The next financial crisis is on its way: it’s just a matter of when

Posted on

As the FT notes this morning:

John Kay, the economist and author, will warn this week that the world is heading for another financial crisis because the economic system is geared around trading profits that create market bubbles that inevitably burst.

Almost a year after the publication of his groundbreaking review of the UK’s equity markets, the London School of Economics professor will say in a keynote speech this week that the world is “waiting for the next crisis”.

I agree. The next crisis is inevitable because:

1) We have not reformed banking

2) We've encouraged more inequality by reducing tax rates - especially on companies

3) We haven't tackled tax havens as yet

4) We have not invested in what is needed in our economy - housing, green infrastructure, better education and more - and so unemployment has remained high

5) We have not reformed the tax system - which remains regressive - exacerbated by Osborne's cutting taxes for the rich and increasing VAT

6) We have given the City cash to  speculate with in the form of QE rather than investing it as green quantitative easing

7) We remain in awe of those who created this crisis

8 ) Politics remains firmly neoliberal across the spectrum

9) The economic narrative has not changed.

And perhaps of all of these the last is the most important.

Bring on the The Courageous State.