Larry Elliott’s three myths of the financial crisis

Posted on

Larry was on form, as usual, today, arguing three myths have sustained the  continuation of the financial crisis for five years now:

The reason the crisis has been so long comes down to three myths.

The Anglo-Saxon myth is that big finance is a force for good, rather than rent-seeking and corrupt.

The German myth is you can solve a problem of demand deficiency with belt tightening and export growth.

The chances of this happening are slim. Because there is a third myth — that there was not much wrong with the global economy in 2007.

Of the last he says:

But the old model was financially flawed as it operated with high levels of debt, socially flawed in that the spoils of growth were captured by a small elite, and environmentally flawed in that all that mattered was ever-higher levels of growth. It is possible to move on, but only when it is recognised that the genie will not go back into the bottle.