When the financial giant Lehman Brothers filed for bankruptcy protection on September 15, 2008, the United States had been in a recession for nearly a year.
Within days, the Chairman of the Federal Reserve was on Capitol Hill demanding $700 million to unstop the nation’s credit markets. America’s economic engine was frozen, thanks to a decade of deregulation and under-regulation that had led to the proliferation of “financial weapons of mass destruction,” as Warren Buffett called derivatives in 2002.
“U.S. household net worth plunged $16 trillion, or 24 percent, from third quarter 2007 to first quarter 2009,” the Federal Reserve Bank of Dallas noted recently in an assessment of the crisis. This means the typical family lost between $50,000 and $120,000.
An estimated 10 million Americans lost their homes, which is about the population of the state of Michigan.
Between January 2008 and February 2010, the economy lost nearly 8.8 million jobs. More than two years after the crisis had officially ended, more than 1.5 million people had been out of work for more than 99 weeks.
The costs of the crisis can be measured in trillions of dollars or millions of homes and jobs. But the human tragedy can also be counted in escalating suicides as well as painfully technocratic terms like “wasted human capital.”
Today, five years later, the situation is unquestionably improved. But the improvements have been too small, too limited, and too slow.
This can be blamed on the fact that recoveries after financial crises are typically less robust than after typical recessions and, of course, politics. Republicans argue that deficit spending has hurt the economy, but those assertions have been proven false by the even slower recovery in Europe, where the austerity Republicans advocated was put to the test. And though we did try stimulus to fuel the economy for the first two years of the Obama administration, much of the spending was cancelled out by cuts at the state and local levels. So in 2013 our economic situation is decidedly mixed as House Republicans threaten yet another debt crisis.
Here are five ways things have gotten better since the financial crisis began—and five ways they haven’t.