After the Meltdown: 5 Years Later the Shocks Just as Powerful

Here come the polls. It's been five years since the meltdown and a whole bunch of us feel like things aren't getting any better.

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Five years after the collapse of Lehman Bros.—ground zero for the Great Recession—many Americans say things haven’t got much better. Yet we’ve clearly come a long way from the dark days that led to massive bailouts and soaring bankruptcies.

The stock market and home values have rebounded enough to boost Americans’ wealth by $16 trillion—the amount lost in the meltdown. The job market is recovering too.

But not all Americans are benefitting from the recovery, which began in 2009. According to a Country Financial survey:

  • Half of Americans feel less secure financially than they did five years ago and one in five feel about the same. Just 27% feel more financially secure.
  • Half of Americans feel the economy is worse than five years ago and one in five believe it is about the same. Just one in three believe the economy has improved.
  • The sting felt most sharply is the depletion of savings. Millions were forced to spend their savings in the downturn and did not have the assets in place to benefit from the market recovery. Most often cited as a lasting effect of the downturn: reduced retirement nest egg and exhausted emergency fund. Fewer than 10% cite lost home equity.

These sobering readings put a different spin on feel-good news about the recovery. Investor confidence has returned. Fidelity found that four in five clients who trade stocks regularly believe the market will be even or higher the rest of this year. But the Country Financial poll highlights how few Americans believe they will share in that expected bounty: Nearly half say they are still recovering from the recession and one in five say they will never recover. Four in five either don’t know or expect another recession in the next five years.

The most hopeful are Millennials, a generation that endured a difficult job market but also had few assets to lose in the downturn. As a group, young people seem to have taken the recession’s lessons to heart. In a survey of college freshmen with a credit card, C&R Research found that:

  • 69% pay their balance in full each month.
  • Less than 2% exceed their credit limit or pay less than the minimum due.
  • 60% have a formal budget for college expenses.

This is not the picture of spendthrift teens that we were so accustomed to seeing before the recession. Much has been made of the impact on Millennials, a generation larger than even the boomer generation and which will set the course of the economy for decades to come. They seem to be sticking with the concept of frugality and greater personal responsibility—and that might have something to do with why they are the most hopeful about their financial future.

5 comments
IMFunds
IMFunds

Higher outstanding credits increase the banking revenue to maintain the interest rates.

But the monetary policy depends on each different country's conditions like The Fed did.

InvestorAgenda
InvestorAgenda

From Investors: 

Higher tax Higher price as the result of market mechanism. 

More taxes More high prices in all sectors cause high inflation. 

See in indonesia, the government suffers the inflation itself weakening its rupiah.

It is because the government cannot manage their own assets because its low-quality labor. 

And the taxes will never make the fair capital distribution for whole sectors by governments only. 

Because all capital values are coming from the roots, resources & labor output activities so only public can make faster for jobs & the capital distribution not governments from the central top above that is slow, not efficient & corrupted by wrong authorities.

For example: 

If one man can employee at least one staff then 1 million people can make 1 million employees that is bigger & faster rather than government. So on the fair capital distribution for public can be done by public itself. The government just has to maintain it to guide it not to rob them by taxes. Banking system can help government to gather capitals from the roots. 

IMFunds
IMFunds

@InvestorAgenda

Higher outstanding credits increase the banking revenue to maintain the interest rates. But the monetary policy depends on each different country's conditions like The Fed did.

DarminN
DarminN

@InvestorAgenda 

Yep, but not to all countries. 

Because every country is different with different qualities. 

It is not just 1 million but 2 millions employed with the bosses themselves.

Your words can be translated: 

Pajak Naik Harga Barang juga ikut naik karena mekanisme pasar. 

Semakin banyak pajak semakin mahal harga barang disemua sektor akibat inflasi. 

Pemerintah menderita sendiri karena inflasi dan melemahnya nilai tukar rupiah.

Ini berawal dari pemerintah tidak mampu mengelola aset negara karena kualitas rendah SDM indonesia. 

Dan pajak tidak mungkin mampu membuat keadilan disemua sektor. 

Semua nilai kapital berasal dari akarnya, sumbernya, dan output tenaga kerja jadi hanya rakyat yang mampu membuat lebih banyak lapangan kerja & distribusi modal bukan pemerintah pusat karena lamban & tidak efisien akibat korupsi. 

Contoh: 

Jika 1 orang dapat memperkerjakan 1 orang maka 1 juta rakyat dapat membuat 1 juta lapangan kerja sehingga lebih besar, lebih cepat dari pemerintah. Keadilan distribusi modal untuk rakyat dapat dilakukan oleh rakyat sendiri. Pemerintah hanya bertugas membina dan menuntun bukan merampok melalui pajak. Sistem perbankan dapat menolong pemerintah untuk menghimpun modal dari masyarakat.

Darmin, 

humasbi@bi.go.id