The 2010 Hunger Report

In September 2008, the U.S. economy was brought to the brink of collapse by the greed and recklessness of some of the largest firms on Wall Street. A deflated housing bubble exposed the astonishing risks these firms had taken, enabled by government policies and policymakers that encouraged any and all forms of financial innovation, without regard for the possible consequences to U.S. or global financial systems.

A catastrophic meltdown of the economy was averted by the extraordinary intervention of the federal government in the nation’s financial markets, taking measures that would have seemed unthinkable in the heyday of the bubble years. But a government response was not enough to prevent an economy already in recession from spiraling further downward.

The crisis of 2008 led to comparisons with the financial crash on Wall Street that precipitated the Great Depression of the 1930s. Excessive risk taking was responsible for wrecking the economy then as well. But while there are similarities, there are also some clear differences, including the wider dimensions of what some have called our Great Recession.

No country, rich or poor, is an island in the global economy. In this way, the world has changed dramatically since the Great Depression. The United States, for example, imports more manufactured goods from developing countries than it does from developed ones.¹ When demand for goods dries up in rich countries, workers in poor countries supplying those goods lose their jobs. The fragile economies of these countries are severely damaged, and poor people suffer most.

The election of Barack Obama as president is another example of how profoundly the United States has changed. In addition to being the first African American to occupy the White House, Obama is the first U.S. president to grow up in a family that had to rely temporarily on food stamps to get through tough times. He promised to bring change to Washington, and his election signaled that a majority of the country agreed that change is needed. While running for president, he pledged to end child hunger in the United States by 2015, and since taking office he has recommitted to that goal. Advocates for hungry and poor people are hoping that Obama will lead a bold assault on poverty and hunger in the United States and around the world, and will do so without delay. Fixing the U.S. economy and fighting poverty and hunger are by no means separate goals.

With the benefit of hindsight during these sobering economic times, we must recognize that real wealth isn’t created by asset bubbles like the decade-long ballooning of the housing market. Many people simply should have known better. Home buyers ran up unsustainable levels of debt. Banks made loans to people who had almost no chance of being able to repay them. Investment banks securitized the bad loans and sold them to investors around the world. Investors purchased these securities without learning the risks. And policymakers in Washington legitimized all of this.

Real wealth isn’t created by wild speculation and get-rich-quick schemes that saddle future generations with debt. Fortunately, real wealth is as available to us now as ever, despite some major challenges in the years ahead. The 2010 Hunger Report, A Just and Sustainable Recovery, presents a different vision of how to create wealth than the prevailing ethos of the bubble years. It’s a vision that includes sustainable ways to reduce poverty and achieve broad-based economic growth.