The Subprime mortgage crisis in 2008, which rocked the financial market in the United States causing ripple effects across continents resulting in millions of employees losing their jobs, also resulted in many desperate attempts by former “white collar” workers to make ends meet.
Many employees of capital markets who were laid off, were compelled to seek different career paths to sustain themselves and their families.
“I had no option but to start something on my own. We became redundant and had to survive, so we had to find ways of surviving,”said Leo De Martino, 52, the proprietor of DiLeo’s Pizzeria on Victory Blvd on Staten Island.
The subprime mortgage crisis in 2008 resulted in over 50 million jobs being lost worldwide and global unemployment increasing by $8.9 million or 7.4percent, according to a study conducted by the World Bank.
The fall in US markets had an extremely harmful effect on capital markets across the globe with the worst affect being South East Asia.
“I was a trader in Wall Street and had been one for over 30 years. Following the crisis many of the companies wanted to cut down on costs and many of our functions were removed. This resulted in thousands of us losing our jobs,” explained De Martino.
De Martino while being careful not to identify his former employer, said that the laying off resulted in him having to fend for himself and his family which includes four young children.
“I had to do something and we started the Pizzeria. It’s been about 5 years since I opened this and business is picking up” he said.
A United States labor department report estimated that over 2.6 million Americans were laid off following the crisis with unemployment rates rising to 7.2 percent, the highest since World War II.
“The crisis could have been averted if not for the greed of a few. The many who suffered as a result of this were those who had no clue as to what was going on. It was the big multi-million dollar traders who indulged in many illegal and unethical practices resulting in the crisis,” said Dev Asanga, a Financial Analyst and Business Development officer at Brandix.
Brandix one of the largest exporters of garments has a New York based operation room through which the Company deals with American markets.
“We all took a hit. If the American markets don’t have money, or if the consumer is cash strapped that means everything comes to a standstill. So we always have to keep an eye on capital market trends,” he said.
However, now, with the added benefit of hindsight, some argue that the crisis which resulted in harsh economic outcomes for millions of dependents was a result of the capitalist mode of transaction.
Quincy Saul an analyst and activist of Eco- Socialist Horizons said the blame lay elsewhere.
“Why are we even surprised?” he asked.
“Capitalism is based on power, greed and profit. It’s a dog-eat-dog world that we have embraced, so this is inevitable. It will happen again and again because the structure of the capital markets are flawed. There are fundamental inequalities in the distribution of wealth, inequalities in opportunity and access to wealth and there is rampant exploitation. That is what people have to understand. The fundamental structures are flawed,” he said.
Saul further opined that until there is a shift in the institutions and structures of financial markets, this would not be the last crisis the world would witness.
“I don’t understand how and why people could think these [Capital markets] could be reformed. They can’t. Reform can only result in delaying the next crisis, not prevent it,” he said.
Alan Greenspan the former Chairman of the Federal Reserve(1987-2006) speaking before the a Congress Committee on Oversight and Government reform in the wake of the crisis in October 2008.
“Yes, I found a flaw, That is precisely the reason I was shocked because I’d been going for 40 years or more with very considerable evidence that it was working exceptionally well,” he said.
For those like De Martino, however, the admissions and clinical analysis seem too little and far too late.
“Those two guys who left [the Pizzeria] they also worked with me and they also like many of us were left high and dry,” he said, the signs of his old life never too out of sight from his new life. “Starting the Pizzeria was like asking a software programmer to work on a mine. I didn’t know a thing about this and had to start right from the bottom all over again.”