No, this is not about the British blues rock band, rather it is a snapshot of the Great Recession of a decade ago.
For many of us, the recession was the scariest period of our lives. If you came through it intact, good for you. Many people I know lost jobs, or saw their careers negatively impacted, some lost their houses, others lost a portion of their investment value or had to dip into their retirement savings. It literally destroyed some families. What it illustrated are the millions of people in this country who are several paychecks away from economic collapse.
A decade later, it’s still hard to understand how the packaging of home loans (I didn’t even know they did this) led to a global economic meltdown. How could that lending practice wipe out large Wall Street firms, wreck the car industry and result in a net decrease of 6.8 million jobs and a 10 percent unemployment rate.
There are great resources of explaining the calamity of the recession so I’ll defer to those experts. The point of this blog is a personal reflection of this time period.
I can remember driving home from my job, night after night, listening to NPR, to get the latest national news of the near collapse of the country. Every night, the news was like another storm surge washing over the country, destroying whatever lives were within its path.
The organization I worked for, saw the early signs of the looming crisis and went into an early cautionary mode. There were meetings after meetings, some I was invited to, others not. Short-term and long-term spending were reduced. Projects were cancelled or deferred. In fact, we started doing work for other organizations, kind of like taking in laundry, to keep our employees busy. We had to be very careful about how projects were evaluated because other people’s money was involved and the objective was to reduce our own out-of-pocket money, not give up money coming from other sources.
Operating budgets were combed for areas where money could be given back. Internal operations were hit hard, especially education and training programs, and any kind of equipment purchases or upgrades. Keep the lights on and pay the employees, those who would remain.
The largest operating cost of most organizations is people. The most painful part of the experience was in personnel. For the next few years there would be no raises, but thankfully benefits were mainly untouched. Health insurance costs went up, and our contributions to retirement increased, but nothing was cancelled.
For our organization to be sustainable, our direction was to look at positions to eliminate. Some incumbent full-time employees were given the option to move into other positions, or simply terminated. Not every open position was eliminated, each was reviewed for priority, some were simply kept open. Part-time positions were generally sacrificed, but again, they were examined for whether they were front-line service or not. Some departments were hit heavier than the one I worked in, but the smell of death was in the air.
The personnel meetings over terminations or reduction-in-force (RIF), were difficult ones. There were names attached to those positions and lives were impacted. Employees knew that an effort was underway, but it felt like planning for D-Day, meetings were secret and lists of positions were drafted, reviewed, and revised. Even if you were involved in the meetings, you never knew what other meetings were taking place. You wondered if there were other lists, with your name on it.
Employees often came to my office thinking I had information I could pass on, which I couldn’t provide. Some things I knew, but I had to feign ignorance, a part I could play. Often they just came to talk and I tried to send them away feeling a bit better if in someway I could. People were searching for clarity and hope, two things I had in short supply.
Looking back, the events of this period are a bit jumbled, but they came in waves as the impact of the recession became more clear, and the need for additional changes grew. I believe we lived under this cloud for nearly two years. There was no start, no finish, just awash in a sea of nervousness and vulnerability.
For the first time in memory, real estate values in my city declined, an unheard of event. My house lost more than nine percent of its value. Of course in the past few years the value has grown nine or more percent each year. But the fact that a prosperous community was impacted, made you realize the extent of events happening elsewhere.
At the time, I owned a 13 year old car, and checked into the “cash for clunkers” program to see if I qualified for the incentive. Nope. I think I missed on mileage. I would wait several more years before buying, simply preferring to have the money in the bank if needed. Having money in the bank is a feeling I’ve never forgotten. I have no opinion on whether the deals to help some auto companies were sound. The threat of those companies going under, and the loss of jobs would have been catastrophic, economically and psychologically on the country.
I always suspected that my job was on a some draft of position to be eliminated. I also suspected that it was my boss who offered me some cover. I have no proof, it’s just something I have always believed. The fear during that time was thick and choking like Beijing smog.
Covering my bases, I checked into training programs available to the local community college, wanting to see what options were available. Being over age 50 at the time is a scary time to be thinking about reinventing yourself in a rapidly changing world, where you will be competing with much younger workers. You calculate how many months of mortgage payments and utilities you can make with readily available funds.
A little more than a decade earlier I had been in a position of leaving a job and not having a backup plan. The challenges and frustrations of that experience were part of my psyche. Now, older and probably having to change careers, I worried about that.
Each day as I listened to those NPR newscasts, I searched for something optimistic, but if was a long time till there was a feeling of confidence, like you could take a breath. We were poised to wonder if another shoe was going to drop and deeper cuts would have to be made. Employees walked on eggshells and did everything they could to show their value. You saw people age before your eyes. I felt like five or more years of my life disappeared. In the end, I came through it fine compared to many. My retirement investments lost some value and going years without a raise shrank my purchasing power, but I survived.
As the government spent billions of dollars to rescue and shore up businesses, you wondered, are any of these greedy fuckers going to jail? Somebody needed to pay.
Not only were there no prosecutions, years later, Trump and the GOP weakened legislation designed to reel in Wall Street so these shenanigans were less likely to happen in the future.
So what did we learn from billions of dollars wasted to bail out banks and industry? Millions of lives changed forever and the economies of other countries were negatively impacted.
Is there a lesson from capitalism gone off the rails? Maybe that greed is no fucking good. I even think it’s in the Bible somewhere. Most of the greedy bastards that still operate the same way in business claim to be Christians. How could they have missed that section of the Bible or that Sunday sermon?
Here’s my suggestion, if you work on Wall Street or at the top of an insurance or pharmaceutical company maybe “greed is not good” should be tattooed on your forehead, or some other coveted part of your body. Just a thought.
Are we smarter and protected from another big recession? Economics say no, and predict a major economic downturn on the horizon. Who losses this time? Us again.