On Monday, the discussion focused on how Sept. 11 had defined a generation – and it did. But for those who came of age in the wake of the terrorist attacks, it was another anniversary marked this week that shock the foundation of American principles to the core.
Ten years ago this Saturday, Lehman Brothers collapsed, the first warning sign of the coming Great Recession. For an entire generation, childhood was dominated by vivid memories of foreclosed homes with overgrown lawns, pleas from food banks facing unprecedented demand, and a constant feeling that employment, even for those with good degrees and years of experience, could not always be expected. For these, the financial crisis instilled distrust and concern over a persistent threat of economic instability.
The potency of that experience is reinforced by a comprehensive look at the impact of the recession published by the American Enterprise Institute. That report highlights not only data on the depth of the felt economic instability but also the lasting distrust of Wall Street, the government and experts.
A Gallup/USA Today poll from September 2008 recorded that 55 percent of respondents said that they were worse off financially than they had been a year before. In 2009, another Gallup poll asked respondents about finding a quality job – only 8 percent said that it was a good time to find one.
During the recession, confidence in Wall Street plummeted, unsurprisingly, with only 4 percent of respondents in 2009 saying that they had a great deal of confidence in those running Wall Street. In 2017, the Cato Institute and YouGov asked respondents a similar question and 21 percent had a favorable view of Wall Street. In another revealing question, in the 2017 Cato/YouGov survey, only 32 percent said that they thought that the people on Wall Street are as honest and moral as other people.
[Also read: What kids should know on 9/11]
The loss of trust in both government and financial institutions was also reinforced by a 2010 Bloomberg poll that showed that more Americans thought that Wall Street and government actors across the board had done more to hurt the economy than to help it. In the same year, a poll by Allstate/National Journal showed that only 9 percent of respondents thought that the middle class had benefited the most from the government bailout, 40 percent said banks had benefited more and 20 percent said that major corporations and 16 percent said wealthy individuals had.
These numbers are revealing, but they just show what many knew already by anecdote: the financial crisis was felt most acutely by the people who lost their homes and their jobs and watched as the government bailed out big banks and businesses. They heard lots of talk about boosting the economy, but never felt much benefit themselves. Cheated out of prosperity by experts who said that investing in real estate was a good bet, they were also cheated out of recovery by an economy that boomed while they continued to struggle.
For most of the eight million homeowners who found themselves in foreclosure, for example, there was no bailout from Washington. Instead, the injection of cash boosted the stock market, banks and the companies that the government decided were too big to fail.
Today, those people still have yet to regain what was lost in the recession – indeed, the wealth of middle-income households is down by an average of $40,000 compared to 2007 when the numbers are adjusted for inflation.
That experience had a profound affect on how today’s young people understand wealth, stability, experts, and the role of government.
For young people who grew up in the shadow of the collapse, they learned that the careers that their parents had asked them to consider as children were unlikely to work out. A good, stable and long-term company job was no longer an option. And even if they could obtain such a position, there was no guarantee that they wouldn’t find a pink slip on their desk one day, for that’s exactly what had happened to their own parents or those of someone they knew. Instead, entrepreneurship, a backup gig economy and a diverse skill set seemed to be the ticket. Getting and keeping a job long-term was not.
These experiences doubtless contributed to the alienation of middle-class Americans across the country and to President Trump’s 2016 victory. What he promised was more immediate and visceral than a return of the manufacturing jobs that had disappeared decades before his election in 2016. Instead, his promise was simply to help those who felt they had been left out.
For their children, now young adults, who learned that the government and the banks were not to be trusted, it might be hard to trust even the good economic data that’s coming out each month, let alone the bombastic president who claims credit for it all.
