Top Domestic Stories of 2008

1. PRESIDENT BARACK OBAMA

The election of Barack Obama as the first African-American President in U.S. history electrified not only the nation but also the world. Obama, his wife Michelle and their two daughters became instant celebrities. He dominated the headlines for over a month after the election by a very public Cabinet selection process.

At the same time, Obama message of sweeping change did not appeal to everybody. Inside the Republican Party, there was sudden phenomenon of Sarah Palin, who epitomized the fear felt by of so many Americans about the terrifying specters of terrorism, depression, global climate change, a flu pandemic, Islamic fundamentalism, a soaring national debt, kidnappings in Mexico, beheadings in the Middle East, the weakening dollar, and on and on.

The prospect of any or all of these as plausible developments over the coming years made many yearn for a simpler time, when homespun wisdom and grit seemed like enough for us to get by, even though it became pretty damn clear that “we aren’t in Kansas anymore, Toto.”

2. THE RECESSION

The irony for Obama is that what should have been a time of hope is instead a time of growing desperation in America. A steep rise in home foreclosures due to the sub-prime mortgage meltdown quickly cascaded into a series of bank failures and near failures, massive corporate takeovers and bankruptcies, and federal government interventions in the form of bailouts of unprecedented size and scope.

By year’s end, the domestic automakers, especially Chrysler and GM, teetered on the edge of collapse, unemployment was rising, and the credit markets were frozen. Gas prices rose to a dizzying high ($4.50/gallon) only to fall to a new low ($1.50/gallon) between July and December in the U.S. Overseas, the U.S. recession set off a global recession, demonstrating with terrible clarity just how interlinked the global economy has become.

The previous “firewalls” that tended to protect domestic economies somewhat from international events are gone, swept away by the rising tide of free trade and rising demand, especially in the emerging middle classes of China, India, Brazil and Eastern Europe.

One man, Bernard Madoff, the former head of the NASDAQ stock exchange, engineered the largest Ponzi scheme in history, ripping off $50 billion from investors, and bringing several European banks to the verge of collapse. Americans cut their holiday spending, prompting rumors that a number of major retail chains would be closing their doors for good early in 2009.

3. CIVIL RIGHTS FOR SAME-SEX COUPLES

Though it never became the national hot-button political issue that it had been back in 2004, in 2008 same-sex marriage emerged as arguably the top civil rights issue in the U.S. The decision in May by the California Supreme Court legalizing same sex marriage set off a boom of over 18,000 marriages in the state until election day, when the state’s voters overturned the legality of gay marriage via the controversial Proposition 8.

By the end of the year, the issue was mired in lawsuits, and the state Attorney General reversed himself and called for Prop. 8 to be overturned. A majority of voters indicated if they had it to do over again, Prop. 8 would have failed by a significant margin. Other states endorsing or considering same sex marriage in 2008 included Massachusetts, Connecticut, and Iowa.

Everywhere, the debate shifted to the moral and legal aspects of preventing same-sex couples from enjoying the same civil rights as everybody else. President–elect Obama’s choice of evangelical preacher Rick Warren to lead a prayer at his Inauguration provoked national protests by gay and straight groups alike. Warren quickly assured America that he “loves gays,” but the controversy illuminated some of the dangerously unstable political fault lines in Obama’s broad political coalition.

4. WEB 2.0: ANOTHER BUBBLE?

As of 2008, there were still only a handful of Internet companies with the scale to compete with Google for online ad revenue, and search market share. When one of them, Microsoft, tried to buy another, Yahoo, Google tried to undermine the deal with a search partnership, Yahoo CEO Jerry Yang rejected the Microsoft offer, Yahoo’s stock collapsed, investor Carl Icahn forced his way onto Yahoo board, Microsoft pressured the Justice Department to charge Google with antitrust violations, Jerry Yang resigned as CEO, Google ended its partnership with Yahoo hours before the Justice Department was to file its lawsuit, and by year’s end, all three companies’ stocks had taken a battering.

An even larger problem was the fate of everyone else trying to build businesses online. The entire wave of Web 2.0 winners – YouTube, MySpace, Facebook, Digg, Twitter, Flickr, etc. – started losing their luster as it became clear they had not developed any sustainable business model. Although venture capital continued to fuel a vibrant sector of startups, the major question looming over these emerging companies was how they would attain the necessary scale to become profitable.

5. U.S. PRINT PUBLISHING INDUSTRY FAILURES

Gannett, the largest U.S. newspaper chain, laid off thousands of employees, the Tribune Company sought bankruptcy protection, The New York Times put its headquarters building for sale, in Detroit the papers cut back home delivery to three days a week.

From Seattle to Miami, newspaper after newspaper announced layoffs, as many of their stocks fell to penny-stock range or were delisted. An unprecedented loss in advertising revenue, as well as the sped up 7/24 news cycle, the rising costs of newsprint and transportation, and competition from Cable TV and the Internet seemingly doomed this once ubiquitous American institution – the local newspaper.

Even the venerable Associated Press faltered by year’s end, freezing salaries and rolling back the fees it charges clients when several large newspapers threatened to quit the cooperative rather than pay the higher fees.

Online news sites fared better than print versions, but by the end of the year, online ad revenues were falling, too, signaling a very dark 2009, indeed, probably with a number of high-profile newspaper bankruptcies and closures.

For a while, magazines seemed to be escaping the fate of newspapers, but as the economy weakened, magazine ad revenue fell steeply, especially for the “newsweeklies” such Time, Newsweek and U.S. News & World Report, all of which were in serious trouble by the end of 2008.

Book publishers may be the next large segment of print to die; at least one large house actually stopped accepting new submissions late in the year, sending the book industry into a collective state of shock for the holidays.

6. WE ARE NOT ALONE

This was not really a domestic story, but the astonishing findings on Mars and the moon by NASA probes established, for the first time ever, that water exists on other planets and that, therefore, the main building block of life is in all likelihood distributed widely throughout the universe.

I'm just sticking this story on my list because I find it strange that more is not being made of this (in my view) revolutionary development. Perhaps we have become so inured to scientific reality in this culture because fictional movies featuring aliens are virtually prosaic offerings at this point. But I, for one, remember when we all thought that life was confined to earth.

No thoughtful scientist would posit that as a reasonable theory, given the astonishing astronomical developments during the year, 2008.