Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

For Geithner the “populist fury” of the “atonement agenda” was a dangerous distraction from the tough-minded technical business of addressing a crisis.44 But the grief and distress caused by the crisis were forces to be reckoned with. They ran through American society in waves, and early 2010, as Dodd-Frank reached a critical point in its labored passage through Congress, was one such moment. Three years since the real estate bubble burst, the full effects of the credit crunch and mass unemployment were making themselves felt. Between 2007 and 2009, 2.5 million homes had been foreclosed and the crest had not yet been reached. As 2010 began, 3.7 million families were more than ninety days past due on their mortgage payments. Millions more were struggling to make ends meet, one or two months behind on their payments. Over the next twelve months 1.178 million homes would slide into foreclosure, the worst year of the crisis. With prices still falling, ever more properties were sinking into negative equity. As one analyst remarked in early 2010: “We’re now at the point of maximum vulnerability. People’s emotional attachment to their property is melting into air.”45 In the worst-hit areas, such as Florida, fully 12 percent of properties were given up by their owners or seized by banks for foreclosure. Foreclosure proceedings were operating at such a pace that they were given over to quasi-automated legal processes that turned out to be ruinously flawed. In a nightmarish administ...