History Of The Great Recession: The Jobless Recovery

In this chapter, the author highlights the failing economy of Northeast Ohio. After the decline of the steel industry, the region lost tens of thousand of jobs and thousands of citizens moved out as a result. Although the region saw a slight boost in their economic growth, they were comparably slow to many other metropolitan areas in the country.

In recent years, the economy in the United States has been in what most would see as a recession. American people differ in the way they react to a recession. Some, such as Michael Moore, feel it becomes a downward spiral as big business and it’s stockholders gain more money and power, and it’s workers gain less money and stability.

First, we need to understand how the Great Recession occurred. It all started with President Ronald Reagan in the 1980s. Reagan was famous for his supply-side economic views (Amadeo 1). He used top-down economics meaning he used government intervention to give businesses tax breaks and subsidies to create economic growth. With this he also started a continuing phenomenon to deregulate Wall Street. He believed this would create vast economic growth and it did. But it created a bubble and it

The recession was caused by the “dot-com” collapse which resulted in the bankruptcy of several large companies. The unemployment rate in October 2000 was 3.9% and that rate rose to 4.9% by August 2001 (Gail Makinen). Also, industrial production fell 3.5% from December 2000 to August 2001 (Gail Makinen). The economy actually improved in the second quarter by 2.7% (Kimberly Amadeo). Then, the economy fell again due to the attacks. 9/11 made the economy contract 1.1% in the third quarter of 2001 (Kimberly Amadeo). Unemployment continued to rise to 5.9% in mid-2002 and topped off at 6% in June 2003 (Kimberly Amadeo). The attacks of 9/11 extended the recession of 2001, as it lasted to

Everybody in the United Stated was affected by the recession that began in December of 2007 and spanned all the way to June 2009. Even though the recession is over, many people are still being affected by it and have still not been able to recover from the great recession. “The recent recession features the largest decline in output, consumption, and investment, and the largest increase in unemployment, of any post-war recession”. Many people lost their jobs due to the recession and some of them are still having a hard time finding jobs and getting back on their feet. Businesses

At the end of the Great Recession in June of 2009 Massachusetts had an unemployment rate of 8.3% and Connecticut had a rate of 8.1%, very similar. When came down to recovery from the recession Massachusetts was on money on getting their jobs back. According to MassBudget.gov is had stated that “Massachusetts has maintained lower unemployment rates than the US throughout the duration of the Great Recession and its aftermath.” One reason why Massachusetts had a faster recovery than Connecticut is because Mass didn’t lose a lot of jobs during the recession. Also while recovering from the recession, not only they recovery all their jobs they lose, they kept adding more jobs. Their biggest industries are health care and education in creating more jobs while construction are creating less jobs. Massachusetts really had a fast recovery after the Great Recession. According to Gioia (2016) “Massachusetts and Connecticut are on widely divergent paths in their respective recoveries from the great recession. While Connecticut continues a slow and painful slog to get back lost jobs, Massachusetts is surging ahead.” Gioia is right because Connecticut is struggling while Massachusetts keep on winning and improve their

The Great Depression was a harsh global economic depression in the decade prior World War II. The Great Depression, while it happened far before the “Great Recession” of 2008, it can be greatly compared. During the Great Depression, all income, tax revenue, and prices dropped. International trade decreased by more than 50%, and U.S. unemployment climbed to just above 25%. Industrial cities like Detroit and Pittsburgh took the heaviest hits. While the recession of 2008 was not as drastic, it affected the world economy and resulted in a global recession more so than ever before. The percent of U.S. citizens unemployed had reached 10% as of 2009. Along with the challenges unemployment presented, consumer

Over the past five years, the federal government has also found it difficult to measure “improvement” in states. Currently, success is based in terms of job entry rate or increases over time in job entry rate, retention rate, and earnings gain. States may use quarterly unemployment insurance wage records, surveys, administrative records, or a combination of those data sources. States are given wide latitude in the sources of information they report. Also, to further distort the findings, there is no baseline data with which to make comparisons (Danziger, 2000).

The Great Recession that began in 2007 introduced people to a feeling not since felt since the Great Depression of the 30’s and 40’s. It reintroduced a new generation to the realization that we cannot take anything for granted. It sprung up fears in a fearless population, and out of it born a stress like no other. We can harness that stress; we own it as individuals, employees, as employers, as caretakers of the future.

George Santayana, a Spanish poet and philosopher said, "Those who do not learn history are doomed to repeat it." This quote applies to the Great Depression of 1929 and the Great Recession of 2008. There are many similarities between the two, like the causes, the actual events, and the aftermaths. Several factors led to the Great Depression, which were the following: overproduction by business and agriculture, unequal distribution of wealth, Americans buying less, and finally, the stock market crash of 1929. The Great Recession also had similar factors leading to it, like the housing “bubble” burst and less consumer spending. In both events, the Presidents enacted programs that they believed would help the American people.

The Great Depression and Great Recession were two unique events that had monumental impact on the economy. Both had similarities, and differences that made them unique. The Great Depression was caused by people living on credit, and when it was time to pay they didn’t have the money, this happened on a wide spread scale. The crashing of the stock market was what officially started the Great Depression in 1929. The great recession was caused by subprime mortgages as well, as risk taking by financial institutions. Much like the depression people were living over their heads, and when it was time to pay their bills they were unable to. Both the Great Depression and Great Recession were brought on by bubbles, for the Great Depression it was the stock market bubble, for the Great Recession it was the housing bubble.

Although the federal government declared that the “Great Recession” had hit its low regression and the hoped-for economic recovery had begun in December 2009, California continued to suffer from the ill effects of the financial blow.

This recession has been the biggest economic struggle in my lifetime. Everything that could go wrong went wrong. The event that led to this recession is the housing crisis, where banks were giving out loans, almost without any restrictions. People were getting involved in one of the best economic times in our history. Confidence was everywhere and the ideal mindset hit everyone. When the economy hit all new highs, people thought the supply and demand chain would continuously rise. The business cycle seemed to be a lie to many Americans. However, the business cycle is real and the world lives a part of it everyday. When deregulation became extreme and private companies, especially banks, got all the power, nothing could stop them

Because the governments’ prevailing economic theory was based on laissez-faire economics, the government believed that recessions were self-correcting. Eventually unemployment and inflation stopped declining, but not before the U.S. lost 1/3 of it’s output and 25% of the workforce was unemployed.

The United States is currently experiencing a slow recovery from the recession of 2008-09. The current unemployment rate is 7.7%, which is the lowest level since December of 2008 (BLS, 2012). However, this rate is believed to higher than the rate that would occur if the economy was operating at peak efficiency, and it is also believed that there are structural issues still underpinning this performance. For example, the number of Americans who have exited the work force as the result of prolonged unemployment is believed to be higher than usual. In addition, the Congressional Budget Office (CBO, 2012) notes that long-term unemployment of greater than 26 weeks is at a much higher rate than normal, which will have adverse long-run effects on the economy, since workers with long-term unemployment often find their career paths derailed.