Sep 14, 2018 4 min read

Britain’s onetime prime minister Harold Macmillan is probably not a figure who rattles around in the consciousness of many Americans, unless they are viewers of the Netflix series “The Crown,” which dramatizes the reign of Queen Elizabeth II. But following two decades that were marked by war and austerity, Macmillan made the following observation about British life in 1957 that many American political leaders like to echo today:

“Let us be frank about it: most of our people have never had it so good.”

Indeed, the performance of the American economy recently has been worthy of a chorus of “Happy Days Are Here Again.” Unemployment is low, as is inflation, and growth has been steady. Sure, there are plenty of caveats to the good news, such as stagnating wages for most workers, but generally things are pretty good.

But if you feel a nagging sense of unease, if you worry that the whole edifice could come tumbling down at the first gale, you’re probably not alone. What it means is you’re probably still suffering from post-traumatic stress disorder from the 2008 financial crisis and the paralyzing Great Recession that followed. For Americans whose acquaintance with tangible hardship came mostly through hearing Depression tales from their grandparents, the Great Recession was a bucket of ice-cold water in the face. Home values plummeted, stock values went into free fall, 401(k)s were drained and more than eight million Americans lost jobs. The trauma associated with the Great Recession has been credited for everything from Britain’s decision to leave the European Union to the rise in this country of Donald Trump.

The long downturn took a while to unfold, but the Great Recession gathered force 10 years ago Saturday, when the Lehman Brothers investment bank collapsed and filed for bankruptcy. It was the largest in the nation’s history. The firm had immersed itself in the subprime mortgage market, and the downturn in real estate prices wiped out all of its capital. The federal government took a pass on bailing out Lehman Brothers, and the whole global financial system was jolted. As President George W. Bush said at the time, “This sucker could go down.” The United States and other countries were left to bail out other banks in order to prevent a total economic meltdown.

There were reforms in the aftermath of the crisis, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, which, among other things, created the Consumer Financial Protection Bureau, put stronger regulations in place for banks, and gave the federal government the authority to unwind financial institutions that go under. As with the Affordable Care Act and almost everything else President Obama accomplished, Republicans have tried to weaken or repeal Dodd-Frank in the Trump era.

That’s a shame, because we shouldn’t feel complacent when it comes to today’s sunny economy. There are any number of things that could cause storm clouds to brew.

The economy seems to have withstood President Trump’s erratic behavior. But are we one tweet away from market chaos? What happens if there’s a global trade war? Or the European Union becomes even more unstable?

Another onetime British prime minister, Gordon Brown, told The Guardian this week, “We are in danger of sleepwalking into a future crisis. There is going to have to be a severe awakening to the escalation of risks, but we are in a leaderless world.”

We have reasons to be happy with this economy. But 10 years after the financial crisis, we also have reasons to be wary.