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The Great Recession’s Impact

Robert J. Samuelson in today’s Washington Post on how The Great Recession has a stranglehold on us all.

One paradox identified by Pew is that some groups that "have been hardest hit by this recession (including blacks, young adults and Democrats) are significantly more upbeat than their more sheltered counterparts (including whites, older adults and Republicans) about a recovery." For instance: Blacks suffer higher unemployment than whites (15.4 vs. 8.6 percent in June) but believe more strongly that the recovery has begun (47 to 38 percent). Pew’s explanation is politics. With a Democratic administration, Democrats are more upbeat and Republicans more glum.

Another theory — more powerful, I think — is that the Great Recession, though jarring to almost everyone, has been most disruptive and disillusioning to those who were previously the most protected. It punctured their cocoons so unexpectedly that they became more cautious and fearful, whereas those who even in good times faced job loss and income shifts (many blacks, the young and the poor) were less surprised. One legacy of the Great Recession is that insecurity and uncertainty have gone upscale. People feel more exposed. They tend to plan for the worst rather than hope for the best. Their reluctance to make major purchase commitments (a new car or home) validates their pessimism by retarding recovery.

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