CLE Materials for Panel #1 - George Washington University Law ...

WILMARTH
4/1/2011 1:11 PM
960 OREGON LAW REVIEW [Vol. 89, 951
equal to a year of the world’s gross domestic product. 20 Household
net worth in the United States fell by more than one-fifth (from $64.2
trillion to $48.8 trillion) from the end of 2007 through the first quarter
of 2009. 21 The financial crisis pushed the economies of the United
States, the United Kingdom, and other European nations into deep
recessions during 2008 and the first half of 2009. 22
Economies in all three regions began to improve in the second half
of 2009, but the recoveries were tentative and fragile. 23 During the
first half of 2010, economies in all three areas continued to face
significant challenges, including (1) high unemployment rates and
shortages of bank credit that caused consumers to reduce spending
and businesses to forgo new investments, and (2) large budget
deficits, caused in part by the massive costs of financial rescue
programs, which impaired the ability of governments to provide
additional fiscal stimulus. 24
20 Shamim Adam, Global Financial Assets Lost $50 Trillion Last Year, ADB Says,
BLOOMBERG (Mar. 9, 2009), http://www.bloomberg.com/apps/news?pid=newsarchive
&sid=aZ1kcJ7y3LDM.
21 BD. OF GOVERNORS FED.RESERVE SYS., FEDERAL RESERVE STATISTICAL RELEASE:
FLOW OF FUNDS ACCOUNTS OF THE UNITED STATES: FLOWS AND OUTSTANDING,
SECOND QUARTER 2010, at 104 tbl.B.100 (2010), available at http://www.federalreserve
.gov/RELEASES/z1/20100917/z1.pdf.
22 See INT’L MONETARY FUND, WORLD ECONOMIC OUTLOOK, APRIL 2009: CRISIS
AND RECOVERY 1–96 (2009), available at http://www.imf.org/external/pubs/ft/weo/2009
/01/pdf/text.pdf. A recent study concluded that the recession of 2007–2009 was much
more severe, both in the United States and globally, than the preceding recessions of 1975,
1982, and 1991. Stijn Claessens et al., The Global Financial Crisis: How Similar? How
Different? How Costly? 3, 19–20 (Mar. 17, 2010) (unpublished manuscript), available at
http://ssrn.com/abstract=1573958; see also Steve Matthews, Longest U.S. Slump Since
’30s Ended in June ’09, Group Says, BLOOMBERG (Sept. 20, 2010), http://www
.bloomberg.com/news/2010-09-20/u-s-recession-ended-in-june-2009-was-longest-since
-wwii-nber-panel-says.html (reporting that, according to the National Bureau of Economic
Research, the U.S. economy “shrank 4.1 percent from the fourth quarter of 2007 to the
second quarter of 2009, the biggest slump since the 1930s”).
23 INT’L MONETARY FUND, WORLD ECONOMIC OUTLOOK, OCTOBER 2009:
SUSTAINING THE RECOVERY 1–92 (2009), available at http://www.imf.org/external/pubs
/ft/weo/2009/02/pdf/text.pdf; Timothy R. Homan, U.S. Economy Grew at 2.2% Annual
Rate Last Quarter (Update2), BLOOMBERG (Dec. 22, 2009), http://www.bloomberg
.com/apps/news?pid=newsarchive&sid=aVeAMaVRygoM (reporting that the U.S.
economy grew during the third quarter of 2009 “at a slower pace than anticipated”
following a steep decline during the previous year); Marcus Walker & Brian Blackstone,
Euro-Zone Economy Returns to Expansion, WALL ST. J., Nov. 14, 2009, at A6 (reporting
that “[t]he euro-zone economy returned to modest growth in the third quarter [of 2009],
marking an apparent end to five quarters of recession, but the region’s recovery looks set
to be anemic”).
24 Peter Coy & Cotton Timberlake, Funny, It Doesn’t Feel Like a Recovery,
BLOOMBERG BUSINESSWEEK May 31–June 6, 2010, at 9; Rich Miller, U.S. Rebound Seen