2008 Recession Quotes

In Bakersfield, California, a Mexican strawberry picker with an income of $14,000 and no English was lent every penny he needed to buy a house for $724,000.

What are the odds that people will make smart decisions about money if they don’t need to make smart decisions—if they can get rich making dumb decisions?

The financial impact of the "housing crisis" and "Great Recession" (circa 2008-2012) has been well chronicled. But the human impact has been vastly under-reported.

Millennials bring a unique perspective to business. Those of us who were in college and entering adulthood and beginning our careers during the global recession that started in 2008 have a unique view on business and economics.

The Kochs were also directing millions of dollars into online education, and into teaching high school students, through a nonprofit that Charles devised called the Young Entrepreneurs Academy. The financially pressed Topeka school system, for instance, signed an agreement with the organization which taught students that, among other things, Franklin Roosevelt didn’t alleviate the Depression, minimum wage laws and public assistance hurt the poor, lower pay for women was not discriminatory, and the government, rather than business, caused the 2008 recession. The program, which was aimed at low-income areas, also paid students to take additional courses online.

The simple measure of sanity in housing prices, Zelman argued, was the ratio of median home price to income. Historically, in the United States, it ran around 3:1; by late 2004, it had risen nationally, to 4:1. “All these people were saying it was nearly as high in some other countries,” says Zelman. “But the problem wasn’t just that it was four to one. In Los Angeles it was ten to one and in Miami, eight-point-five to one.

To the extent that the world’s central banks limited the damage from the recession of 2008–2009, they helped to increase GDP and investment and therefore augmented the capital of the wealthy countries and of the world.

Americans built a culture of speculation unique in its abandon,” writes the historian Joshua Rothman in his book Flush Times and Fever Dreams. That culture would drive cotton production up to the Civil War, and it has been a defining characteristic of American capitalism ever since. It is the culture of acquiring wealth without work, growing at all costs, and abusing the powerless. It is the culture that brought us catastrophic downturns, like the Panic of 1837, the stock market crash of 1929, and the recession of 2008.

the first century of the US Federal Reserve’s existence has been a failure. Not only has there been incontinent inflation since 1913, the year the Fed came into existence (8 per cent in the preceding 120 years, 2,300 per cent in the succeeding hundred years), but there has been devastating deflation too, and more banking panics, more financial volatility, longer and deeper recessions. Even the Fed’s response to the crisis of 2008 has come under severe criticism, as it effectively bailed out bad assets while doing little to help solvent institutions with needed liquidity

Of course, President Obama was correct that there has been positive, meaningful social change in our lifetimes—certainly in the years since I was born in 1954—but if we focus specifically on the twenty-year period from 1997 to 2017, we must acknowledge some setbacks beyond just the stubborn persistence of neighborhood and school segregation. There are three I want to highlight here: the anti–affirmative action backlash of the late twentieth and early twenty-first centuries, the economic collapse of 2008 known as the Great Recession, and the phenomenon known as mass incarceration.

Note, however, the sharp correction in the Italian real estate market in 1994–1995 and the bursting of the Internet bubble in 2000–2001, which caused a particularly sharp drop in the capital/income ratio in the United States and Britain (though not as sharp as the drop in Japan ten years earlier). Note, too, that the subsequent US real estate and stock market boom continued until 2007, followed by a deep drop in the recession of 2008–2009. In two years, US private fortunes shrank from five to four years of national income, a drop of roughly the same size as the Japanese correction of 1991

If you’re asleep, you’re not spending money, so you’re not consuming anything. You’re not producing any products.” He explained that “during the last recession [in 2008]…they talked about global output going down by so many percent, and consumption going down. But if everybody were to spend [an] extra hour sleeping [as they did in the past], they wouldn’t be on Amazon. They wouldn’t be buying things.” If we went back to sleeping a healthy amount—if everyone did what I did in Provincetown—Charles said, “it would be an earthquake for our economic system, because our economic system has become dependent on sleep-depriving people. The attentional failures are just roadkill. That’s just the cost of doing business.

Shortly afterwards Addis Ababa launched a crackdown on its opponents that resulted in hundreds of deaths. If America’s president was in two minds about democracy, how was the rest of the world supposed to feel? It was on Obama’s watch that the tally of global democracies fell most sharply. The world now has twenty-five fewer democracies than it did at the turn of the century. In addition to Russia and Venezuela, Turkey, Thailand, Botswana and now Hungary are deemed to have crossed the threshold. According to Freedom House, more countries have restricted than expanded freedom every year since 2008.5 ‘There is not a single country on the African continent where democracy is firmly consolidated and secure,’ says Larry Diamond, one of the leading scholars of democracy.6 What we do not yet know is whether the world’s democratic recession will turn into a global depression.

But scamming large amounts of money off the top seems even harder to catch. Fraud by American defense contractors is estimated at around $100 billion per year, and they are relatively well behaved compared to the financial industry. The FBI reports that since the economic recession of 2008, securities and commodities fraud in the United States has gone up by more than 50 percent. In the decade prior, almost 90 percent of corporate fraud cases—insider trading, kickbacks and bribes, false accounting—implicated the company’s chief executive officer and/or chief financial officer. The recession, which was triggered by illegal and unwise banking practices, cost American shareholders several trillion dollars in stock value losses and is thought to have set the American economy back by a decade and a half. Total costs for the recession have been estimated to be as high as $14 trillion—or about $45,000 per citizen.

In 2008, an Australian company commissioned a study to find out exactly how much people fear public speaking. The survey of more than one thousand people found that 23 percent feared public speaking more than death itself! As Jerry Seinfeld once said, most people attending a funeral would rather be in the casket than delivering the eulogy! I can relate to those people because I feared speaking in front of a class or group of people more than anything else when I was a kid. In fact, I dropped speech in high school because when I signed up for it I thought it was a grammar class for an English credit. When I found out it actually required giving an oral presentation, I didn’t want any part of it! After hearing the overview of the class on the first day, I got out of my seat and walked toward the door; the teacher asked me where I was going. We had a brief meeting in the hall, in which she informed me that nobody ever dropped her class. After a meeting with the principal, I dropped the class, but on the condition that I might be called upon in the near future to use my hunting and fishing skills. I thought the principal was joking--until I was called upon later that year during duck season to pick ducks during recess! I looked at it as a fair trade.

Many models are constructed to account for regularly observed phenomena. By design, their direct implications are consistent with reality. But others are built up from first principles, using the profession’s preferred building blocks. They may be mathematically elegant and match up well with the prevailing modeling conventions of the day. However, this does not make them necessarily more useful, especially when their conclusions have a tenuous relationship with reality. Macroeconomists have been particularly prone to this problem. In recent decades they have put considerable effort into developing macro models that require sophisticated mathematical tools, populated by fully rational, infinitely lived individuals solving complicated dynamic optimization problems under uncertainty. These are models that are “microfounded,” in the profession’s parlance: The macro-level implications are derived from the behavior of individuals, rather than simply postulated. This is a good thing, in principle. For example, aggregate saving behavior derives from the optimization problem in which a representative consumer maximizes his consumption while adhering to a lifetime (intertemporal) budget constraint.† Keynesian models, by contrast, take a shortcut, assuming a fixed relationship between saving and national income. However, these models shed limited light on the classical questions of macroeconomics: Why are there economic booms and recessions? What generates unemployment? What roles can fiscal and monetary policy play in stabilizing the economy? In trying to render their models tractable, economists neglected many important aspects of the real world. In particular, they assumed away imperfections and frictions in markets for labor, capital, and goods. The ups and downs of the economy were ascribed to exogenous and vague “shocks” to technology and consumer preferences. The unemployed weren’t looking for jobs they couldn’t find; they represented a worker’s optimal trade-off between leisure and labor. Perhaps unsurprisingly, these models were poor forecasters of major macroeconomic variables such as inflation and growth.8 As long as the economy hummed along at a steady clip and unemployment was low, these shortcomings were not particularly evident. But their failures become more apparent and costly in the aftermath of the financial crisis of 2008–9. These newfangled models simply could not explain the magnitude and duration of the recession that followed. They needed, at the very least, to incorporate more realism about financial-market imperfections. Traditional Keynesian models, despite their lack of microfoundations, could explain how economies can get stuck with high unemployment and seemed more relevant than ever. Yet the advocates of the new models were reluctant to give up on them—not because these models did a better job of tracking reality, but because they were what models were supposed to look like. Their modeling strategy trumped the realism of conclusions. Economists’ attachment to particular modeling conventions—rational, forward-looking individuals, well-functioning markets, and so on—often leads them to overlook obvious conflicts with the world around them.

The one great exception to this pattern has been Poland, the region’s largest state. The country has weathered the recent global financial crisis exceptionally well and is the only European state that has avoided a recession since 2008. Benefiting from close integration with Germany, it has tried hard to be viewed as a leader of fiscally responsible northern Europe.

This problem was disguised for a time. Most Americans continued to buy as if their incomes had continued to rise. They did this by going deeply into debt. But when the debt bubble burst in 2008 the game was up. Without enough buyers, companies shed workers. The Great Recession began.

THIS IS A book about financial crises. It is about the events that bring them about. It is about why governments and markets respond as they do. And it is about the consequences.     It is about the Great Recession of 2008–09 and the Great Depression of 1929–1933, the two great financial crises of our age. That there are parallels between these episodes is well known, not least in policy circles. Many commentators have noted how conventional wisdom about the earlier episode, what is referred to as “the lessons of the Great Depression,” shaped the response to the events of 2008–09.

Indeed, neither the public clamor about the dislocations created by economic globalization nor the massive shocks produced by the financial crisis of 2008 and the ensuing Great Recession have derailed the process of international economic integration. It continues largely unabated, and the predictions of a protectionist surge prompted by the attempts of countries to fence in their economies to protect jobs have been proven wrong. International trade and investment flows continue to grow and to feed the forces that constrain the power of traditional business players.

The crash of 2008 ought to have thrown a bucket of cold water over the excited futurologists. Open societies suffered far more than closed regimes. A member of the Central Committee of the Chinese Communist Party was entitled to wonder why Americans were telling him he must allow free speech when China was booming and the First Amendment had not stopped debt-laden America going through a deep recession.

Larry Kudlow hosted a business talk show on CNBC and is a widely published pundit, but he got his start as an economist in the Reagan administration and later worked with Art Laffer, the economist whose theories were the cornerstone of Ronald Reagan’s economic policies. Kudlow’s one Big Idea is supply-side economics. When President George W. Bush followed the supply-side prescription by enacting substantial tax cuts, Kudlow was certain an economic boom of equal magnitude would follow. He dubbed it “the Bush boom.” Reality fell short: growth and job creation were positive but somewhat disappointing relative to the long-term average and particularly in comparison to that of the Clinton era, which began with a substantial tax hike. But Kudlow stuck to his guns and insisted, year after year, that the “Bush boom” was happening as forecast, even if commentators hadn’t noticed. He called it “the biggest story never told.” In December 2007, months after the first rumblings of the financial crisis had been felt, the economy looked shaky, and many observers worried a recession was coming, or had even arrived, Kudlow was optimistic. “There is no recession,” he wrote. “In fact, we are about to enter the seventh consecutive year of the Bush boom.”19 The National Bureau of Economic Research later designated December 2007 as the official start of the Great Recession of 2007–9. As the months passed, the economy weakened and worries grew, but Kudlow did not budge. There is no recession and there will be no recession, he insisted. When the White House said the same in April 2008, Kudlow wrote, “President George W. Bush may turn out to be the top economic forecaster in the country.”20 Through the spring and into summer, the economy worsened but Kudlow denied it. “We are in a mental recession, not an actual recession,”21 he wrote, a theme he kept repeating until September 15, when Lehman Brothers filed for bankruptcy, Wall Street was thrown into chaos, the global financial system froze, and people the world over felt like passengers in a plunging jet, eyes wide, fingers digging into armrests. How could Kudlow be so consistently wrong? Like all of us, hedgehog forecasters first see things from the tip-of-your-nose perspective. That’s natural enough. But the hedgehog also “knows one big thing,” the Big Idea he uses over and over when trying to figure out what will happen next. Think of that Big Idea like a pair of glasses that the hedgehog never takes off. The hedgehog sees everything through those glasses. And they aren’t ordinary glasses. They’re green-tinted glasses—like the glasses that visitors to the Emerald City were required to wear in L. Frank Baum’s The Wonderful Wizard of Oz. Now, wearing green-tinted glasses may sometimes be helpful, in that they accentuate something real that might otherwise be overlooked. Maybe there is just a trace of green in a tablecloth that a naked eye might miss, or a subtle shade of green in running water. But far more often, green-tinted glasses distort reality. Everywhere you look, you see green, whether it’s there or not. And very often, it’s not. The Emerald City wasn’t even emerald in the fable. People only thought it was because they were forced to wear green-tinted glasses! So the hedgehog’s one Big Idea doesn’t improve his foresight. It distorts it. And more information doesn’t help because it’s all seen through the same tinted glasses. It may increase the hedgehog’s confidence, but not his accuracy. That’s a bad combination.

Westerners live in a complex society, and opportunities for scamming relatively small amounts of money off the bottom are almost endless—and very hard to catch. But scamming large amounts of money off the top seems even harder to catch. Fraud by American defense contractors is estimated at around $100 billion per year, and they are relatively well behaved compared to the financial industry. The FBI reports that since the economic recession of 2008, securities and commodities fraud in the United States has gone up by more than 50 percent. In the decade prior, almost 90 percent of corporate fraud cases—insider trading, kickbacks and bribes, false accounting—implicated the company’s chief executive officer and/or chief financial officer. The recession, which was triggered by illegal and unwise banking practices, cost American shareholders several trillion dollars in stock value losses and is thought to have set the American economy back by a decade and a half. Total costs for the recession have been estimated to be as high as $14 trillion—or about $45,000 per citizen. Most

The Kochs were also directing millions of dollars into online education, and into teaching high school students, through a nonprofit that Charles devised called the Young Entrepreneurs Academy. The financially pressed Topeka school system, for instance, signed an agreement with the organization which taught students that, among other things, Franklin Roosevelt didn’t alleviate the Depression, minimum wage laws and public assistance hurt the poor, lower pay for women was not discriminatory, and the government, rather than business, caused the 2008 recession.

I had felt compelled to write this letter because we had emerged from the Great Recession of 2008 in great shape, outpacing our peers and also Honeywell’s historical performance during recessions. While the experience was still fresh, I wanted to capture my reflections on how we had done it, in the hopes that my successors would have an easier time dealing with similar situations in the future and wouldn’t have to waste time learning what we’d learned. If you haven’t written such postmortem analyses (or white papers, as we called them) for your organization, I strongly suggest it. As we saw in chapter 1, intellectual rigor is vital for organizations seeking to perform well today and tomorrow, and leaders are uniquely positioned to establish and maintain that rigor.

It’s particularly important in this vein to note the extent to which economic expectations can be self-fulfilling. If people (and companies) believe the future will be good, they’ll spend more and invest more . . . and the future will be good, and vice versa. It’s my belief that most companies concluded that the Crisis of 2008 wouldn’t be followed by a V-shaped recovery, as had been the rule in the last few recessions. Thus they declined to expand factories or workforces, and the resulting recovery was modest and gradual in the U.S. (and even more anemic elsewhere).

As a result, tax revenues and state budgets shrink, at least in relative terms per capita. National debt inevitably grows in order to at least partially cover the shortfall. Of course, it grew enormously after governments bailed out the banks in the wake of the financial crash. The British government did so to the tune of 136.6bn and has admitted that it will never recoup at least £27bn of that amount. In the US the bailout cost at least $14.4 trillion.[56] At the start of of 2019, the US’s national debt stood at nearly $22 trillion, having increased by 10% since Trump took office two years earlier. Under his predecessor Barack Obama, the national debt increased 100%, from $10 trillion to $20 trillion. National debt has to be repaid to the government’s creditors: bondholders, ie people, companies and foreign governments; international organisations such as the World Bank; and private financial institutions. If debt is not or cannot be repaid it becomes increasingly difficult to attract creditors. US national debt when the Great Depression kicked off stood at 16% of GDP and rose to 44% when the depression ended at the end of World War Two. Before the The Great Recession it stood at 65% and by 2013 had exploded to over 100%.[57] Gross national debt and household debt have been at record highs at the same time for the first time ever. Austerity, the socialisation of national debt, therefore becomes an economic necessity, not simply an unfair and immoral ‘political choice’, as is claimed by democratic socialists. That public spending as a share of national income in Britain in 2017 (39.6%) was at the same level as in 2007 (39.6%) after seven years of debt servicing via savage cuts to state welfare and public services suggests national income must have fallen per capita. Indeed, official forecasts suggest that GDP per adult in 2022 will be 18% lower than it would have been had it grown by 2% a year since 2008 – it has averaged 1.1% – broadly the expected rate of growth at that time.

Since The Great Recession, the global financial crash of 2008-09, the debt-fuelled post-recession recovery has been the weakest in the post-war era (since the end of World War Two). Whereas total outstanding credit in the US after the Wall Street Crash grew from 160% to 260% of GDP between 1929 and 1932, the figure rose from 365% in 2008 to 540% in 2010. (And this does not include derivatives, whose nominal outstanding value is at least four times GDP).[34] A long depression and rising right-wing populism have followed, including the stunning ascendency of property tycoon and TV celebrity demagogue Donald Trump as the President of the US in 2016.[35] The British public’s vote in June 2016 to leave the EU delivered another shock of global significance. A chronic drift towards trade wars and protectionism is accelerating and in January 2018, US Defence Secretary Jim Mattis said that “great power competition, not terrorism, is now the primary focus of US national security”, putting Russia, China and – yes – Europe in the crosshairs of the world’s long-time dominant economic and military power. Adding to this age of anxiety is the accelerating automation revolution. What should be an emancipatory and utopian development only generates insecurity at the prospect of unprecedented mass unemployment. It can be no coincidence that all these crises are converging at exactly the same time. They cannot be explained away by cynical and shallow generalisations about ‘human nature’. In the course of this investigation we will see that in fact all of these crises have a common root cause: the decaying nature of capitalism and its tendency towards breakdown. Indeed, average Gross Domestic Product (GDP) growth rates in the world’s richest countries have fallen in every decade since the 1960s and are clearly closing in on zero. Rates of profit, manufacturing costs and commodity prices are also trending towards zero. Drawing on Henryk Grossman’s vital clarification of Karl Marx’s methodology, we shall see that capitalism is heading inexorably towards a final, insurmountable breakdown that is destined to strike much earlier than a zero rate of profit. Indeed, we shall also see that the next, imminent economic crash will result in worldwide hyperinflation. We will also show that the economic crisis is intensifying competition between nation-states, forcing them into a situation which threatens the most destructive world war to date.

While relatively safe during most economic periods, corporate bonds become a far riskier asset in recessionary periods, perhaps most notably demonstrated during the Great Recession of 2008 and 2009.

In 2036, the USA elected an over-the-top, unapologetic fundamentalist president named Andrew Handel. Yes, that Handel. During his term, he tried to ban election of non-Christians to any public post, and tried to remove the constitutional separation between church and state. He was nominated, supported, and elected based on his religious views, rather than on his political or fiscal expertise. And of course, he appointed persons of similar persuasion to every post he could manage, in some cases blatantly ignoring laws and procedures. He and his cronies rammed through far-right policies with no thought for consequences. In a number of cases, when challenged on the results, he declared that God would not allow their just cause to fail. He eventually brought the USA to its knees in an economic collapse that made the 2008 recession look like a picnic in the park.

A WHILE BACK, a game designer friend of mine named Phil Fish made a plea on Twitter, “Hey bloggers, no more ‘blank rebuilt in Minecraft’ posts, please. We get it. You can make things in Minecraft. Thanks.” Fish was referring to the popular online game Minecraft, in which players hunt for resources that are used to construct models and apparatuses with the game’s characteristic, cubical visual style. The Internet being what it is, given such tools extreme fans do insane things, like elaborately reconstructing the city King’s Landing from Game of Thrones using nothing but this square matter mined from Minecraft. Seeing Fish’s tweet, an enterprising ironoiac recreated the form of the embedded tweet itself inside Minecraft, a fact that the tech blog VentureBeat then dutifully blogged about, thus completing not one but two cycles of an ironoia self-treatment the environmental philosopher Timothy Morton names “anything you can do I can do meta.”14 In a futile attempt to prevent further metastasis, the blogger concluded his post with the line, “Yes, we’re fully aware of the irony of this post.”15 But rather than satisfying anyone, such a provocation only further irritated the ironoiac itch. Fish tweeted a link to the blog post covering the Minecraft construction of a model of Fish’s tweet protesting blog posts about Minecraft constructions, which one of his followers one-upped by observing the fact that Fish had in fact “tweeted about somebody blogging about somebody making [his] tweet about Minecraft in Minecraft.” Another chimed in, “How long ’til someone recreates that blog post in Minecraft?” Each step represents an attempt to overcome the absurdity of the last by fixing it in a new voice, even though each ironic gesture was evanescent, quickly replaced by yet another layer of buffer from yet another desperate ironoiac. Why do we do it, then? Today, satisfaction is more elusive than ever. In part, the precarity of life after the 2008 global financial collapse and the Great Recession that followed it (and whose effects still linger) makes every transaction with the world feel suspect and risky. We fear that things might turn on us, because we have good evidence that they can, and do. But

during the 2008 crisis, corporate welfare reached new heights. In the great bailout of the Great Recession, one corporation alone, AIG, got more than $180 billion—more than was spent on welfare to the poor from 1990 to 2006.68 As

In late 2008, one of my business partners, Clayton Christensen offered his opinion that the recession would have an “unmitigated positive impact on innovation” because “when the tension is greatest and resources are most limited, people are actually a lot more open to rethinking the fundamental way they do business.” This theory is supported by the Kaufmann Foundation statistic that “51 percent of the Fortune 500 companies began during a recession or bear market or both.” Whether launching a business or pursuing a dream, there are many high-profile instances in which a lack of resources ultimately proved to be a boon, rather than a bane. If we dig a bit, each of us can uncover examples among friends and family, and ourselves. Would most children have as many opportunities as they do in sports, music, or other extracurricular activities without parents, mothers in particular, who are accomplished at bartering as a way to stretch limited family budgets? Would kids have as many chances to explore their interests if their parents weren’t so adept at arranging for carpooling, chaperoning, and borrowing, thus enabling their kids to participate? Without the constraints of time, money, and health, would the online retailer Shabby Apple exist? (For a reminder of how that business came to be, see chapter 5.) If my parents could have paid for college, would I have caught an early glimpse of corporate life during the Silicon Valley heyday? Would I have ever set foot on Wall Street had I not needed to work to put my husband through school? All of us have had the opportunity to bootstrap if we look hard enough. Men seem to know how to do this in the business world: 88 percent of the founders of Entrepreneur magazine’s Hot 500 were men. But I wonder if women aren’t better at bootstrapping than we think we are. Chronically under resourced (whether due to the gender pay gap or ceding our resources to conform to societal expectations), women continually feel the tension of having too little budget and too little time. Because of this tension, we are expert at rethinking how to get things done. Many of us know how to turn scarcity into opportunity.

Algorithmic profits Algorithmic marketing is allowing companies to do things they couldn’t do before, and some early signs show it can deliver big value, especially in financial or information services. In North America, Amazon.com grew 30 to 40 percent, quarter after quarter, throughout the United States’ 2008-2012 recession, while other major retailers shrank or went out of business. From 2006 to 2010, Amazon spent 5.6 percent of its sales revenue on IT, while rivals Target and Best Buy spent 1.3% and 0.5%, respectively. That investment and focus has yielded increasingly sophisticated recommendation engines that deliver over 35 percent of all sales, an automated e-mail/customer service systems (90 percent are automated, versus 44 percent for the average retailer) that are a key component of its best-in-class customer satisfaction, and dynamic pricing systems that crawl the Web and react to competitor pricing and stock levels by altering prices on Amazon.com, in some cases every 15 seconds.

The 2008–2009 Great Recession also sent U.S. auto sales plunging from nearly 17 million in 2005 to 10.4 million in 2009, helping push the U.S. industry to the brink of collapse.

But scamming large amounts of money off the top seems even harder to catch. Fraud by American defense contractors is estimated at around $100 billion per year, and they are relatively well behaved compared to the financial industry. The FBI reports that since the economic recession of 2008, securities and commodities fraud in the United States has gone up by more than 50 percent. In the decade prior, almost 90 percent of corporate fraud cases—insider trading, kickbacks and bribes, false accounting—implicated the company’s chief executive officer and/or chief financial officer. The recession, which was triggered by illegal and unwise banking practices, cost American shareholders several trillion dollars in stock value losses and is thought to have set the American economy back by a decade and a half. Total costs for the recession have been estimated to be as high as $14 trillion—or about $45,000 per citizen. Most tribal and subsistence-level societies would inflict severe punishments on anyone who caused that kind of damage.

In 2009, an American soldier named Bowe Bergdahl slipped through a gap in the concertina wire at his combat outpost in southern Afghanistan and walked off into the night. He was quickly captured by a Taliban patrol, and his absence triggered a massive search by the US military that put thousands of his fellow soldiers at risk. The level of betrayal felt by soldiers was so extreme that many called for Bergdahl to be tried for treason when he was repatriated five years later. Technically his crime was not treason, so the US military charged him with desertion of his post—a violation that still carries a maximum penalty of death. The collective outrage at Sergeant Bergdahl was based on very limited knowledge but provides a perfect example of the kind of tribal ethos that every group—or country—deploys in order to remain unified and committed to itself. If anything, though, the outrage in the United States may not be broad enough. Bergdahl put a huge number of people at risk and may have caused the deaths of up to six soldiers. But in purely objective terms, he caused his country far less harm than the financial collapse of 2008, when bankers gambled trillions of dollars of taxpayer money on blatantly fraudulent mortgages. These crimes were committed while hundreds of thousands of Americans were fighting and dying in wars overseas. Almost 9 million people lost their jobs during the financial crisis, 5 million families lost their homes, and the unemployment rate doubled to around 10 percent. For nearly a century, the national suicide rate has almost exactly mirrored the unemployment rate, and after the financial collapse, America’s suicide rate increased by nearly 5 percent. In an article published in 2012 in The Lancet, epidemiologists who study suicide estimated that the recession cost almost 5,000 additional American lives during the first two years—disproportionately among middle-aged white men. That is close to the nation’s losses in the Iraq and Afghan wars combined. If Sergeant Bergdahl betrayed his country—and that’s not a hard case to make—surely the bankers and traders who caused the financial collapse did as well. And yet they didn’t provoke nearly the kind of outcry that Bergdahl did. Not a single high-level CEO has even been charged in connection with the financial collapse, much less been convicted and sent to prison, and most of them went on to receive huge year-end bonuses. Joseph Cassano of AIG Financial Products—known as “Mr. Credit-Default Swap”—led a unit that required a $99 billion bailout while simultaneously distributing $1.5 billion in year-end bonuses to his employees—including $34 million to himself. Robert Rubin of Citibank received a $10 million bonus in 2008 while serving on the board of directors of a company that required $63 billion in federal funds to keep from failing. Lower down the pay scale, more than 5,000 Wall Street traders received bonuses of $1 million or more despite working for nine of the financial firms that received the most bailout money from the US goverment.

The top 1 percent now own around half of the world’s wealth, up from 42.5 percent at the height of the Great Recession in 2008. The world’s 3.5 billion poorest adults, comprising 70 percent of the world’s working-age population, own 2.7 percent of global wealth.

Millennials used job hopping to improve their income with every move in order to compensate for the initial low pay they accepted when joining the workforce during the 2008 recession. This acts as a caution to employers who are seeking to incorporate Gen Z into the workforce in what is expected to be a recessionary period after COVID-19. Companies should carefully consider whether compromising entry-level compensation in the short term is worth it, considering the potential benefit of gaining Gen Z’s long-term loyalty. Gen Zers are eager to stay longer in the organization. If we find ways to make it work for them by meeting their expectations, it will be a win-win.

We are headed for a much morse financial crisis than the one we experienced in '08 [2008] and we are headed for a much greater recession than we lived through following that crisis; the one we called the Great Recession. And what's going to make it so much worse is, it's going to be inflationary. Consumer prices are gonna be going up as the economyis going down.

This is an especially important question to ask at the present time, as I write this book more than six years since the start of the dramatic recession of 2008. This recession has not only devastated the world economy, but it has contributed to a regression in the very behaviors of bias I have discussed thus far. There is no real surprise here, as history has shown us time and again that economic stress creates a greater sense of threat and fear of “the other.” On a societal scale, hate crimes go up when the economy goes down. On a global scale, dictatorial and fascist regimes are almost always preceded by economic upheaval, whether it is Hitler in Germany, Mussolini in Italy, Franco in Spain, or the Taliban in Afghanistan. These kinds of movements have almost always focused on identifying an “other” who has to be controlled, dethroned, or annihilated.

In the Global Financial Crisis of 2008, it seemed at first that Europe could dodge the blow that was hitting the United States. The unspoken reality was that in the 6 months after September 2008 European governments had to quietly spend 3 trillion dollars to bail out their troubled banks. In the case of the periphery countries, the main problem came from the abrupt departure of capital that up till then had been flowing in abundance to finance expansion plans. In the case of the strong countries’ banks, the travails came from their excessive exposure to sub-prime investments. The ensuing recession, plus the effort to rescue the banks, put several countries in a vulnerable situation. This was more apparent after the financial markets became jittery on discovering the magnitude of the Greek problem.

While Germany applied wage restraint, fiscal austerity and saving, southern Europe embarked on an aggressive expansion, largely financed through the recycling of the German external current account surplus by German banks. When the tide turned in 2008 and German financing was abruptly withdrawn, the debtor countries of the periphery went into recession and fiscal difficulty. By this time, Germany had already consolidated its position in emerging markets as an exporter of high-tech goods, allowing her to ride the Global Financial Crisis with barely a scratch.

Stock buy‐backs – companies using cash from their balance sheets to purchase their stock in the open market for the purpose of retiring that stock and increasing their earnings per share – hit an all‐time high in 2018, with over $800 billion spent on such efforts. That was an increase of over 50 percent from the prior year and represented the most extensive annual stock buy‐back total ever recorded (the previous record was 2007, just before the Great Recession of 2008–2009). Contrast that to more traditional R&D investing that increased at a much more modest 8.8 percent that same year.20 When given the choice of where to invest the additional dollars generated from paying lower taxes, companies chose to invest in boosting their stock price, not in their businesses' future development or in their communities.

MANY STUDIES POINT TO recent historical events to explain today’s turn away from democracy, like the 2008 recession and increases in global migration that heightened racist sentiments. Other works go back to the collapse of Communism in 1989–1990. Unleashing nationalist and tribalist sentiments in Eastern Europe, it encouraged the resurgence of the far right in Western Europe as well. Putin, the former Communist functionary who is now a leader of the global right, successfully rode that tide of political upheaval and ideological transformation

it became a truly deep recession only after the panic reached its peak, in September and October 2008.

The economic lessons of the Great Depression haven’t been totally forgotten. The economic recession of 2008 served as a painful reminder. Unlike 1929, the government, another Republican administration ironically, acted swiftly to stave off a total collapse. While the economy slowed down dramatically in 2008, it never approached the dire situation of the 1930s. The Great Depression still looms large in the American consciousness. As debates over tariffs and restructuring Social Security continue to rise, let’s hope that the Great Depression still affects thinking and policy in the future.

After the Big Recession of 2008, many Americans found themselves without jobs, homes, and savings. We realized that we really can’t rely on our 401k’s to keep us safe. It’s up to us to achieve financial freedom for ourselves. And home-based businesses is the way to go.

Despite the recession in 2008, Tesco increased their advertising spend by 18.8% to $125 million, and they weren’t alone. Asda increased theirs by 52%, Sainsbury’s by 21.3% and Morrisons by 15%. But even with recessionary budget cuts from manufacturers, the retailers were still outspent by Unilever, who had an advertising budget of $235 million in 2008 (up $4.8 million from 2007) and Procter & Gamble (P&G), with an advertising budget of $231 million (down $25.5 million from 2007), but spread across many brands. In

This is another paradox of our era: as native-born people find themselves surrounded by foreign-born people, they become less likely to explore our own country or the world. They become homebodies. The proportion of young adults living at home nearly doubled between 1980 and 2008, before the Great Recession hit, and the trend continues to creep upward.

Although political representation by racial quota is the effect of government policy, it is not yet respectable to call for it explicitly. When President Bill Clinton tried to appoint Lani Guinier as Assistant Attorney General for Civil Rights her appointment failed, in part because of Miss Guinier’s advocacy of representation by race. In her view, if blacks were 13 percent of the US population, 13 percent of seats in Congress should be set aside for them. It does not cause much comment, however, when the Democratic Party applies this thinking to its selection of delegates to presidential conventions. Each state party files an affirmative action plan with the national party, and many states set quotas. For the 2008 Democratic Convention, California mandated an over-representation of non-white delegates. Blacks, Asians, and Hispanics were only 4.6, 5.2, and 21.1 percent, respectively, of the Democratic electorate, but had to be 16, 9, and 26 percent of the delegates. Other states had similar quotas. Procedures of this kind do lead to diversity of delegates but suggest that race is more important than policy. Perhaps it is. In Cincinnati, where blacks are 40 to 45 percent of the population, Mayor Charlie Luken complained that the interests of blacks and whites seemed so permanently in conflict that “race gets injected into every discussion as a result.” In other words, any issue can become racial. In 2004, the Georgia legislature passed a bill to stop fraud by requiring voters to show a state-issued ID at the polls. People without drivers’ licenses could apply for an ID for a nominal fee. Black legislators felt so strongly that this was an attempt to limit the black vote that they did not merely vote against the law; practically the entire black delegation stormed out of the Capitol when the measure passed over their objections. In 2009, when Congress voted a stimulus bill to get the economy out of recession, some governors considered refusing some federal funds because there were too many strings attached. Jim Clyburn, a black South Carolina congressman and House Majority Whip, complained that rejecting any funding would be a “slap in the face of African-Americans.” Race divides Cook County, Illinois, which contains Chicago. In 2007, when the black president of the county board, Todd Stroger, could not get his budget passed, his floor leader William Beavers-also black—complained that it was “because he’s black.” He said there was only one real question: 'Who’s gonna control the county—white or black—that’s all this is.

By 2008, storm clouds were gathering over Microsoft. PC shipments, the financial lifeblood of Microsoft, had leveled off. Meanwhile sales of Apple and Google smartphones and tablets were on the rise, producing growing revenues from search and online advertising that Microsoft hadn’t matched. Meanwhile, Amazon had quietly launched Amazon Web Services (AWS), establishing itself for years to come as a leader in the lucrative, rapidly growing cloud services business. The logic behind the advent of the cloud was simple and compelling. The PC Revolution of the 1980s, led by Microsoft, Intel, Apple, and others, had made computing accessible to homes and offices around the world. The 1990s had ushered in the client/server era to meet the needs of millions of users who wanted to share data over networks rather than on floppy disks. But the cost of maintaining servers in an ever-growing sea of data—and the advent of businesses like Amazon, Office 365, Google, and Facebook—simply outpaced the ability for servers to keep up. The emergence of cloud services fundamentally shifted the economics of computing. It standardized and pooled computing resources and automated maintenance tasks once done manually. It allowed for elastic scaling up or down on a self-service, pay-as-you-go basis. Cloud providers invested in enormous data ​centers around the world and then rented them out at a lower cost per user. This was the Cloud Revolution. Amazon was one of the first to cash in with AWS. They figured out early on that the same cloud infrastructure they used to sell books, movies, and other retail items could be rented, like a time-share, to other businesses and startups at a much lower price than it would take for each company to build its own cloud. By June 2008, Amazon already had 180,000 developers building applications and services for their cloud platform. Microsoft did not yet have a commercially viable cloud platform. All of this spelled trouble for Microsoft. Even before the Great Recession of 2008, our stock had begun a downward slide. In a long-planned move, Bill Gates left the company that year to focus on the Bill & Melinda Gates Foundation. But others were leaving, too. Among them, Kevin Johnson, president of the Windows and online services business, announced he would leave to become CEO of Juniper Networks. In their letter to shareholders that year, Bill and Steve Ballmer noted that Ray Ozzie, creator of Lotus Notes, had been named the company’s new Chief Software Architect (Bill’s old title), reflecting the fact that a new generation of leaders was stepping up in areas like online advertising and search. There was no mention of the cloud in that year’s shareholder letter, but, to his credit, Steve had a game plan and a wider view of the playing field.

The Federal Reserve is not currently forecasting a recession. Ben Bernanke 
January 10, 2008