Ten years after the 2008-09 financial crisis, we're swamped with studies and reminiscences. What are the legacies of the crisis? How long will they endure? Are they accurate — or just convenient scapegoats? Here are three takeaways.
(1) We can no longer rule out another worldwide depression — something akin to the Great Depression of the 1930s.
The crisis surprised almost everyone. Another worldwide depression was considered an impossibility. Our economic understanding and the government's tools to fight instability had progressed sufficiently to halt any downward spiral before it became a full-fledged depression. True, there was no depression. The unemployment rate peaked at 10 percent, which — though horrific — was well below the 25 percent peak in the 1930s. But if the experts were surprised once, they could be surprised again.