This is one of the
few times you will see me approvingly quote an article from The Guardian:
Even as their world came apart, the bankers clung to
denial. By August 2007, the flagship hedge fund of Wall Street’s most
prestigious firm was tanking fast – and what explanation came from the man at
Goldman Sachs? “We were seeing things that were 25-standard deviation moves,
several days in a row.” The bank was getting hit by events that were only meant
to happen once every 100,000 years – and they were happening every day of the
week. Given a choice between blaming their models or reality, Goldman’s bosses
held the world at fault.
You know the rest because, a decade later, you and I are still paying for it. How the banks died, the world economy collapsed and most of us got poorer. How the financiers, mainstream economists and regulators were so detached from reality that they swore blind that such a catastrophe was impossible – even while it was under way.
Their reputation has never recovered. And as an economics journalist, I look across at politics and see the same process at work. Brexit, Donald Trump, Jeremy Corbyn: time after time, the political class has completely failed to understand the world they were governing, policing and analysing. Allow me to be blunt: our political crisis is also a crisis for our political class. And it is one from which I doubt they can recover.
At each major fork in the road, they have sped off down the wrong turning, while decrying the other as unimaginable. Each time, they have crashed.
You know the rest because, a decade later, you and I are still paying for it. How the banks died, the world economy collapsed and most of us got poorer. How the financiers, mainstream economists and regulators were so detached from reality that they swore blind that such a catastrophe was impossible – even while it was under way.
Their reputation has never recovered. And as an economics journalist, I look across at politics and see the same process at work. Brexit, Donald Trump, Jeremy Corbyn: time after time, the political class has completely failed to understand the world they were governing, policing and analysing. Allow me to be blunt: our political crisis is also a crisis for our political class. And it is one from which I doubt they can recover.
At each major fork in the road, they have sped off down the wrong turning, while decrying the other as unimaginable. Each time, they have crashed.
That is because
the maintream economic models, on which so much of the social policy of the
last 45 years has been made, are wrong. But the wealth of too many powerful and
well-connected individuals relies upon the continuance of the system built on
those false models for anyone to make any substantive changes until the whole
thing collapses. As it inevitably will, sooner or later.
For starters, all the bad debt needs to be written off. It will never be repaid. But writing off the bad debt means the bankrupting of almost every major bank in the world, and the financial elite would rather see the world collapse into disease, famine, and war than accept the just consequences of their idiotic actions.
For starters, all the bad debt needs to be written off. It will never be repaid. But writing off the bad debt means the bankrupting of almost every major bank in the world, and the financial elite would rather see the world collapse into disease, famine, and war than accept the just consequences of their idiotic actions.
