One year after the near collapse of the global financial system, this much is clear: The financial world as we knew it is over, and something new is rising from its ashes. Historians will look to September 2008 as a watershed for the U.S. economy.
[…]
One year later, the easy-money system that financed the boom era from the 1980s until a year ago is smashed. Once-ravenous U.S. consumers are saving money and paying down debt. Banks are building reserves and hoarding cash. And governments are fashioning a new global financial order.Congress and the Obama administration have lost faith in self-regulated markets. Together, they’re writing the most sweeping new regulations over finance since the Great Depression. And in this ever-more-connected global economy, Washington is working with its partners through the G-20 group of nations to develop worldwide rules to govern finance.
[…]
For much of the past two decades, strong U.S. growth has come largely through expanding credit. The global economy fed off this trend.
[…]
If U.S. consumers no longer drive the global economy, then consumers in big emerging economies such as China and Brazil will have to take up some of the slack. Trade among nations will take on greater importance.
[…]
“The basis of revival of the system along the line of what previously existed doesn’t exist. The foundation that was supposed to be there for the revival (of the economy) . . . got washed away,” Galbraith said.
Sounds like a silver lining to me.
This is a good thing for the long term health of the US economy. I hope that it never comes back.
#2: Too bad it’s so long term we won’t be alive to enjoy it.
All complete BS!!!!
Not a single regulation has been put in place to prevent the bubble from rebuilding which is exactly what is happening. Bailed out investment banks issuing bonuses larger than before the crash, while reporting record profits, while not reporting what they did with the bailout money.
NO ONE HAS GONE TO JAIL—EVERYONE GOT REWARDED!!
Silly Hoomans. Deserve to have your toys stolen.
#4-bobbo-NO ONE HAS GONE TO JAIL
Good point! Barney Frank, Chris Dodd and a cast of hundreds should be behind bars instead of drinking from them.
We are now in the days of free & cheap stuff.
Examples:
* free software
* free online entertainment
* borrowing stuff like DVDs from friends & coworkers
* cheap food at Walmart
* free lazing about at cafes
* cheap Chinese stuff bought direct from China
people choosing to walk, bike.
It’s Post-Neoliberalism.
More such talk here:
http://firmitas.org/PostNeoliberal.html
#4 & 5: Might want to read this.
I am not a Consumer.
#3 God forbid we do anything for the future. Even if we aren’t alive to enjoy it, we have a responsibility to the future to leave the world in a better condition than when we came into it.
#7–Unc Dave==thanks for the link. I “hate” conspiracy/evil cabal theories. In any case, it is as often just the result of many like minded people acting according to their bias===like having more money than you can spend and wanting more. Ironically, and self destructively, that can result in minimum wage slaves perceiving the world and voting in elections the same way that billionaires do.
Silly Hoomans.
#9 you actually think the world has ever been left in a better condition by any generation? We have just about depleted most of the natural resources that took millions of years to form in just over 100 years. We have people that keep propagating that have no chance of ever being above the poverty level. We have a bunch of religious nut jobs with even greater access to weapons that could alter the surface of the planet. Its only a matter of time before shit gets so out of whack there is a plant wide war that puts us back about 1000 years in terms of quality of life.
#11–wilson==you go against the grain of common wisdom. We use up one resource and then move on to another WHILE people are more literate, more healthy, live longer, have more liesure time. THAT has been the increasing wealth one generation has been leaving for the next – – – – – – until now.
Keep your eye on the ball, and don’t be stupid.
“Congress and the Obama administration have lost faith in self-regulated markets. Together, they’re writing the most sweeping new regulations over finance since the Great Depression.”
And what dimwits think this is a good idea?
Who created the Federal Reserve?
Congress.
Who created Fannie Mae and Freddie Mac?
Congress.
Who didn’t sufficiently oversee these quasi-government institutions?
Congress.
And we want them to do more?
We are sooo stupid!
The problem is that not many knew what the financial system was to begin with. So, to say, “the financial world as we knew it no longer exists,” is ridiculous. Was everyone aware of credit default swaps? Did they really understand fractional reserve banking? Did they understand the Enron loophole?
Historians will look to September 2008 as a watershed for the U.S. economy.
That is when most of the economists and pollsters were convinced that Obama was going to be elected and the country would make a hard swing to the left.
Their concern has been proven correct.
Bull.
It still is a consumer economy in the US.
And the article even states it. It is just the consumer must be smarter, just like after the great depression.
Then we’ll have another baby boom and the spending will come back and then a bust and then another tightening of the belts.
Wash, rinse, repeat.
Cursor_
I think the popular phrase should be changed to “Like a Bush in a China shop,” from now on.
Thank you, Republicans, for the end of an era.
“Congress and the Obama administration have lost faith in self-regulated markets.”
“self-regulated markets”?
The U.S.A. operates on fascist and mercantilist systems. “Self-regulated markets” haven’t really existed in in their country for a while.
lol, ignorance.
I’m sure such articles have never been written before…
Bummer. I could use one more bubble till retirement.
The problem with tightening things like loans is the only way the economy grew was giving people loans that they could not really afford unless all the planets were aligned. Of course they became un aligned for many and here is the problem. Now the Obama administration almost seems to me that it could go back to that. Because stimulating the economy is going to require it. Debt is a real problem for all of us including and especially our federal government. But a continuing cycle of debt will only repeat a recession and possible a depression on a similar cycle. Even as income was stagnant spending was increasing. That’s a doomsday scenario to be sure.
Spending was never the problem. Producing on the other hand …
Why save in the US? Interest rates are ridiculously low. You can write off interest on your mortgages and borrow with zero down with no penalties or insurance. Pension plans are under regulated and mismanaged (or worse). Insurance companies (medical and other) will clean you out if you have money in the bank before they pay out.
Systemic changes are needed or an underground economy will emerge.
#15 Alfie – I hope you’re really, really thirsty! You’d better get drinking then as that’s a lot of water you’re going to have to get rid of to be able to get to all those hidden, precious resources. Or is your invisible blue-eyed Jeebus going to magically appear and miracle it away for you? And if you manage all that does it mean that it all automatically belongs to the U.S.? Drink baby, drink. Have a good time with that.
Conservatives regain power? You already had your chance with that. Look what it got ya.
“Will it go round in a circle,
Will it fly high like a bird up in the sky …”
Its all cyclical.
“Boom Bubble Bust, Boom Bubble Bust, Never let it rust, Boom Bubble Bust, Boom Bubble Bust, waiting for the cusp, Boom Bubble Bust, Boom Bubble Bust …”
“Don’t worry, Be happy”
Consumerism, that’s where the economic health of the nation depends on people ‘buying’ into the idea that wealth represents success. The fallacy that he who posseses more is more secure, happier, and more successful. The perversion that it’s better to compete than to cooperate. Life is a question of values, how you live and the decisions you make effect how you see the world and yourself and ultimately determine your destiny. As true for the individual as it is for society. Time to grow up. This might be a good thing.
amodedoma;
What! And give up my big screen TV! Just to be happy!!
What would Oprah have to say!
In four words yes.
#30 amodedoma
True wisdom.
Oh yeah, our service economy will take off and provide jobs for zillions.
For every manufacturing job lost, a hundred more service jobs are created. As people move into service jobs, average wages will go down and down and more service jobs will be created. When wages approach zero, or you even have to pay to work, service jobs will explode. This is that virtuous self reinforcing cycle economist, Republican, business people have been promising.
We don’t need no stinking manufacturing base.