Sep 15, 2018

What they're saying: Consequences of the financial crisis

Axios asked some experts to share the greatest long-term consequence of the financial crisis, in just one sentence:

Andrew Ross Sorkin, author of "Too Big To Fail":

"The greatest consequence is misunderstanding of the crisis itself and its lessons — a misappreciation that the reason the crisis was so deep and took so long to recover from was not the policy response, but that prior to the crisis, debt had masked structural problems like wage stagnation, workers leaving the workforce and automation. And we’re still not dealing with them."

Sen. Elizabeth Warren (D-Mass.):

“The crisis cost the average American $70,000 over their lifetimes because greedy bankers gambled with their future and lost — many of those families are still struggling today.”

Nassim Taleb, former trader and author of "The Black Swan":

“The only tangible long term effect has been a marked improvement of my checking account as well as the vindication of the principle: if you fail to convince them, take their money."

Larry Summers, former U.S. Treasury Secretary:

"Increased distrust in both the competence of elites and their commitment to doing good overall."

Andrei Shleifer, Harvard economics professor and author of "A Crisis of Beliefs":

"Ignite the culture wars, brewing since Nixon, into a full blown electoral and increasingly violent conflict."

Kevin Warsh, former Federal Reserve governor:

"Too many Americans lost trust in our system of governance, lost belief in the market economy, and lost confidence in the American Dream; that faith must be revived, restored, and reaffirmed before the next economic downturn."

Marc Andreessen, venture capitalist and Facebook board member:

"Paranoid conspiracy politics on the left and the right."

Gene Sperling, former director of the National Economic Council:

"I hope one of the greatest long-run consequences of the financial crisis will be the creation, survival and strengthening of the CFPB — because a full-time financial champion for typical consumers was desperately needed and filled a gaping hole in our regulatory framework."

Neal Wolin, former acting U.S. Treasury Secretary:

"Hopefully, the massive economic and financial disruptions to families, businesses and the country have helped the financial services sector and its regulators, globally, understand and remember the critical importance of recognizing and managing financial risk."
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