The United States economy took a major hit on September 12, 2001. Many stocks crashed and consumers lost faith in various industries. Since September of 2001, a variety of industries in the United States have been hit very hard. One of the first industries to begin laying-off workers was the airline industry, which began in late 2001, early 2002. Following the airline industry into a downward spiral were the financial (including banking), automobile, housing (including real estate), and most recently lawyers. According to a bankruptcy attorney, there are fewer people in the "Lone Star" state who have to file because the state is doing pretty well in terms of keeping jobs, since it is home to many industries that have not have been hit as hard as others. In fact, bankruptcy is relatively low compared to a majority of other cities throughout the nation. Below, we will take a look at the major catalyst for the decline in these markets and how it has affected the American people.
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1. The airline industry was, of course, directly affected by the events of September 11, 2001. A majority of Americans did not want to fly anymore and they lost confidence in the airline industry itself and its ability to protect Americans from terrorist attacks. Most airlines had major layoffs beginning in late 2001 and early 2002. There was also a pilot strike in the 2000s, which left the industry almost broken. However, even though the airline industry is still not what it was before September 11, it is moving forward towards some type of recovery.
2. The financial industry started to go downhill after the Enron Corporation was exposed for fraud and deceiving its' stockholders. Again, consumers lost faith in their investments and companies that were doing the investing. Since Enron, other major financial companies have faced similar charges of deception and fraud.
3. Because many people have either lost their jobs or cannot find jobs to begin with, the housing market has taken a hit. The housing market is very complex in the sense that not only are people unable to buy homes because they have less money, but also the banks made bad investments in people by giving out loans to people who could not afford to pay their mortgages once the economy took a turn for the worse. Now, to recover some of the money they lost, banks are no longer lending as much and therefore are limiting the amount of money they loan to consumers for homes.
4. More recently, the automobile industry has struggled partially because of major product recalls and partially because they had to accept tax payer money in the form of a "bailout." Of course, consumer confidence in the automobile industry has decreased dramatically because of the recalls and because consumers watched as more and more companies came forward for bailout money.
5. Currently, lawyers have either lost their jobs and many recent graduates are also unable to find positions. Because thousands of college graduates are unable to find jobs, they are staying in school to earn a graduate degree. Now, there is a surplus of lawyers and not enough jobs to go around. This will be a problem for decades as the number of people who are attending law school is increasing, while the amount of jobs available are either staying the same or decreasing.
If the above information can tell us anything, it is that when consumers lose faith in an industry, the company should brace for hard times. Consumers are what drive all industries and when consumers and investors lose confidence in any given company, there will be severe consequences. In order to start solving the problems of many of these industries, companies must attempt to gain consumer trust and confidence in order to move forward.
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