How Bad Was It?

The Federal Reserve Bank of Dallas has always produced superior—and often iconoclastic—analytical work, chiefly because of the inspired leadership of its governor, Richard W. Fisher.  (Among other things, Fisher has been a vocal skeptic of quantitative easing, and also thinks we should consider breaking up the big banks.  This does not make him popular with Obamaworld.)

The latest piece of research worth taking in is the new report entitled “How Bad Was It? The Costs and Consequences of the 2007-09 Financial Crisis,” by Fed analysts Tyler Atkinson, David Luttrell, and Harvey Rosenblum.  (You can download the PDF from the Dallas Fed’s home page.)  The report is quite accessible as these economic reports go, and it makes for sober reading.

How bad?  Super Bad.  The Great Recession may have cost the U.S. as much as $14 trillion in lost output—essentially an entire year’s worth of output.  The two charts below from the report show how the economy continues to perform poorly.

With the news out yesterday that the economy continues to grow at an anemic rate (with talk that we may even be headed back into recession next year), this analysis ought to be causing Washington to look at every corner for things to juice growth (like Keystone XL, etc).