This week is the five year anniversary of the start of the one of the greatest financial crises the U.S. has ever experienced: The Great Recession.
Sept. 15 marked five years since financial firm Lehman Brothers, the fourth-largest investment bank in the U.S. at the time, filed for Chapter 11 bankruptcy. While several other companies also declared bankruptcy (and were bailed out by the government), Lehman was not. The panic and uncertainty that ensued in the banking industry, among many other factors, contributed to the start of the Great Recession.
Nationally, the economy lost 7.4 million jobs, while 1.2 million homes were foreclosed during a period of a few short years.
Long gone were the highs of the housing bubble and the presiding Internet bubble that skyrocketed the country into prosperity. In a matter of a few months, the U.S. was no longer a picturesque example of free-market capitalism with little government intervention.
All that was left was a country in shambles and a new president with the dream of “change” to pick up the pieces.
Since that fateful month in 2008, nearly 67 percent of jobs have been recovered in the aftermath of the recession. The unemployment rate as of August is teetering at 7.3 percent, and that figure remains the lowest level since the beginning of the Obama administration.
President Barack Obama and the current Congress continue to take strides to prevent such a crisis from occurring again; however, we still have a way to go.
The housing market across the country has been showing signs of life. Arizona in particular has been identified as the "comeback kid" of the housing market in the last year. This status was made evident by Obama’s remarks during his visit to Desert Vista High School in Ahwatukee last month.
“A home is the ultimate evidence that here in America, hard work pays off, that responsibility is rewarded,” Obama said to a crowd of students and Arizona politicians.
Large dirt lots laid untouched for years as a memorial to the recession throughout the Valley. Construction sites have resumed activity, and houses in the suburbs have begun sprouting up once more. Phoenix represents a snapshot of a trend across the nation.
However positive the prior steps appear, President Obama’s legacy in the second term should be dissolving the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association, also known as Freddie Mac and Fannie Mae, respectively.
Although not single-handedly responsible for the crisis five years ago, their role should not be underplayed. Fiscal responsibility was obsolete in the years leading up to the recession. Corporations like Fannie Mae and Freddie Mac took advantage of the free market and deregulation, causing millions of Americans to suffer.
Reform of these companies seems more trouble than completely obliterating them all together. The trust between the companies, the government and, most importantly, the American people is completely gone.
In the next few years, we should focus more on progressing as a nation and stop pointing fingers at the opposing political party. Little gets done without political consensus. After all, America’s prosperity is a common goal.
Ultimately, re-achieving the American Dream is the challenge set forth for Americans who hope to own their own houses and secure comfortable careers.
As we look to tomorrow, we should only have positive hopes for the direction of the state and the country.
As Bill Gates said, “It’s fine to celebrate success, but it is more important to heed the lessons of failure.”
Reach the columnist at jemeyer3@asu.edu
