The FT has been running a series of articles on the charts that its writers think best show the impact of ten years of financial crisis. Today Martin Wolf offered this:
His point is that the low rates are unprecedented and despite them it is deflation and not inflation that has been the greatest fear, and with good reason. He is unable to explain what this might suggest happens next. And in fairness, we don't know precisely. But nothing about it looks encouraging.
What he, and what most, won't say is that it means that this current model of capitalism is dead. It is no longer entrepreneurial. It no longer innovates. It no longer provides work. It does not aspire to do so. It only seeks to make money out of money. And that's why society can no longer afford it. The decade has been a death throe for neoliberal capitalism. What that record low represents is the dying note for markets that no longer work. But the new has yet to be born.
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What the charts don’t show is the cost in human lives and despair delivered by this corrupt ideology.
I can only hope you are right. However it would seem to me that the global financial overlords have actually maintained if not increased their power in recent years. I think we are perhaps beyond some tipping point.
Re: ‘despite them it is deflation and inflation that has been the greatest fear’
should that be ‘and NOT inflation’?
Corrected
Thanks
I am told Martin Wolf is one of the more enlightened FT writers. On the whole though most of their journalists display a remarkable degree of ignorance on economic matters. They and their leader writers have been cheerleaders for neoliberalism and austerity, cutting social welfare spending, privatisation and all the horrors that have been unleashed on the UK since Thatcher.
But most of the press are like that. Perhaps we need a truly free market (echoing yesterday’s blog) in newspapers instead of a press owned by oligarchs and beyond effective regulation.
I agree that it is essentially game over for what I would call North American capitalism (via Austria {von Hayek} and Russia {Ayn Rad}).
But the sad fact remains is that what prevents it from being buried is the ignorance of millions of people around the world who do not seem to realise that it is responsible for making their lives harder and shorter.
Ignorance on this scale is the hardest nut to crack.
And there is no doubt that you are doing your bit.
But this is where we are I feel.
We’ll keep trying – and your next comment will be your 1.000th on this site in your current incarnation….
Well flagged Richard, and a vote of thanks to Pilgrim for some fantastic contributions over the years that regularily add a lot of value to Richard’s ‘starters’
To the point raised by this thread, there is plenty of evidence to support your argument that we are seeing the death throes of the neoliberal, ‘turbo’ version of capitalism that has caused so much damage over the last 30-40 years. However, the power, the money, and the control of the media, still lies very much with those behind neoliberalism and who have gained so much from it. In addition, there is still not an appealing counter narrative, that reflects the world today and the challenges of the next 20 or so years. We are stuck with politicians and policies from the past, and neither of the main propositions are fit for the future or even the present.
Goodness me!
Well you have me hooked that is for sure. It’s the energy you release I think every time you blog. And thank you.
I use an on-line name because someone at work saw me comment on your site under my real name and then gave me a lecture about how giving my opinion on politicians might affect the work that I do in the city where I work and also might be falling foul my contract of employment (although it was OK for them to cut my pay and conditions without consulting me because of austerity). So there you are.
And well done
1,000 not out
you have obviously put a great deal of thought into this Richard but I am very confused because it seems that unemployment is at record low levels and that the UK economy is dependent upon mass immigration to keep it functioning – eg all those nurses and doctors from EU countries that work in the NHS, all those people who come to pick the crops in Lincolnshire. Is it only agriculture and the public sector that is employing staff? I am sure you have access to much more detailed figures in your university library but, although some recruitment companies, such as Gattaca, are reporting year-on-year recruitment declines because of Brexit uncertainty, others such as Robert Walters are reporting big increases. Meanwhile small companies such as Fevertree have doubled their profits and revenues every year. Is it really right to be so gloomy about the future?
Yes
Wages are declining
Debt is rising
New credit is being limited
Defaults are likely
Monetary policy does not exist
And governments are unwilling to use fiscal policy
ANd all the while Brexit hangs over the economy
Whilst Rrump fuels uncertainty in so many ways
Sure as heck it’s right to be gloomy
@Graeme. I offer two specific observations re the requirement to import nurses trained in foreign lands at someone else’s expense.
First, the financial support provided to UK post graduates to become nurses is non-existent.
The government via the NHS high command in London is prepared to bring in large numbers of Philipino nurses and pay for their accommodation in Central London.
This represents a criminal waste of our resources. Go read Bill Mitchell s many blogs on the real state of the Labour market.
The import of Philipino nurses points to one thing only: cost cutting in readiness for deeper privatisation. A privatisation that might be connected with new trade deals with the US perhaps?
Can you not see the pound signs in Liam Fox’s eyes yet?
What I try to point out is what Bernie Sanders has been saying since 2010 and that is the 1% are at war with it’s own people.
Whilst they get richer everybody else gets poorer, it really does fall down to the old adage, “the Rich get rich and the poor get poorer” from the obvious transfer of money from the poor to the rich. Prices are still rising whilst wages are falling, credit is funding the difference until the next bubble when it will all go pop again.
Our manufacturing base was deliberately destroyed during Thatchers years, simply to transfer reliance within our economy on London as the financial centre of the world. This also did several other things and allowed them to destroy the unions peoples power base, curbing peoples ability to fight for their rights and maintain their standard of living.
Low wages are also a self fulfilling prophecy, people will work longer and for less benefits when they rely solely on the work available, these days young people regard work in a superstore as a career move in contrast to previous decades when there were infinitely greater possibilities of work in manufacturing. The quality of training has also diminished so called modern apprenticeships offer nothing like the training experienced up to the 1970s.
The people of Britain and throughout the world are being put on a treadmill to serve the new masters, all based on debt, and we are all supposed to be grateful for the crumbs that come our way, when in reality the financial system serves the interests of those with property and financial interests…….. commonly referred to as socialism for the rich and capitalism for the rest of us.
People are the real economy, not the financial sector, Neo-Liberal governments are asset stripping our countries as like here with the NHS, Theresa May presented the Naylor report as an investment, using £10 billion of tax payers money to fund an asset fire sale of all the NHS’s land and property, buy one get one free offers. and it all there for anyone to see in the report, they don’t even try to cover it today, because so few take the time and energy to read it.
Unemployment is at record low levels, but that reflects a stagnation in productivity, and a failure to invest.
And falling real wages
I just posted a chart too at
http://www.progressivepulse.org/economics/the-quantity-of-money/
I like money supply because it reflects what is happening, whereas interest rates reflects how monetary authorities react to what is happening. I agree that either is a pretty dramatic demonstration of the big change.
It’s pretty staggering
I noticed that when dealing with M4 the other day