September 15^th marked the 5^th anniversary of Lehman Brother’s bankruptcy filing, a sobering event that has been discussed at great length as of late. Has time helped change our perspective of the worst economic recession in U.S. history outside of the Great Depression?

The roots of the Great Recession, like any recession, begin long before it actually began. The earliest beginnings of it started after the dot-com bubble burst at the turn of the millennium. People stayed away from tech companies in general but specifically web-based ones (especially those without explicit revenue behind their growth) and began to turn to more time-tested positive return markets, among them the housing market. Granted, the housing market had been growing for decades prior to the burst of the dot-com bubble, but it continued its ferocious climb upward until it peaked in 2006. All seemed to be well, but thanks to the sharp lens of hindsight we knew that sense was dreadfully wrong.

The year 2007 showed the first signs of a problem when New Century Financial Corporation, a major subprime lender, filed for bankruptcy in April. In October of the same year, the DOW peaked, and in December, the long recession began. A recession was not unexpected, and there were no major signs of trouble at that time. The unemployment rate stood at 5%. But time would tell a different tale.

In February 2008, President George W. Bush signed the Economic Stimulus Act after the Fed had reduced interest rates from 5.25% to 3% over just four short months two weeks prior. It became apparent the recession was not the ‘typical’ recession that followed economic booms when Bear Stearns collapsed in mid-March and the Fed brought interest rates down to 2% at the end of April. Anxiety began to set in.

On September 7^th, the federal government made an unprecedented move by taking over Fannie Mae and Freddie Mac, two large mortgage companies who are government-sponsored entities, which means that the government does not have to back them if they start to fail. Nevertheless, the government chose to do so.

On September 15^th, everyone’s worst fears were confirmed when Lehman Brothers broke a record that no one wanted to see fall: they filed for bankruptcy, the largest ever in U.S. history. The following morning did not allow for a silver lining when the Fed bailed out AIG, a firm who was reportedly ‘too big to fail.’

A couple weeks later, President Bush signed into law the Troubled Asset Relief Program (TARP), a program equipped with $700 billion of relief. The following week, the DOW suffered its worst weekly loss in history of 1,874 points. Over the remaining two months, the federal government bailed out Citigroup, General Motors (GM), and Chrysler, and on December 16^th, the Fed lowered the benchmark interest rate to zero, the first and only time since it has ever done so.

In 2009, the government bailed out Bank of America, GM filed for bankruptcy, and the unemployment rate peaked at 10 percent in early October. The recession officially ended in June of 2009, as the definition of a recession is two consecutive quarters of negative GDP growth. But the financial woes did not stop there.

In 2010, yearly house foreclosures hit an all-time high with 2.9 million properties being foreclosed. In 2011, Standard & Poor’s downgraded the U.S. government’s credit rating from AAA to AA+, something no one thought would ever happen.

Hindsight, of course, offers us 20/20 vision, a luxury decision makers did not have while monstrous companies were collapsing and people were losing their jobs and fortunes left and right. But forsaking an analysis would also be foolhardy; learning from mistakes is essential. Thus presents the question of whether or not there was something the United States government, companies, and people could have done to lessen the severity of the recession, or even, perhaps, avoid it altogether.

The lessons learned from the burst of the dot-com bubble were relatively straightforward and can be summed up in one now-followed rule: don’t invest in companies that are not tracking growth by revenue. Looking back, it seems a rather absurd idea that someone would invest in a firm that is not producing revenue. The Great Recession’s cause, however, was a bit more complex.

There were a few points of great contention across America about the government’s actions to help the recession end. Perhaps the biggest point of argument was over the idea of ‘too big to fail’ companies, firms whose failure would allegedly be ‘too catastrophic’ since their size and interconnectedness would send massive ripples throughout the entire economy. Perhaps there are firms that are too big to fail. If that is true, will we find ourselves in another grave situation as the Great Recession? Alan Greenspan, longtime Federal Reserve Chairman said, “If they’re too big to fail, they’re too big.’ Greenspan added, “In 1911 we broke up Standard Oil—so what happened? The individual parts became more valuable than the whole. Maybe that’s what we need to do.”

The Great Recession tested the limits, resolve, and rationale of every investor and job-holder. It is an ominous reminder of the need to assess the dangers of each investment, not just in the short run or even in the next few years, but how the economy as a whole could be affected. Only time will tell if America has heeded the warning of the Great Recession.