What's Changed Since the 2008 Recession?

Summary

WSJ Your Money Briefing

Episode: What's Changed Since the 2008 Recession?
Date: March 28, 2018
Host: J.R. Whalen
Guest: Cesare Podkul (Wall Street Journal Reporter)

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Brief Overview

This episode marks the 10-year anniversary since the end of the 2008 financial crisis. Host J.R. Whalen is joined by WSJ reporter Cesare Podkul to discuss what has changed—and what has not—in the U.S. economy, banking sector, and financial regulation since that time. The conversation covers the uneven recovery, shifts in regulatory policy, the rise of new risks (like cryptocurrencies and student loans), and the persistent erosion of public trust in the financial system.

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Key Discussion Points and Insights

1. The Economic and Banking Recovery since 2008

• Stock Market vs. Bank Stocks:
  • The overall stock market has soared since the crisis, but bank stocks lagged behind until the 2016 presidential election.
  • After President Trump’s election—on a platform promising to dismantle Dodd-Frank regulations—bank stocks experienced a notable rally, surpassing pre-crisis highs.
  • Quote:

    "They were kind of lagging the overall market. And then President Trump got elected, promising to take apart the Dodd Frank financial overhaul bill ... and once that happened, bank stocks had a big pop..." (Cesare Podkul, 02:52)

• Power of Major Banks:
  • Big banks remain highly influential in Washington, with many government positions filled by banking industry veterans.
  • The industry’s practices have not fundamentally changed; some believe it’s “business as usual” despite the crisis.
  • Quote:

    "...the big banks are more powerful in Washington than ever. ... The revolving door, which was always a problem in Washington, seems to be spinning faster these days." (Cesare Podkul, 03:24)

2. Income Inequality and Recovery Disparities

• Uneven Gains:
  • Median household income (adjusted for inflation) has barely increased since 2008—up just 5.3%.
  • Federal Reserve stimulus—trillions in bond buying—boosted asset prices, disproportionately benefiting the wealthy who hold assets.
  • Result: Widened income inequality.
  • Quote:

    "...the wealthy more often own real estate and assets like stocks and bonds... So it really helped them, much more so than people on the bottom end... 10 years later, income inequality has widened..." (Cesare Podkul, 04:16)

3. Have We Learned from the Crisis? The Crypto Parallel

• Behavioral Lessons:
  • After the 2008 crisis, there was hope people wouldn’t repeat risky financial behaviors.
  • The rise of Bitcoin and cryptocurrencies signals new “bubbles” bred from distrust in institutions birthed from the crisis itself.
  • Quote:

    "The interesting thing about bitcoin and cryptocurrencies ... is that they were born out of this distrust in the government and the financial sector that took hold after the crisis." (Cesare Podkul, 05:07)

4. The Student Loan Issue—A New Looming Crisis?

• Explosive Student Loan Growth:
  • Unlike other consumer debts, student loan balances have only increased post-crisis—now over $1.3 trillion.
  • Student loans have overtaken credit cards and auto loans in total outstandings.
  • Many young people are unable to repay, drawing comparisons to the subprime crisis.
  • Quote:

    "...student loans, it just kept going up, up, up, up, up ... And so it's now over $1.3 trillion. ... It's really a huge area of borrowing for young people and many of them can't repay these loans." (Cesare Podkul, 05:52)

5. Regulatory Reforms and Future Risks

• Regulatory Oversight:
  • Agencies like the Office of Financial Research have been created to monitor risk, with a greater focus on field examiners and bank scrutiny.
  • Cybersecurity is now a flagged risk—one not present a decade ago.
  • Weakness remains in proactive prevention rather than detection.
  • Quote:

    "Washington in general is trying to keep an eye out for potential risks. ... One of the risks they do flag is cybersecurity, which is something we didn't have to deal with 10 years ago." (Cesare Podkul, 07:04)

• Regulatory Rollback:
  • There’s uncertainty about whether increased oversight will persist amid promises of regulatory relief from the current administration.

6. The Ongoing Crisis of Trust (and Data Breaches)

• Trust Not Recovered:
  • Public trust in the financial sector remains lower than before 2008, despite the recovery of bank stocks.
  • Recent data breaches (e.g., Equifax, Facebook) highlight that companies have more personal data but may not safeguard it effectively.
  • Quote:

    "...trust in the financial sector isn't back. ... If you look at bank stocks, they've soared. But consumers trust in the financial sector in general is still not there." (Cesare Podkul, 08:10)

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Notable Quotes & Memorable Moments

• On bank power and reform:

  "Big banks are more powerful in Washington than ever." (03:24, Cesare Podkul)

• On the uneven recovery:

  "Income inequality has widened in this country." (04:16, Cesare Podkul)

• On new financial risks:

  "There's never going to be an end to crises. There's always going to be other crises." (05:07, Cesare Podkul)

• On student loans:

  "It's now over $1.3 trillion... Many of them can't repay these loans. So that's a huge potential red flag for consumers and the economy." (05:52, Cesare Podkul)

• On regulatory weaknesses:

  "The weakness may be in ... putting together, you know, procedures, rules, protocols ... So I think that's still where the weakness lies." (07:04, Cesare Podkul)

• On consumer trust:

  "Trust in the financial sector isn't back ... 10 years later, trust ... isn't back." (08:10, Cesare Podkul)

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Timestamps for Key Segments

• Stock Market and Bank Recovery: 02:52–03:13
• Banking Industry Power and Lack of Reform: 03:13–04:02
• Disparities in Economic Recovery & Income Inequality: 04:02–04:52
• Risky Behavior and Cryptocurrencies: 04:52–05:43
• Student Loan Debt Crisis: 05:43–06:50
• Regulatory Oversight & Risks: 06:50–08:02
• Data Breaches & Lack of Trust: 08:02–08:46

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Conclusion and Takeaway

A decade after the 2008 recession, while markets and banks have recovered, fundamental challenges persist—especially around inequality, regulation, and trust. New risks, from cryptocurrencies to student debt and cyber breaches, may be forming the seeds of tomorrow’s crisis. The conversation concludes with the sobering reminder that despite all reforms, true resilience will depend on how society manages the next inevitable shock.

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End of Content Summary

Transcript

[A]

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[B]

one most trusted app based on August 2025 proprietary survey. Over 500,000 new listings every month based on average new for sale and rental listings July 2024 to June 2025 your money briefing Money and market stories from the Wall street journal. I'm J.R. whalen in New York. What's changed since the end of the financial crisis in 2008? What stayed the same? We'll take a look in a moment. But first these money items you need to know. US Consumer confidence fell in March, dragged down by consumers perception of current and future economic conditions in light of recent stock market gyrations, Tuesday's report showed consumers remained optimistic toward the state of the labor market which has shown strength recently. With the UNEM parked at a 17 year low and the economy adding jobs at a steady pace, banks can expect to see significant further relief from post Crisis rules in 2018 after the final Trump appointed leader is seated at the nation's banking regulators later this spring. Jelena McWilliams is currently set to take over the top spot of the FDIC and when that happens, the fdic, the Federal Reserve and the Office of the Comptroller of the Currency will be able to move ahead on things like adjusting capital and liquidity requirements, also easing restrictions on short term consumer lo loans and relaxing the so called Volcker Rule, which bars banks from speculative trading or buying into potentially risky investment funds. And US Investment banks in London have some of the biggest gender pay gaps in the country, reflecting long established cultures of men dominating the top trading and advisory roles and women working in junior posts or as administrators. Women are paid about half as much as men in the main UK investment banking units of bank of America, JPMorgan Chase and Morgan Stanley, marking the widest gaps among around 40 global financial companies that have reported pay data to the UK Government. All three banks pledged to improve the figures by supporting and encouraging women to climb their way to senior positions and welcoming back women who leave the workforce to have children. This is your Money Briefing from the Wall Street Journal. Welcome back everybody. Almost daily stock market volatility A new president some say is untested in the face of economic Uncertainty cries of income inequality. That's not necessarily today's news. That was the state of the country ten years ago at the end of the financial crisis. Wall Street Journal report. Cesare Podkol joins us to look back and look ahead. So, Cesare, in 10 years, the stock market has seen an astronomical run up. But it's interesting that bank stocks were stuck somewhere between neutral and drive until President Trump took office.

[C]

Yeah, it's a very interesting chart. They were kind of lagging the overall market. And then President Trump got elected, promising to take apart the Dodd Frank financial overhaul bill that Congress put in place to deal with many of the excesses from before the financial crisis. And once that happened, bank stocks had a big pop and now they're above where they were as of early 08.

[B]

But the big banks are still very powerful, and many feel they did not learn lessons from essentially looking death in the face and paying $110 billion in penalties and then reforming their ways.

[C]

Yeah, certainly you can make the case that the big banks are more powerful in Washington than ever. I mean, some of the highest echelons of government are now filled with former employees of firms like Goldman Sachs. And the revolving door, which was always a problem in Washington, seems to be spinning faster these days. So we detailed that in our comparison of where we are 10 years later. And so, yeah, there's people like Phil Angelides, who chaired the official government inquiry into the causes of the financial crisis, who say that this is not an industry that has really examined itself and changed its ways in fundamental ways. In many ways, it's sort of business as usual on Wall street and in many ways in Washington.

[B]

Now you could say looking at 2008 versus today, the more things change, the more they stay the same. A lot of money's flooded the market and the economy, though the recovery has really been uneven since 2008. Median household income only up 5.3%.

[C]

Yeah, when you adjust for inflation, median household income has barely budged since 2008. And the stimulus that the Federal Reserve created to help get the economy going again, which is trillions of dollars of bond buying, that helped drive up asset prices and certainly helped fueled a recovery in real estate. But if you think about it, the wealthy more often own real estate and assets like stocks and bonds in a portfolio. So it really helped them, much more so than people on the bottom end of the scale who lost their jobs. And the result is that 10 years later, income inequality has widened in this country.

[B]

There's a quote in the feature in the Wall Street Journal, you Provided reporting on and that's that people are not going to be that stupid again making ill advised decisions that could get them into financial trouble. And yet some point to the current bitcoin craze. Has anybody learned their lesson?

[C]

Yeah, that's a good question. The more things change, the more they stay the same. The interesting thing about bitcoin and cryptocurrencies in general is that they were born out of this distrust in the government and the financial sector that took hold after the crisis. So in a way there's sort of a direct link between that and the crisis. As to whether people will learn their lesson this time remains to be seen. But crises, there's never going to be an end to crises. There's always going to be other crises. And one of the things we try to do in this feature is to where the areas of risks are. And certainly cryptocurrencies are one area that many people are looking at as a potential bubble.

[B]

And there's another one, another crisis on the horizon, some dark clouds moving in that a lot of folks may not really focus on. That you do in the story, and that is the student loan problem.

[C]

Yeah, the student loan problem is really one of the most fascinating aspects of all of this. If you look at just the overall trend in consumer debt since the 2008 crisis. You know, credit cards took a dip and aren't coming back. Auto loans, you know, sort of picked, fell and picked up. Everything had that sort of, you know, peak and trough. But then if you look at student loans, it just kept going up, up, up, up, up, up, up, up. And nothing ever, you know, it just never took a pause. And so it's now over $1.3 trillion. You know, since the crisis, student loans have overtaken credit cards and auto loans. It's really a huge area of the borrowing for young people and many of them can't repay these loans. So that's a huge potential red flag for consumers and the economy coming up. And it's going to be interesting to see how this plays out because it definitely has many similarities to the subprime crisis from pre 2008.

[B]

And you also look at another red flag and that is the regulatory business here in this country. And has it reformed enough to the point where it could oversee and project a crisis coming and be able to handle it?

[C]

We do have an Office of Financial Research at the US treasury now that's supposed to keep an eye out for potential risks in the economy. We had a story, our colleague in Washington, Ryan Tracy, had a great Story on that the other day. Washington in general is trying to keep an eye out for potential risks. One of the risks they do flag is cybersecurity, which is something we didn't have to deal with 10 years ago. So Washington is more on the lookout for these potential risks. But the weakness may be in actually, you know, getting ahead of them and putting together, you know, procedures, rules, protocols, whatever to deal with them. So I think that's still where the weakness lies. But in general, there is more oversight. You know, there's more. The Federal Reserve has more bank field examiners out there. Banks are certainly under more scrutiny. Whether that's going to, to stay there or be dismantled in this regulatory rollback that some in Washington have been promising is anyone's guess. But you know, it's definitely, banks are definitely under more scrutiny today than they were 10 years ago.

[B]

And speaking of cybersecurity, there still is a crisis of trust in the economy. Just look at the Equifax mess in the data breach.

[C]

That's one of the big potential areas of risk is companies have more data than ever before on individuals, and it's not quite clear that they are good at safeguarding that. We've seen that last year with the Equifax. Now Facebook is of course embroiled in the controversy regarding its data privacy measures. This is a clear indication that 10 years later, trust in the financial sector isn't back. That's one line that hasn't made its way back up to pre 2008. If you look at bank stocks, they've soared. But consumers trust in the financial sector in general is still not there.

[B]

All right, that is Wall Street Journal reporter Cesare Podkul joining us here in our studio. Cesare, thanks for being with us.

[C]

Thanks for having me.

[B]

And that's your money briefing. I'm JR Whalen in New York for

[D]

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