Times West Virginian
Five years ago, in the midst of a presidential election year, the nation was dealing with a financial collapse.
Investment bank Lehman Brothers filed for bankruptcy on Sept. 15, 2008. It had bet heavily on mortgage-backed securities during a housing bubble that saw home values soar. Lending standards and government policies that promoted homeownership, though, allowed millions of people unaffordable mortgages, and Wall Street was adversely affected when defaults ensued.
As The New York Times reported, “The Lehman bankruptcy caused the credit markets to seize up, the unemployment rate to soar and economic activity to plummet.”
Hundreds of thousands of job across the United States were being lost each month. The unemployment rate for the country hit 10.1 percent in 2009.
The United States faced its worst financial crisis since the Great Depression.
“It’s hard to remember everything that happened during those months,” President Barack Obama said last week.
The moves that followed were not universally popular.
In late 2008, while Republican George W. Bush was still president, a $700 billion bailout for the financial sector was approved to prevent more failures.
Obama, a Democrat, took office in 2009, and his adminstration supported the bailout of Wall Street, Obama’s bailout for the auto industry and the passage of an economic stimulus program followed.
There has been progress in recent years.
The unemployment rate has fallen to 7.3 percent, although way too many people have left the job market, millions remain unemployed and millions more are working at low-wage or part-time jobs. Income growth in many fields is stagnant.
“Over the past three and a half years, our businesses have created seven and a half million new jobs.” Obama said in his weekly address on Saturday. “Our housing market is healing. We’ve become less dependent on foreign oil. Health care costs are growing at the slowest rate in 50 years.”
It’s a glimmer of hope.
“All this has happened as a result of the resilience of the American people,” Obama said.
At the same time, there’s no room for satisfaction.
“We are not yet where we need to be,” Obama said. “We need more broad-based prosperity.”
As we look ahead, our biggest hope is that no self-made obstacles are put in the way of economic progress.
However, the threats are there from both sides of the political aisle.
The Obama administration’s is pressing tough requirements to limit carbon pollution from new power plants, despite the federal government’s own analysis that it would have a “negligible” impact on carbon dioxide emissions.
Sen. Joe Manchin, D-W.Va., said the coal industry is being held to “impossible standards.”
“If these regulations go into effect,” he said, “American jobs will be lost, electricity prices will soar and economic uncertainty will grow.”
Meanwhile, stopping funding for Obama’s Affordable Care Act, which is far from perfect but is the law of the land and survivor of a court challenge and the 2012 presidential election, is the focus for the Republican-controlled House of Representatives as the country faces a partial government shutdown a week from Monday and the risk of a first-ever default sometime in the second half of next month if there’s no deal on the nation’s debt limit.
We don’t even want to think about the effects a default would have on the economy.
Americans have done their best to cope in the wake of the financial meltdown five years ago.
Is a concerted effort from the federal government to at least do nothing to make things worse too much to ask?