A Solemn Anniversary: Lehman’s Brothers Bankruptcy
By Consumers Union on Friday, September 14th, 2012
By Norma Garcia
Four years ago today, Lehman Brothers went bankrupt and the U.S. and global financial system began to unravel.
On this fourth anniversary of the Lehman Brothers demise, Americans for Financial Reform (AFR), the broad coalition of consumer organizations of which Consumers Union is a member, has published a fascinating briefing examining the cumulative economic damage caused by the financial crisis of 2008-2009. AFR notes that as a result of this financial crisis, millions of American lives have been impacted and we are now witnessing the most dramatic erosion of wealth since the Great Depression.
AFR acknowledges there is no way to put a dollar figure on all the costs, but digs deeply in its analysis to show the ways in which the public interest has been impacted. AFR examines categories of harm, such as fewer jobs and less income, increased poverty, housing and record foreclosures, declining household wealth, the disproportionate impact on communities of color, and diminished economic output.
Some of the startling impacts of the financial crisis as noted in the
AFR briefing include:
- Unemployment remains over 8 percent, up from a pre-crisis rate of 5 percent, representing a net increase of more than five million people;
- Duration of unemployment has more than doubled;
- Between January 2007 and early 2012, roughly 4 million families lost their homes to foreclosure;
- By the end of 2011, Federal Reserve data put total household wealth at $58.5 trillion, down from $67 trillion before the crisis;
- The decline in household wealth was even more precipitous for minority families.
These, and the other sobering statistics included in AFR’s briefing remind us of how important it is to have sound policies in place and a strong regulator like the CFPB to police the financial services industry to prevent another financial meltdown.
We’d like to hear from you. How has the financial crisis impacted you? Share your story with us.