2008 Flashbacks: The Signs of Another Economic Crisis
New economic growth is achievable; we just need to unfreeze clean energy funds
The jobs report is in, and it’s not good. In August, the economy added only 22,000 jobs—far fewer than expected—and for the first time since the pandemic, we’ve seen net job losses. This comes as more Americans are now looking for work than jobs available, and the recent Fed Beige Book found that prices are rising across the country due to tariffs.
Mass federal worker layoffs, farmers in crisis from tariffs and halted food aid, young people struggling to break into the workforce amid AI disruption, and higher energy costs impacting homeowners and businesses alike are compounding our economic strain. Big tax breaks and direct taxpayer ownership have yet to stop U.S. corporations from laying off workers and shipping jobs overseas. At the same time, Americans are being pushed off safety nets like Medicaid and SNAP, and state budgets are starting to crack.
I worked in the U.S. Senate during the 2008 Great Recession and remember how fast the economic dominoes fell. One day, the economy was lagging, and the next, we were on the brink of another Great Depression. I hope I am wrong, but today’s economic environment feels bigger than a bubble—it’s giving me 2008 flashbacks.
The good news is that the Administration can act now to soften the economic decline. Ending its vendetta against clean energy and releasing IRA and BIL funds to ready-to-go projects (which already have contracts with the U.S. government) would create jobs, deliver much-needed energy, and strengthen U.S. competitiveness. For example, unfreezing the Solar for All, ports, and offshore wind projects recently halted by the Trump Administration are just a few examples of where a quick call from OMB could unleash billions of investments into our economy.
Despite the clear opportunities to counter the weakening economy, I do not expect the Administration to change course on its own. Congress can—and must—step in to end the Administration’s unlawful spending stance and force agencies to release funds already appropriated. The power of the purse belongs to Congress, yet so far, the Republican majority refuses to use it, allowing the Administration to stall economic development when we need it most.
Perhaps the weak job numbers will finally give Congress the courage to flex its spending authority over the Administration. Or perhaps not. The upcoming spending battle will be a good place to see if courage has been found.
- Laura Gillam, President and Founder of ResilientPath Strategies
Former OMB Assistant Director for Climate, Environment, Energy, and Science Programs and Former Senate Environment and Public Works Committee Senior Advisor for Climate and Clean Air