay with you make it difficult for tens of millions of Americans to even take advantage of the policies that were designed to bring about a recovery.
Low interest rates, for example. Now you graduate and you enter into the labor market at the worst possible time in 35 years or whatever since the recession of the early s. The quarter-century leading up to the crash was a golden age not just of financial gambling but of gambling more generally. Until the election of Ronald Reagan in , playing the ponies or numbers had in many places been a vice and playing the slots a crime. Casinos and sports betting were banned everywhere but Nevada and Atlantic City.
By , gambling was a hundred-billion-dollar industry touching every state except Utah and Hawaii. Riverboat gambling was reestablished, especially in the Midwest. Indian tribes opened gambling resorts in 29 states. Vast regional and national lotteries flourished alongside state ones. Gambling was in the Spirit of the Age. But what did it actually mean? Partly it had to do with an erosion of character.
The rewards of capitalism had, in the public mind, come unbundled from the set of virtues once called the Protestant work ethic. Getting rich had as much to do with luck or effrontery as sustained effort. Partly it had to do with irresponsibility. Right up until the early fall of , many Americans had been comfortable with the notion that a well-functioning economy looked a good deal like a well-functioning casino. During the financial crisis, the most important lie that political elites told themselves was that they had no other option.
The crash was an act of creative destruction, and the once unimaginable is now the stuff of cable-news roundtables. On the left, Democrats are debating Medicare for all, tuition-free college, and a federal jobs guarantee. On the right, Fox News is fulminating over the deep state and conservative intellectuals are mainstreaming the case for repealing birthright citizenship.
All this is taking place while unemployment is hovering around 4 percent and economic growth is steady. Does anyone want to guess what will happen when the good times stop? If the difference between Mitt Romney and Barack Obama seemed vast in , imagine what will happen when the generation of Stephen Miller and Alexandria Ocasio-Cortez takes power.
For all their differences, Miller and Ocasio-Cortez both demonstrate the central lesson from the last decade of crisis: There is always another option. The question is whether we will choose a better one. But sometimes you only recognize something when you have a name for it.
How did we ever talk about the economy before? Kickstarter, GoFundMe, Patreon When did we give up hope that the market would provide us with the things we cherished most, from art to entrepreneurship to health care? In retrospect, the answer seems obvious. Bitcoin How could you even trust the Fed anymore? The older folks hoovered up gold, which basically doubled in value in the four years after the crash. Younger folks dove into cryptocurrency; bitcoin, the first, was registered as a domain in August The problem was, the recovery was also the slowest.
Occupy It felt like a revolution, for a minute at least. Trust in authorities and Establishment institutions was in decline well before the crash, but the crisis and its aftermath only accelerated the collapse of faith. Survivalism What do the elites do in the twilight?
Retreat to their end-of-the-world bunkers, behind their electrified fences, on their New Zealand estates. Gaming In , economist Erik Hurst proposed that so many young men were missing from the workforce because they were choosing to spend their days playing video games instead. Which was important, because the ambient anxiety takes a toll. Instagram Probably not an accident that the representative social-media platform of the past decade is powered by envy. The Death of News It began with Craigslist killing classified revenue, but the death of American newspapers rapidly accelerated after — the number of jobs in the industry falling from about , before the crash to well under , today.
The Sharing Economy Why own anything when you could just rent it? In an earlier era, this would not have seemed a wise question.
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Millennials As the decade has worn on, every single aspect of the generational stereotype — the narcissism, the self-salesmanship, the earnestness and the entrepreneurship — looks less like a feature of coddled youth and something more like its opposite: Pizzagate , QAnon , a president who might be a puppet. How did this happen? Iraq The country elected an antiwar president in , but what it got, instead, was an anti-recession one.
There are, of course, many ugly reasons that Americans began looking away from the wars being fought in their names after almost a decade of struggle, failure, and death overseas. But a crisis at home surely contributed, too. Joe the Plumber Yeah, that guy was definitely a worthy adversary to Obama on pocketbook issues. In Capital in the Twenty-First Century, he introduced a small equation, backed up by years of quantitative research, claiming to show exactly why global inequality was growing.
He demonstrated that as long as the return on capital r exceeded the growth rate of the economy g , the one percent would take more and more of the pie. SoundCloud Rap Despair has never been a bigger part of pop music than it is right now, and we have a generation of rappers for whom weed and coke have been replaced as mascot drugs by fear-numbing Xanax.
Artisanal Everything If the world came to an end, one could survive, particularly if one were a somewhat well-off young white person, by pickling everything in sight and retreating to simpler times. Mitch McConnell The belt-tightening extended to politics, too — and as a zero-sum perspective took over Congress, everything got very dog-eat-dog.
A win for one side became a loss for the other, which meant that, in a period of divided government, absolutely nothing would ever get done. Austerity In Europe, the word had a weaponized meaning: Bailout What you called government aid someone else got — the banks, the auto business, Fannie Mae and Freddie Mac. Modern monetary theory, a formulation of demand-side economics that suggests governments can print as much money as is necessary for expenditures and need to tax citizens only in order to keep inflation down, seemed closest, with its appealing contrarianism and promise of expansive government stimuli.
The 47 Percent Would anyone have believed, before the crash, that just about half the country was on the dole? Populism In Europe, centrist governments turned to austerity, which left victims of the crisis in even worse shape — in some cases — and created an opening for Trump-style extreme-right nativists. Alt-right What happens when the core ideology of the Western right fails on a global scale? You get an alternative: Also, for some reason, a cartoon frog called Pepe?
Was that how they were able to take over the White House? Apparently, the problem gets more acute when the economy crashes and the sexless become jobless, too. HGTV The metanarrative of every house-flipping show is that shiplap and a farm sink can restore the boom years, one foreclosure at a time. The App Store The ten years before were a remarkable period of tech development, culminating in the defining gadget of the 21st century, the iPhone. The End of Growth In , economist Robert Gordon proposed a radical rethinking of economic history: The rapid rise in standard of living between and may have been a historical anomaly, unprecedented and unlikely to ever be repeated.
My argument was true enough, that the recession had destroyed a certain model of manhood, made it obvious that for white working-class men it was becoming impossible to skip a college degree and live a comfortable middle-class life. But predicting cultural upheavals from economic shifts is always dicey. Would men and women really start to relate to each other differently?
Would American manhood collapse into a victim identity — and each private demise collect into a tornado of public rage? As economic forecasters will tell you, human beings tend to surprise. Homo americanus basically said screw that feminized bullshit — and resurrected a cartoon version of brute machismo with a twist of victimhood. In the corners of the internet where the new aggrieved men find solace, what flourishes is the stubborn logic of biological imperative: The only fix is for women to return to what they were intended for.
Periods of gender backlash always have the drama of war. Recently, women have brought down powerful men in ways that were unimaginable only a few years ago. And recently, men have wielded power around the world in ways that were unimaginable only a few years ago. I can more easily imagine a female president post-Trump than pre-. Their private experiences with the women in their lives have gotten folded into a readily available narrative about how modern womanhood has failed America. Women also had more college debt, held more subprime mortgages, and experienced higher levels of default and foreclosure.
Single-female-headed households have a net worth of about 32 cents for every dollar owned by single-male-headed households. Being a woman of color or a single mother in the recession meant you were even more likely to end up in poverty — with your kids, because women are usually the custodial parent. Of course, the silver lining of a backlash is what follows: A stunning 70 percent of millennial women identify or lean Democrat.
The whole thing of the financialization of Wall Street, of looking at people as pure commodities and of outsourcing and globalization, came from the business schools and the financial community that had these radical ideas, and nobody kept them in check. Go back and look at the postwar period. Companies forgot about the social fabric, forgot about your workers.
That led to the financial crisis of It all came home to roost. The elites save themselves. They just created money.
Soot and Ashes: The World AFTER the Crash
They flooded the zone with liquidity. You know why the deplorables are angry? We took away the risk for the wealthy. Look, you have socialism in this country for the very wealthy and for the very poor. And you have a brutal form of Darwinian capitalism for everybody else. Dude, this is fucked up.
The financial collapse talked about the rot at the heart of the system. And they all made it [about] Bernie Madoff. You have bad guys that scam people all the time in history. Obama came in and had the stimulus, almost a trillion dollars, and nobody knows where the money went. Where are my hospitals? You know, Robert Moses built shit. We spent a trillion dollars, do we just repave everything? It looks like the same place it was ten years ago. You know why the deplorables are pissed off?
The burden is on their shoulders. All blue-collar company guys, firemen, shit like that. As told to Noah Kulwin.
We did not do enough to help stave off foreclosure for some of the innocent victims of all this. Some of the people who faced foreclosure, it was their fault. They lied, and they overreached. But other people were misled, other people had reasonable expectations and then the market for their property dropped, and then there were other victims. It was bad for two reasons. One, the fact that we were bailing out the banks.
But it was exacerbated by the failure to do any serious foreclosure relief. It made me crazy. So you really did have both the tea party and Occupy grow up at the same time. The problem for us was that the tea-party people, as people on the right so often are, were very smart politically, and they organized and they registered and they voted. My, ah, sometime ideological allies at Occupy decided that the way to change things was to smoke dope and have drum circles. Neither one of those did a hell of a lot to influence my colleagues.
The tea party has changed part of its name: I mean, one of the most positive developments for me, politically, is that it took Trump to do it, but many people on the left now understand the importance of voting. But let me put it this way: To the extent that there are incremental changes, that they find loopholes, we think that the regulators have the power now to handle those. I was struck, recently, reading the economic report of the Federal Reserve. We have built honest stability into the financial system without any loss of function.
It would be hard to make that happen if you had ruined the financial system. As told to Nick Tabor. You could feel the desperation at the time. If the recession never really happened, where would I actually be? That being said, it did come at a cost: After it ended, I went around looking for work. But people who had the experience were dropping their rates. They were charging the same amount that I was, fresh out of school, but with more experience. We were, like, cannibalizing ourselves. As told to Rachel Bashein.
When Lehman Brothers failed on September 15, , I was a sophomore at the University of Maryland, and my fellow undergrads and I were petrified. What did this mean — would we ever be able to find jobs? It was the golden age of blogs, and my roommate and I cobbled together what happened by combing the web for experts we could trust and links to data about the derivatives market. I spent my first winter break at college going door-to-door in Iowa for the John Edwards presidential campaign.
He was the labor candidate, if you recall. I saw less and less worth saving in the status quo. When the first bailout vote failed on September 29 and the market dropped, I realized that was what I wanted. When the next vote succeeded, I no longer saw opposition parties, just two performers putting on a show. I voted for Hillary in Pennsylvania!
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If democracy under capitalism is but a stage play meant to justify rule by the rich, then ten years ago September I stopped suspending disbelief. In Europe, many countries were trying to solve the crisis through austerity — radical budget cuts that hurt the victims of the crisis even more. The Lancet found that suicides and disease rose as health budgets were slashed. For poorer countries in the EU, faraway structures like the European Central Bank dictated what national governments could spend.
Economies and democracy were in joint, precipitous decline. Centrist parties imposed unpopular austerity programs and slid in the polls, creating an opening for the rise of Trump-style extreme-right nativists with their own racist tweets and creative coiffure. Her father Jean-Marie was famous for his Holocaust denials. In Germany, the Alternative for Germany party, which advocates banning mosques, is now the largest opposition party in parliament.
Meanwhile, the centrist parties that remain cater to the right in order to hold on to power. Firefighter Leon Whitley, 34, climbed to the 15th floor of the burning Grenfell building despite fearing it could collapse like several of the World Trade Center buildings. According to the official version of events, flaming debris from the burning Twin Towers flew into the floor skyscraper — sparking blazes all over the building — until it finally came crashing down after seven hours.
The National Institute of Standards and Technology concluded that the heat generated by the infernos brought the tower down — making it the first and only steel skyscraper in the world to collapse because of fire. The Grenfell Tower engulfed by flames right. The WTC7 was on fire for less So London building burns for dozens of hours and never collapse but WTC 7 had small fires and was completely destroyed? Despite the fate of the WTC7, structural engineers quickly declared the Grenfell Tower was unlikely to collapse when it was engulfed in flames.
Experts from Kensington and Chelsea also predicted it was unlikely the storey tower that once housed up to people in apartments would fall down. Building in London was built much stronger, than twin towers didn't collapse after getting burnt completely! The apartment block was built in the early s at a time when strict new building regulations had come into effect to ensure high rises would not fall down in the event of a blast or major fire.
The regulations were introduced following a deadly gas explosion at the Ronan Point high-rise in East London. It marks the only time a block of flats in London has collapsed.