Photo by Joseph Rodriguez
Putting a human face on the financial crisis
Thursday, July 21st, 2011
The Investigative Reporting Workshop and New America Media have teamed up to portray the human face of the crisis a year after the passage of landmark financial reform legislation.
A year ago, President Barack Obama signed the Dodd-Frank financial reform bill.
“Over the past two years, we have faced the worst recession since the Great Depression,” Obama said. “Eight million people lost their jobs. Tens of millions saw the value of their homes and retirement savings plummet. Countless businesses have been unable to get the loans they need, and many have been forced to shut their doors. And although the economy is growing again, too many people are still feeling the pain of the downturn.”
The financial reform legislation was intended to address the “antiquated and poorly enforced rules that allowed some to game the system and take risks that endangered the entire economy,” Obama said. More than 200 new rules, governing everything from credit card fees to derivatives, would be implemented. An agency dedicated to protecting consumers would be created, under the Federal Reserve.
Twelve months later, many provisions of the bill remain stuck in a regulatory morass. The Consumer Financial Protection Bureau is still without a leader. And, most important, the business closings, job losses and foreclosures have continued. Millions are still feeling the pain of the economic downturn.
Since July 2010, almost 3 million properties have received foreclosure filings, according to RealtyTrac. Since the start of the recession, the economy has lost more than 6 million jobs. There are now 14 million people officially unemployed, and at least another 6.5 million who have given up looking for work. The pain is not spread evenly: Just over 8 percent of whites are unemployed compared to more than 16 percent of African-Americans. Nearly a quarter of work-eligible teenagers are unemployed.
Of those Americans who have jobs, many are living close to the margins. What little job growth there has been is concentrated in low-wage industries. The gains in homeownership made during the boom years have been all but erased; home ownership is at its lowest level since 1998; and the gap between white and black homeowners is now larger than in 1994.
No facts or figures can convey the impact of those lost jobs and lost homes on people and their communities. The Investigative Reporting Workshop and New America Media have teamed up for stories on both coasts. In California, we profile homeowners who have been devastated by the loss of their homes and have had to start over. In Maryland, we examine the nation’s wealthiest majority-black county, where the consequences of lost homes will ripple for generations. Two administrations have tried, and largely failed, to stop the bleeding in the housing market. And despite decades of promises, the American dream is increasingly out of reach.