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Great Recession

global economic decline around the end of the first decade of the 21st century

The Great Recession was a period of general economic decline observed in world markets during the late 2000s and early 2010s. The scale and timing of the recession varied from country to country. In terms of overall impact, the International Monetary Fund concluded that it was the worst global recession since World War II, and would remain so until the COVID-19 recession. According to the US National Bureau of Economic Research (the official arbiter of US recessions) the recession, as experienced in that country, began in December 2007 and ended in June 2009, thus extending over 19 months. The Great Recession was related to the financial crisis of 2007–08 and U.S. subprime mortgage crisis of 2007–09. The Great Recession has resulted in the scarcity of valuable assets in the market economy and the collapse of the financial sector in the world economy.

Quotes

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  • I believe we need to do more to help young people, who are left behind in the wake of the Great Recession, find those strategies and opportunities that will get them moving ahead again. And we’ve got to help older Americans who’ve displaced by automation and outsourcing in our changing economy.
  • Let's stop for a second and remember where we were eight years ago. We had the worst financial crisis, the Great Recession, the worst since the 1930s. That was in large part because of tax policies that slashed taxes on the wealthy, failed to invest in the middle class, took their eyes off of Wall Street, and created a perfect storm. In fact, Donald (Trump) was one of the people who rooted for the housing crisis. He said, back in 2006, "Gee, I hope it does collapse, because then I can go in and buy some and make some money." Well, it did collapse. ... We have come back from that abyss. And it has not been easy. So we're now on the precipice of having a potentially much better economy, but the last thing we need to do is to go back to the policies that failed us in the first place.
  • The final Treaty of Lisbon was signed in 2007, with virtually no concessions to subsidiary nationalism, its authors blind to any incipient resentment it might breed. A year later, Europe and America experienced the most traumatic financial crash since 1929. In Europe the chief impact was on the weaker states of the EU, notably those of southern Europe. The eurozone’s German-controlled European Central Bank (ECB) looked immediately to the security of Germany’s overseas loans, including those to the zone’s weaker members. Though the ECB was impressively ready to print money–there was no repetition of the squeeze of 1929–the liquidity went to German (and other) banks rather than to member states or their citizens. Extreme austerity was forced on Greece, Spain and Italy, with levels of unemployment that rose to twenty-five per cent of the working population. In Spain, half of all young people became unemployed. Nothing could have more boosted a re-emergent European nationalism, or more damaged the cause of closer union.
    • Simon Jenkins, A Short History of Europe: From Pericles to Putin (2018)
  • The massive costs of running the war on terror, in conjunction with the seemingly inexorable turn to a non-state-based credit rather than a savings-based economy, were among the factors that led to the second major challenge of the new millennium: the financial crisis, and its long corrosive aftermath of the Great Recession. Society was no riven by a biting austerity on one hand and an anti-immigrant backlash on the other.  Governments used up what remaining reserves of popular trust they had in fighting the fires of a seemingly unquenchable crisis.  Fatefully, this was also the moment when Europe was confronted by the largest refugee crisis since the Second World War (many of them fleeing the havoc unleashed by the global war on terror).  The social tensions sparked by some of these developments began to raise the specter of more desperate solutions drawn from the past.  Alarmed by such developments, one ninety-year old survivor of the Warsaw ghetto took a plea of remembrance to the international press. Fear and lies are terrible things, he warned: “do not ever imagine that your world cannot collapse, as ours did.” Was anyone listening?  In Europe, the solidarity that had underpinned the European Union’s expansion for half a century entered its gravest crisis yet. In the US, the political atmosphere grew more, not less, tense under the nation’s first black president.  With public trust in the workings of Congress at its lowest ebb, and popular discontents soaring amid an illiberal surge, the conditions favored an outsider in the presidential elections of 2016.  What that outsider might then do only time, and power, would tell.
    • Simon Reid-Henry, Empire of Democracy: The Remaking of the West Since the Cold War, 1971-2017 (2019), pp. 7-8
  • It remains to be seen what the effect of the Great Recession will be on resistance to globalization. It seems clear, however, that if the recession grows deeper and extends over a long period of time, it will spur much greater resistance to globalization.
    • George Ritzer, Globalization - A Basic Text Chapter 16, Dealing with, Resisting, and the Futures of Globalization, p. 499 (2010)
  • Before the disastrous economic and political events of 2008–9, it was possible to blithely assume that we had left the brutal and unpredictable world of the 1930s behind us. However, just as the economic crisis of 1929–31 summoned up the demons described in this book, so our own time’s economic and social problems – excessive national and private debt, globalization leading to unemployment and low wages for the majority but high profits for the few, and uncontrolled mass movements of populations – have led to similarly destabilizing and demoralizing developments in Europe, America, and parts of Asia. At the same time, large-scale abuse of data, accompanied by manipulation of online information and social media, has placed persuasive power into the hands of twenty-first-century authoritarian disrupters to an extent that their predecessors in the 1930s could only have dreamt of.
    • Frederick Taylor, 1939: A People's History (2020)
  • The contention of this book is that to view the 2008 crisis and its aftermath chiefly through its impact on America is to fundamentally misunderstand and underestimate its economic and historical significance. Ground zero was America’s housing market, for sure. Millions of American households were among those hit earliest and hardest. But that disaster was not the crisis that had been widely anticipated before 2008, namely, a crisis of the American state and its public finances. The risk of the Chinese-American meltdown, which so many feared, was contained. Instead, it was a financial crisis triggered by the humdrum market for American real estate that threatened the world economy. The crisis spilled far beyond America. It shook the financial systems of some of the most advanced economies in the world—the City of London, East Asia, Eastern Europe and Russia. And it went on doing so. Contrary to the narrative popular on both sides of the Atlantic, the eurozone crisis is not a separate and distinct event, but follows directly from the shock of 2008. The redescription of the crisis as one internal to the eurozone and centered on the politics of public debt was itself an act of politics. In the years after 2010, it would become the object of something akin to a transatlantic culture war in economic policy, a minefield that any history of the epoch must carefully navigate.
    • Adam Tooze Crashed: How a Decade of Financial Crises Changed the World (2018)
  • I felt I wanted to talk about the Fed’s mission, and I wanted to do so in understandable terms, and to emphasize that unemployment is part of our mission. The recession has taken a particularly heavy toll on those who have less education and income—middle-income and low-income families—and the Fed’s concern with the job market is a theme I’ve wanted to get across. Why are we doing all these things that are in the newspapers all the time? I was trying to explain that we’re doing this to help American families who are struggling in the aftermath of the Great Recession.

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