I spoke to an old friend this afternoon, and we discussed the onset of what we both see as a global recession from which we think the world economy might emerge in a very different, and quite probably better, place.
But we also discussed what was different this time when compared to 2008. My friend knew that in 2008 I hoarded cash (literally, notes) because I was so worried that banks would fail. They did, of course, and no one knew what might happen as a result. We now know that Labour saved them in the UK, for which they have never got the thanks that they deserve.
This time I assured him that I am not doing that. We have not learned that much in the oast decade, unfortunately, but we do now know that we canno0t let banks fail, even if saving them means perpetual handouts to those already wealthy. And this time I think there almost no chance that anyone need hoard cash. Nor need we worry that banks will fail: the lines of credit to keep them functioning will be provided, It's US$150 billio0n in the USA tonight, for example.
We can still have a recession.
We can still have all the damage that will cause.
We do need radical rethinking to address these issues, of the sort that I describe on this blog.
Bty government has also learned it can create money and not trigger inflation as a result. I wish they'd learned it more comprehensively. But it does mean that the bak s should be safe this time.
That just means we have other things to worry about.
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Wow powerful stuff, thanks for that
For what it’s worth, I concur with your pragmatic analysis. However, I feel sure you’d agree that it needs to be viewed as dealing with the ‘weather’ rather than the ‘climate’.
Because of the economic & associated political dogma / ideology that has taken root first in the west and thence across the globe over the past century or so – latterly pushed to extremes by the Chicago Boys (and Margaret) – it seems the best we can pragmatically expect is better quality deck-chairs being strategically moved around according to the forecast. But the oncoming perfect tsunami of a global recession accelerated by a viral pandemic, chronic & escalating private debt, weakened social infrastructures, corrupt and insolvent banks (‘happy’ 150th birthday Deutsche Bank – lol) incessant regional conflicts, all occurring within an existential threat to our life-giving ecosystem, must surely be a wake-up call to the global Establishment that it can never again be business as usual in any shape or form. As Greta Thurnburg keeps reminding large groups of mainly old white men – the ‘effing’ (not her word ofc) house is on fire! But … I’m not holding my breath. To revert to the previous analogy, maybe they’re hoping a warmer planet will melt the iceberg in time to avoid impending disaster!
The only solution for a stable, sustainable paradigm for future generations necessitates a total and radical resetting of how we manage the planet in all its complexities. For sure, those whose thieving hands currently cling to the levers of power are not going to give up without a fight – regardless of potentially terminal collateral damage. But since ‘one can’t solve a problem with the same intelligence that created it’, it’s now a race against time – for the old order to die quick enough so that (hopefully) enough wised-up members of generations Y & Z can embrace the quantum changes needed for survival. In that sense maybe Covid-19 is a blessing in disguise as the elderly are assuredly more vulnerable.
Unapologetically I repeat Gramsci’s assessment as he saw the world in the late 1930s: “I’m a pessimist because of intelligence, but an optimist because of will.” Plus ça change ……
Generation-Z will be subject to the same educational grooming as we were, possibly more so via state education. This is likely to have an adverse effect on their ability to come up with creative solutions, I gather from this study https://ideapod.com/born-creative-geniuses-education-system-dumbs-us-according-nasa-scientists/
I imagine the home-schooled will be the ones coming up with the answers then. Down wiv skool!
I was school educated
Unreasonable thinking always exists
There is no problem being school educated, but a great deal wrong with being school indoctrinated.
As Shaw said – all progress depends on the unreasonable man (or woman)
It’s not a bad principle…
Hmmmmm – thoughtful stuff.
What is evident to me is that such a skittish, irrational and frankly unprincipled ‘institution’ (the stock market’) is allowed to be so powerful in determining the value of …..well… everything really.
There has to be a better way than this surely? It puts money before people – Coronavirus’ affect on money seems more important than its effects on people. Bank bailouts make sense in on way but in another its just another get rich quick scheme. We have yet to see if the help offered benefits the many.
Hence Green New Deal bonds…..
The stock market doesn’t put a value on anything, it simply provides a record of the values other people put on things.
Oh I agree entirely – but will they?
Boris’ backers seem to want to bet on disaster rather than success.