It’s been less than two years since it seemed the world was on the brink of an economic catastrophe. The boomer generation that embraced the Freedom 55 rallying call watched in horror as the value of retirement savings and pensions dropped with the speed of a lead balloon.

It was supposed to be the “Great Recession” that threatened to rival the “Great Depression” of the 1930s. But with the release of marginally positive data for the fourth quarter of 2009, the United Kingdom was the last of the developed economies to register a return to growth. Most claim the crisis is over, even with the recent bail-out of Greece. But is it really?

In this paper, economist Don McIver examines the crisis and the consequences. In Who Could Have Seen THAT Coming? The History and the Consequences of the Global Crisis, McIver asks a number of the incompletely answered questions concerning the financial and economic chaos of the past several years. Starting with an examination of what happened, he also examines whether the crisis was predictable, whether the economic consequences were avoidable, whether improved regulation can prevent a recurrence and were the responses appropriate.

The answers are not as clear-cut as most people want. McIver provides a easily digested history of the crisis and explores the true consequences that you won’t read in the headlines.

He writes, “Given the evident trepidation at the height of the panic, the recovery is more painless than anticipated—but the longer-term prospects leave no grounds for complacency.”

McIver’s paper concludes:


  • The financial crisis of 2007-2009 was nowhere near as predictable as some would like to believe. The causation is ambiguous.
  • The linkage between financial chaos and economic disruption is uncertain, and the recovery in this instance has proved more resilient than many feared.
  • The performance of regulatory bodies was lacking, but their capacity to have done much better is constrained.
  • There is a significant risk that the longer-term consequences, especially of the rapid-response efforts to stabilize a perceived economic/financial calamity, will prove significant.