In June, it will be five years since the beginning of the Wall Street-bred financial crisis that triggered the worst global recession since the Great Depression. Only a handful of people responsible for the meltdown have felt any repercussions for their actions, despite the fact that their financial shenanigans wiped out some $12 trillion in wealth and pushed several countries like Greece and Italy to the brink of insolvency. Just ask Iceland what going bankrupt on a national scale feels like...
While some reporters have done a pretty good job digging into the root causes of the meltdown — Matt Taibi's Griftopia is a must-read in my opinion, and New York Times economist Paul Krugman has written extensively on the issue — the question of why it happened is less important to most people than the question of when it will end. Will 2012 be the year that the world gets back on its feet?
I would argue that it won't end until the economic system is fixed and all the weak regulations and loopholes that made the crisis possible are patched. Seeing some of the men responsible stripped of their wealth and prosecuted would also do a lot to bolster the confidence of the average citizen in the economic system.
I'd further argue that the global unemployment rate needs to drop and private sector wages need to recover before we can close the book on this whole sorry event — and unfortunately that may never happen in an increasingly globalized economy where jobs have never been less secure or workers more disposable. Every time you hear the words "free trade" you should cringe; most of the tariffs and regulations that have been swept away to boost trade and exports for companies and corporations were there in the first place to protect jobs, tax revenues and the environment. As an added bonus, globalism is the reason why Greece's economic troubles can drag our economy down, despite the fact that it's on the other side of the world.
Sadly, I'm guessing we're a long way away from any real recovery — although some economists who only consider the performance of stock markets have already declared the recession over. Millions of young people who took to the streets of New York, Oakland, Vancouver, etc. in 2011 as part of the "Occupy" movement would beg to differ. Despite the media's confusion about what the protesters stand for, most people get that it's all about economic justice and the fair distribution of wealth, and the fact that the banks responsible for the problems were bailed out while all the people affected were left to suffer on their own.
Looking forward to the next year, I don't think we're out of the woods yet. European Union nations will continue to be stressed by debt loads; manufacturing is expected to remain weak along with consumer demand and consumer confidences figures; and the countries that did the best in the financial crisis (including Canada) could have some major issues of their own going forward.