A look back on ten tough years for the economy

A foreclosure sign is shown through a front gate of a home in Oakland, Calif.
A foreclosure sign is shown through a front gate of a home in Oakland, Calif. Paul Sakuma / AP

From Enron to Madoff, bear markets to financial crises, bubbles to bailouts, jobless recovery to double-digit unemployment — this has been an economically brutal first decade for the new millennium.

It has bred doubt about the resilience of the American economy. It has stirred calls to dust off New Deal designs.

It has turned our world upside down.

After all, the 1990s were a jobs machine, a deficit destroyer, a stock market utopia. We even deflated the Y2K threat.

It seems now that all those zeros on our new calendars were trying to warn us about the encroaching fleet of financial Hindenburgs.

The boom in technology stocks burst like a bubble, precipitating three years of falling 401(k) accounts.

Terrorist attacks shuttered the stock market for four days, devastated the airline industry and prolonged the decade's first recession.

We recovered. But then we inflated and popped a housing bubble that reverberated as a credit crisis, threatening to pull down the entire financial system.

In crisis, we embraced unprecedented government intervention, which means Americans still own car companies and financial giants but do it through the U.S. Treasury instead of their retirement accounts.

Kansas City has muddled through, but not without its own pains.

During the decade, Sprint Nextel Corp. shed two-thirds of its Kansas City area employees. Home builders folded. Banks failed. Trucking giant YRC Worldwide Inc. slowed to a crawl.

As we begin the next decade, the worst recession since the Great Depression is finally flashing early signs of recovery. Housing markets have found some stability, industrial production and manufacturing have rebounded, and the stock market has bet heavily on growth.

But even Federal Reserve Chairman Ben Bernanke recently warned that "important headwinds" will keep the recovery weak. Get used to diminished opportunity, blunted wages and prolonged idleness.

"Will that fundamentally alter the confidence of the public in the economic system in general and the financial system in particular? That has yet to be answered," said Joseph Brusuelas, a director at Moody's

Americans aren't sure yet that they trust federal fixes. But this moment of doubt has raised the key economic issue of the coming decade.

What should government do next — step back, or step up to a larger and lasting role in the economy?

"This is pretty much a polarized split, down the middle," said Art Hall, executive director of the Center for Applied Economics at the University of Kansas. "It's hard to be a moderate in this debate."

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