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Meltdown 2008: A Grim Anniversary for the Middle Class

The destruction wrought by our political and financial elites could take another 10 years to undo.
trading floor

In addition to the usual (and deserved) remembrances of the September 11 attacks, this week also marks the grim anniversary of a very different but equally significant collapse. Ten years ago on September 15, the financial meltdown began that would usher in the recession of 2008.  

It was the single worst financial crisis in the adult lifetime of almost everyone who was alive at the time. Yet you’d never know it from the way our ruling class has behaved ever since. When they weren’t using the Great Recession for crude racial and class warfare demagoguery, they were effectively denying that it was really that bad. (Remember Democrats’ weak retort to Donald Trump that “America is already great”? Or Republicans tossing off “We don’t have a revenue problem, we have a spending problem” at the height of unemployment and low aggregate demand?)

Trenchant New Republic columnist Jeet Heer recently noted in a Twitter essay that centered on the funeral of John McCain, “We’ve had decades of elite failure, elite impunity, elite coddling of racism…and also elite tolerance of corruption.” He finished by noting that “The failure of the elite to come to terms with its own responsibility vitiates everything [else].” He might as well have been writing an editorial on the meltdown and its aftermath.

In 1975, the pioneering underground playwright Robert Patrick produced his signature Boomer generation requiem, “Kennedy’s Children.” To appropriate that title, every Gen. Xer and Millennial alive today is a “child” of what happened on and immediately after Black Monday. Those of us in our late 20s and 30s were eagerly about to enter the start of what our yuppie parents called our “peak earning years,” after having worked crappy starter jobs for little or no pay. (“We pay you with the credit.”) High school- and college-aged Millennials were looking forward to the good jobs their overpriced and debt-burdened degrees were supposed to guarantee them after those first couple years of internships.  

It didn’t happen. As our World War II and Korea veterans might have said, the Meltdown threw away “the best years of our lives”—except it wasn’t for anything as honorable as halting Nazism or Communism. It was simply to feed the greed of financial sociopaths.

September 2008 spelled the beginning of the end of the “giants of industry” that had defined the mid-to-late 20th century American economy. General Motors, Merrill Lynch, Chrysler, Lehman Brothers, Maytag, Polaroid, Kodak, Continental Bakeries, K-Mart/Sears, Mervyns, Circuit City, Radio Shack, Borders, Blockbuster—all fell like 10-pins in a bowling alley. (Not to mention desiccated coal mines and steel factories and local newsrooms.) The few that are still alive today are mere shadows of their former selves.

The companies that survived and thrived during the Great Recession, and are currently powering today’s recovery—Amazon, Netflix, Facebook, Google, Yahoo, Uber, Lyft, Airbnb, and Tesla—were all launched over the last two decades or so by the most fortunate factions of Millennials and Xers. These are people who have no adult memory of the Great Prosperity that their postwar parents and grandparents practically took for granted.

It’s also no accident that many of the worst racial excesses in recent years happened after the white middle class finally got a taste of the same zero-tolerance and no-excuses “bootstraps” medicine that liberals have accused conservatives of throwing in minorities’ faces. As Jamelle Bouie noted in Slate, “When coupled with the broad decline in incomes and living standards caused by the Great Recession, it seemed to signal the end of a hierarchy that had always placed white Americans at the top.” But while African Americans, immigrants, and lower-middle-class whites were now forced into a Hunger Games-like competition for what little scraps were left, the bankers and CEOs and their politician enablers shamelessly rewarded themselves with record-breaking bonuses and benefits. Their attitude was almost as appalling as a spousal abuser asking for thanks because he dropped you off at the ER afterwards.   

This is because, for the most part, the people who were ruling both parties’ electoral roosts during the run-up to the 2016 election were people for whom the Great Recession had brought nothing but fame and fortune. The years from 2009 through 2012 meant lucrative book and cable deals, gorgeous jewelry and tailored suits, luxury cars, and upscale new homes for Paul Ryan, Debbie Wasserman-Schultz, Sarah Palin, Ted Cruz, Valerie Jarrett, Reince Priebus, and Robby Mook. The donor classes of both sides were so unbelievably wealthy and privileged that the meltdown never really affected them.

In this kind of Beltway bubble, how could the complaints of the working and middle classes sound like anything other than whiny sour grapes? Recession? What recession? Things couldn’t be better for me and my friends! One can almost hear these folks saying among themselves, as Betty White’s campy cooking show hostess Sue Ann Nivens once did on The Mary Tyler Moore Show, “What’s all this fuss about famine?”  

When Trump gave his inaugural address, Respectable Journalists™ were all a-Twitter about its atrocious bad taste and coded racial appeals. Yet for all its faults, the speech represented for many people the very first time that an A-list authority figure had truly recognized the shuttered factories, foreclosed homes, failing schools, and broken dreams that had been left in the wake of 2008. Indeed, much of the same speech could have been given by Spike Lee or an immigrant rights’ activist with only minor modifications.

Paving the way for both the Trump Train and the democratic socialists was the fact that both parties threw their principles completely out the window that fateful fall. President George W. Bush made hypocrites out of all free-market conservatives with his zippo-accountability bailouts and giveaways, adding to his previous track record of Cheney-style crony capitalism. (Remember Enron’s Kenny-Boy Lay? Or Bernie Madoff’s “investment” fund?) The fat cats were going to get their taxpayer-financed bailouts no matter what.

Meanwhile, Barack Obama drank gallons of Kool-Aid from people like Tim Geithner, Ben Bernanke, Larry Summers, Robert Rubin, and all the other Bill Clinton and George W. leftovers who had been asleep at the wheel for 15 years, and stolidly refused to lay a finger on executives’ heads. Why, if a bunch of bankers and auto CEOs were dragged before the cameras doing perp walks, how could we ever Restore Confidence In Our Institutions? If these colleagues of ours aren’t allowed to keep their gold-plated golden handshakes and bonuses and stock benefits, how could we possibly stave off  a “brain drain” right when these “brains” were needed most?

During Obama’s first term, the top 1 percent took more than all of the gains from the economy after the crisis. Meanwhile, at least 9.3 million families lost their homes to foreclosure due to the mortgage meltdown. For many Americans, the financial and psychological damage will be lifelong.

No, there would be no Mueller Time for the Wall Street and Big Auto execs who created this mess, no prosecutors or indictments and no-knock raids forcing them to open all their books in a court of law. Forget about too big to fail. The real takeaway for the all-but-destroyed middle class was that these Masters of the Universe were too big to JAIL.  

It was that groovy 1970s grandpa and founding father of reality TV Allen Funt who said that his classic Candid Camera show “caught people in the act of being themselves.” That’s exactly what the Meltdown of 2008 did for our ruling class. It caught them in the act of being their true selves—except there was nothing funny about it because the joke was on us. And the prize package at the end of the show didn’t go to the ones who desperately needed the money, but to those who were already winners on the game show of life.

Regardless of one’s feelings about Hurricane Donald, it will probably take another eight or 10 years to undo the fallout from all of the catastrophically wrong elite failures that began on that horrible day 10 years ago. Let’s just hope and pray, for all of our sakes, that it isn’t already too late.

Telly Davidson is the author of a new book, Culture WarHow the 90’s Made Us Who We Are Today (Like it Or Not). He has written on culture for ATTN, FrumForum, All About Jazz, FilmStew, and Guitar Player, and worked on the Emmy-nominated PBS series “Pioneers of Television.”