13. Economic Fallout

The subprime financial shock hit in summer 2007, and by early 2008, the U.S. economy had come unhinged. Economists and policymakers debated whether the nation was in recession, but for most Americans, there was no debate. They were worth measurably less and their incomes didn’t stretch nearly as far.1 For them, this was a recession.

By summer 2008, little was going right: Job losses were intensifying, and part-time work was replacing full-time. The stock market was down and, for the first time since the collapse of the tech-stock bubble early in the decade, was having trouble getting back up. Gasoline prices were rocketing past $4 per gallon. The cost of bread, milk, and other staples was rising quickly as well. Millions ...

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