The global economy is clearly headed for another recession after a decade of lukewarm recovery. The bailouts and loose monetary policy of the post-2008 world did nothing to fix the fundamental causes of capitalism’s latest systemic crisis. Instead, they papered over structural weakness while enabling another orgy of irresponsible lending and rampant speculation.
Iceland’s economy had thrived on speculative finance but, after the meltdown, rather than making the public pay for the crisis, as the Nobel economist Paul Krugman points out, Iceland ‘let the banks go bust and actually expanded its social safety net’ and instead of placating financial markets, ‘imposed temporary controls on the movement of capital to give itself room to manoeuvre.’
Although Crashed primarily traces the financial crisis in the US and Europe during the period 2006-2018, Tooze brackets his tale of Euro-American financial implosions by sketching the “financial balance of terror” between China and the US and delineating how dangerous this ‘balance’ is.
The way forward, it is increasingly clear, will be largely determined by the outcome of a political struggle between two post-globalization camps: fascists and democratic socialists.
The implications of the 2008 crash are still being keenly felt by those at the bottom of the economic pile, while the wealth of those who arguably created the conditions for the crash has surged to a point where in 2017, a new billionaire was created every two days, the biggest increase in history.
Here are ten things that have changed over the past ten years, including some huge achievements, that should be cause for hope and celebration.
The European election results were another shockwave rolling out from the 2008 financial crisis. They suggest the crisis has some way to go.
How do we find hope and meaning in a world where the powerful look out for themselves first, second, and always?