This month marks the 10 year anniversary of our financial system buckling under the weight of big lending. The crash set off the worst economic crisis since the Great Depression, with millions of Americans losing their homes, jobs and savings. While the debate is still going on as to whether policymakers did enough to prevent this meltdown from being even worse, are our policy makers doing enough right now to keep another crisis from happening?
According to Harvard Historian Nancy Koehn, we are very vulnerable again, and we're finding ourselves in a similar setup as in 2008: the rise of right-wing leaders around the globe, and the decline of protective financial measures.
"It wasn't an American financial crisis, it was a global financial crisis, and the rise of right-wing leaders and their popularity in all kinds of places, Italy, Eastern Europe and the United States is directly traceable, at some very important levels, to the financial crisis, in those places as well as here," Koehn said during an interview with Boston Public Radio Wednesday. "The same things that got our economy and the world economy into this terrible moment, from which most Americans have not yet recovered financially — not to mention emotionally or socially — are still in place."
According to Koehn, that means things like fewer, larger and more interconnected banks, and the decline of things like Dodd-Frank legislation or specific limitations on what banks can do in terms of trading funds.
"At the same time, the world economy is sloshing around in large amounts of debt, both at public and private levels... and we have a federal reserve system and an administration that does not necessarily have the same will to do the kind of triage... [the bailout] that prevented it from getting even worse," Koehn said.
Nancy Koehn holds the James E. Robison Chair of Business Administration at the Harvard Business School. Her latest book is "Forged in Crisis: The Power of Courageous Leadership in Turbulent Times." To hear her full interview, click on the audio player above.