Opinion

Editorial | Who won, lost the meltdown? | Rich Elfers

Did you ever stop to ask yourself, “Who were the winners and losers of the 2008 economic meltdown?” I have. I’m not pleased with the answers I get.

Let’s see whom the winners and losers are in the economic crash and perhaps learn some lessons for the future.

First, let’s look at the winners: Some investment banks, many of whom made fraudulent and irresponsible decisions ended up not having to pay the consequences of their actions, and instead got billions in government bailouts. None of these top ranking business leaders has been prosecuted for their crimes since the 2008 meltdown. That’s going on four years now and not one major prosecution has been initiated.

With the Federal Reserve lowering interest rates, banks benefited from an inflow of cheap money. The government gave them bailout money to keep them afloat, but there was no requirement for them to loan it out. Rather than spreading this money out through cheap loans, they’ve sat on it, making it difficult for businesses and individuals to get loans.

The low interest rates have encouraged a rising stock market. And the richest 10 percent of the population have benefited because they own 80 percent of the stocks, according to an article in the New York Times.

So, who are the losers? Billions of dollars disappeared from the value and equity of our houses, so much so that there are many people who are what is called “underwater” with their mortgages. They’re paying on home loans for a house that is worth less than their debt. All you have to do is to walk through the

residential neighborhoods of your town to see houses that have been abandoned and that are not maintained, pulling down the home values of neighboring houses.

The unemployment rate is current at 8.3 percent, improved from its high of 10 percent in October 2009, but still very high. Many businesses have automated their factories, meaning they won’t be hiring semi-skilled and unskilled workers when the economy picks up. Those jobs will be gone.

Millions of people saw their life savings disappear and their retirements shrink. Many boomers will not be able to retire as they move into their 60s.

What lessons can be learned from this period of inequity? Perhaps the hard lessons my Depression-era parents learned and taught me can help you: Don’t spend more than you make and pay off your debts, especially your home loans, by the time you retire. Live modest lives. Examine what you think you need and decide whether it’s a necessity or a desire. Save, rather than spend.

Put your priorities on emotional investments: Invest your time with your family; spend less time in front of the TV, or other electronic devices. That time before your children are grown goes by oh so quickly. As Barbara Bush said: “At the end of your life, you will never regret not having passed one more test, not winning one more verdict or not closing one more deal. You will regret time not spent with a husband, a friend, a child or a parent.”

Don’t be carried away by trying to keep up with those who have lots of material possessions – they probably went into debt to get them. Remember the ancient adage: “A man’s life does not consist in the abundance of his possessions.”

Learn a skill that is in big demand and keep learning. Society changes and what was a good-paying job 20 years ago may no longer exist tomorrow. Adapting to changing times is a must in our global society. Become a lifelong learner.

You may not be able to control what happens on the national and international level, but if you’ve done these things, decreasing housing prices won’t affect you much, except on paper, and you won’t have to scramble to pay off your loans after you’ve lost your job. Instead, you’ve developed other marketable skills. If you do these things, you’ll be a winner the next time the economy tanks.

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