front cover of Children of the Great Recession
Children of the Great Recession
Irwin Garfinkel
Russell Sage Foundation, 2016
Many working families continue to struggle in the aftermath of the Great Recession, the deepest and longest economic downturn since the Great Depression. In Children of the Great Recession, a group of leading scholars draw from a unique study of nearly 5,000 economically and ethnically diverse families in twenty cities to analyze the effects of the Great Recession on parents and young children. By exploring the discrepancies in outcomes between these families—particularly between those headed by parents with college degrees and those without—this timely book shows how the most disadvantaged families have continued to suffer as a result of the Great Recession.
 
Several contributors examine the recession’s impact on the economic well-being of families, including changes to income, poverty levels, and economic insecurity. Irwin Garfinkel and Natasha Pilkauskas find that in cities with high unemployment rates during the recession, incomes for families with a college-educated mother fell by only about 5 percent, whereas families without college degrees experienced income losses three to four times greater. Garfinkel and Pilkauskas also show that the number of non-college-educated families enrolled in federal safety net programs—including Medicaid, the Earned Income Tax Credit, and the Supplemental Nutrition Assistance Program (or food stamps)—grew rapidly in response to the Great Recession.
 
Other researchers examine how parents’ physical and emotional health, relationship stability, and parenting behavior changed over the course of the recession. Janet Currie and Valentina Duque find that while mothers and fathers across all education groups experienced more health problems as a result of the downturn, health disparities by education widened.   Daniel Schneider, Sara McLanahan and Kristin Harknett find decreases in marriage and cohabitation rates among less-educated families, and Ronald Mincy and Elia de la Cruz-Toledo show that as unemployment rates increased, nonresident fathers’ child support payments decreased. William Schneider, Jeanne Brooks-Gunn, and Jane Waldfogel show that fluctuations in unemployment rates negatively affected parenting quality and child well-being, particularly for families where the mother did not have a four-year college degree.
 
Although the recession affected most Americans, Children of the Great Recession reveals how vulnerable parents and children paid a higher price. The research in this volume suggests that policies that boost college access and reinforce the safety net could help protect disadvantaged families in times of economic crisis.
 
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Coping with Crisis
Government Reactions to the Great Recession
Nancy Bermeo
Russell Sage Foundation, 2013
The financial crisis that erupted on Wall Street in 2008 quickly cascaded throughout much of the advanced industrial world. Facing the specter of another Great Depression, policymakers across the globe responded in sharply different ways to avert an economic collapse. Why did the response to the crisis—and its impact on individual countries—vary so greatly among interdependent economies? How did political factors like public opinion and domestic interest groups shape policymaking in this moment of economic distress? Coping with Crisis offers a rigorous analysis of the choices societies made as a devastating global economic crisis unfolded. With an ambitiously broad range of inquiry, Coping with Crisis examines the interaction between international and domestic politics to shed new light on the inner workings of democratic politics. The volume opens with an engaging overview of the global crisis and the role played by international bodies like the G-20 and the WTO. In his survey of international initiatives in response to the recession, Eric Helleiner emphasizes the limits of multilateral crisis management, finding that domestic pressures were more important in reorienting fiscal policy. He also argues that unilateral decisions by national governments to hold large dollar reserves played the key role in preventing a dollar crisis, which would have considerably worsened the downturn. David R. Cameron discusses the fiscal responses of the European Union and its member states. He suggests that a profound coordination problem involving fiscal and economic policy impeded the E.U.'s ability to respond in a timely and effective manner. The volume also features several case studies and country comparisons. Nolan McCarty assesses the performance of the American political system during the crisis. He argues that the downturn did little to dampen elite polarization in the U.S.; divisions within the Democratic Party—as well as the influence of the financial sector—narrowed the range of policy options available to fight the crisis. Ben W. Ansell examines how fluctuations in housing prices in 30 developed countries affected the policy preferences of both citizens and political parties. His evidence shows that as housing prices increased, homeowners expressed preferences for both lower taxes and a smaller safety net. As more citizens supplement their day-to-day income with assets like stocks and housing, Ansell's research reveals a potentially significant trend in the formation of public opinion. Five years on, the prospects for a prolonged slump in economic activity remain high, and the policy choices going forward are contentious. But the policy changes made between 2007 and 2010 will likely constrain any new initiatives in the future. Coping with Crisis offers unmatched analysis of the decisions made in the developed world during this critical period. It is an essential read for scholars of comparative politics and anyone interested in a comprehensive account of the new international politics of austerity.
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The Failure of Capitalist Production
Underlying Causes of the Great Recession
Andrew Kliman
Pluto Press, 2011

The recent financial crisis and Great Recession have been analysed endlessly in the mainstream and academia, but this is the first book to conclude, on the basis of in-depth analyses of official US data, that Marx’s crisis theory can explain these events.

Marx believed that the rate of profit has a tendency to fall, leading to economic crises and recessions. Many economists, Marxists among them, have dismissed this theory out of hand, but Andrew Kliman’s careful data analysis shows that the rate of profit did indeed decline after the post-World War II boom and that free-market policies failed to reverse the decline. The fall in profitability led to sluggish investment and economic growth, mounting debt problems, desperate attempts of governments to fight these problems by piling up even more debt – and ultimately to the Great Recession.

Kliman's conclusion is simple but shocking: short of socialist transformation, the only way to escape the ‘new normal’ of a stagnant, crisis-prone economy is to restore profitability through full-scale destruction of existing wealth, something not seen since the Depression of the 1930s.

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The Great Recession
David B. Grusky
Russell Sage Foundation, 2012
Officially over in 2009, the Great Recession is now generally acknowledged to be the most devastating global economic crisis since the Great Depression. As a result of the crisis, the United States lost more than 7.5 million jobs, and the unemployment rate doubled—peaking at more than 10 percent. The collapse of the housing market and subsequent equity market fluctuations delivered a one-two punch that destroyed trillions of dollars in personal wealth and made many Americans far less financially secure. Still reeling from these early shocks, the U.S. economy will undoubtedly take years to recover. Less clear, however, are the social effects of such economic hardship on a U.S. population accustomed to long periods of prosperity. How are Americans responding to these hard times? The Great Recession is the first authoritative assessment of how the aftershocks of the recession are affecting individuals and families, jobs, earnings and poverty, political and social attitudes, lifestyle and consumption practices, and charitable giving. Focused on individual-level effects rather than institutional causes, The Great Recession turns to leading experts to examine whether the economic aftermath caused by the recession is transforming how Americans live their lives, what they believe in, and the institutions they rely on. Contributors Michael Hout, Asaf Levanon, and Erin Cumberworth show how job loss during the recession—the worst since the 1980s—hit less-educated workers, men, immigrants, and factory and construction workers the hardest. Millions of lost industrial jobs are likely never to be recovered and where new jobs are appearing, they tend to be either high-skill positions or low-wage employment—offering few opportunities for the middle-class. Edward Wolff, Lindsay Owens, and Esra Burak examine the effects of the recession on housing and wealth for the very poor and the very rich. They find that while the richest Americans experienced the greatest absolute wealth loss, their resources enabled them to weather the crisis better than the young families, African Americans, and the middle class, who experienced the most disproportionate loss—including mortgage delinquencies, home foreclosures, and personal bankruptcies. Lane Kenworthy and Lindsay Owens ask whether this recession is producing enduring shifts in public opinion akin to those that followed the Great Depression. Surprisingly, they find no evidence of recession-induced attitude changes toward corporations, the government, perceptions of social justice, or policies aimed at aiding the poor. Similarly, Philip Morgan, Erin Cumberworth, and Christopher Wimer find no major recession effects on marriage, divorce, or cohabitation rates. They do find a decline in fertility rates, as well as increasing numbers of adult children returning home to the family nest—evidence that suggests deep pessimism about recovery. This protracted slump—marked by steep unemployment, profound destruction of wealth, and sluggish consumer activity—will likely continue for years to come, and more pronounced effects may surface down the road. The contributors note that, to date, this crisis has not yet generated broad shifts in lifestyle and attitudes. But by clarifying how the recession’s early impacts have—and have not—influenced our current economic and social landscape, The Great Recession establishes an important benchmark against which to measure future change.
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House of Debt
How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening Again
Atif Mian and Amir Sufi
University of Chicago Press, 2014
The Great American Recession resulted in the loss of eight million jobs between 2007 and 2009. More than four million homes were lost to foreclosures. Is it a coincidence that the United States witnessed a dramatic rise in household debt in the years before the recession—that the total amount of debt for American households doubled between 2000 and 2007 to $14 trillion? Definitely not. Armed with clear and powerful evidence, Atif Mian and Amir Sufi reveal in House of Debt how the Great Recession and Great Depression, as well as the current economic malaise in Europe, were caused by a large run-up in household debt followed by a significantly large drop in household spending.

Though the banking crisis captured the public’s attention, Mian and Sufi argue strongly with actual data that current policy is too heavily biased toward protecting banks and creditors. Increasing the flow of credit, they show, is disastrously counterproductive when the fundamental problem is too much debt. As their research shows, excessive household debt leads to foreclosures, causing individuals to spend less and save more. Less spending means less demand for goods, followed by declines in production and huge job losses. How do we end such a cycle? With a direct attack on debt, say Mian and Sufi.  More aggressive debt forgiveness after the crash helps, but as they illustrate, we can be rid of painful bubble-and-bust episodes only if the financial system moves away from its reliance on inflexible debt contracts. As an example, they propose new mortgage contracts that are built on the principle of risk-sharing, a concept that would have prevented the housing bubble from emerging in the first place.

Thoroughly grounded in compelling economic evidence, House of Debt offers convincing answers to some of the most important questions facing the modern economy today: Why do severe recessions happen? Could we have prevented the Great Recession and its consequences? And what actions are needed to prevent such crises going forward?
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front cover of House of Debt
House of Debt
How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening Again
Atif Mian and Amir Sufi
University of Chicago Press, 2014
The Great American Recession resulted in the loss of eight million jobs between 2007 and 2009. More than four million homes were lost to foreclosures. Is it a coincidence that the United States witnessed a dramatic rise in household debt in the years before the recession—that the total amount of debt for American households doubled between 2000 and 2007 to $14 trillion? Definitely not. Armed with clear and powerful evidence, Atif Mian and Amir Sufi reveal in House of Debt how the Great Recession and Great Depression, as well as the current economic malaise in Europe, were caused by a large run-up in household debt followed by a significantly large drop in household spending.

Though the banking crisis captured the public’s attention, Mian and Sufi argue strongly with actual data that current policy is too heavily biased toward protecting banks and creditors. Increasing the flow of credit, they show, is disastrously counterproductive when the fundamental problem is too much debt. As their research shows, excessive household debt leads to foreclosures, causing individuals to spend less and save more. Less spending means less demand for goods, followed by declines in production and huge job losses. How do we end such a cycle? With a direct attack on debt, say Mian and Sufi.  More aggressive debt forgiveness after the crash helps, but as they illustrate, we can be rid of painful bubble-and-bust episodes only if the financial system moves away from its reliance on inflexible debt contracts. As an example, they propose new mortgage contracts that are built on the principle of risk-sharing, a concept that would have prevented the housing bubble from emerging in the first place.

Thoroughly grounded in compelling economic evidence, House of Debt offers convincing answers to some of the most important questions facing the modern economy today: Why do severe recessions happen? Could we have prevented the Great Recession and its consequences? And what actions are needed to prevent such crises going forward?
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The Money Illusion
Market Monetarism, the Great Recession, and the Future of Monetary Policy
Scott Sumner
University of Chicago Press, 2021
The first book-length work on market monetarism, written by its leading scholar.

Is it possible that the consensus around what caused the 2008 Great Recession is almost entirely wrong? It’s happened before. Just as Milton Friedman and Anna Schwartz led the economics community in the 1960s to reevaluate its view of what caused the Great Depression, the same may be happening now to our understanding of the first economic crisis of the 21st century.

Forgoing the usual relitigating of problems such as housing markets and banking crises, renowned monetary economist Scott Sumner argues that the Great Recession came down to one thing: nominal GDP, the sum of all nominal spending in the economy, which the Federal Reserve erred in allowing to plummet. The Money Illusion is an end-to-end case for this school of thought, known as market monetarism, written by its leading voice in economics. Based almost entirely on standard macroeconomic concepts, this highly accessible text lays the groundwork for a simple yet fundamentally radical understanding of how monetary policy can work best: providing a stable environment for a market economy to flourish.
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