NEW YORK – For many, if not most, Americans, the crisis that befell them in 2008 – leading to slow growth, rising unemployment, and high anxiety among voters – appeared to spring from nowhere. Certainly, the vast majority of economists, investment analysts, financial firms, and regulators failed to see the growing risk. In fact, it had deep roots.
While the precise timing of any crisis is impossible to predict, ample signs of rising risk, distortions, structural problems, and imbalances could be seen by anyone who took the time to interpret a decade’s worth of mounting debt, low savings, surging asset prices, and excess consumption. The United States was on an unsustainable growth path for at least a decade – probably longer – before the crisis.