Apocalypse now: has the next giant financial crash already begun?
... A better exercise is to image what archetypes a dramatist might use if they tried to write a farce describing the state of society on the eve of yet another disaster. There would be a character obsessed with property: London is fizzing with young professionals trying to clinch property deals right now. The riverbanks of the Thames are forested with cranes, show apartments and half-occupied speculative developments that will, after the crash, make great social housing.
Then there would have to be a hapless central banker, optimistically “looking through” the figures for low growth, stagnant prices and collapsing trade in order to justify doing nothing.
But the protagonist would have to be a politician. The Kingston University economist Steve Keen points out that, in the run up to 2008, the flawed ideology of neoliberal economics made a dangerous situation worse. Economists put their professional imprimatur on the idea that risky investments were safe. Today, the stable door of economics is firmly shut. Even mainstream bank economists are calling for radical measures to revive growth: Nick Kounis, ABN Amro’s macro-economics chief, called on central banks to raise their inflation targets to 4% and flood the world with money in a coordinated survival strategy.
Instead, it is in the world of geopolitics that the danger of elite groupthink is clearest. The economic danger becomes clear if you understand that printing $12tn incentivises every country to dump the final cost of anti-crisis measures on someone else. But there is now also clear geopolitical risk...
/Read More: http://www.theguardian.com/commentisfree/2015/nov/01/financial-armageddon-crash-warning-signs
I'd like to say that it is important to redefine 'productivity' in economics. More than a mere accountancy measure of the value of goods and services and a limited set of associated costs, 'productivity' should take into account a much wider array of social and environmental costs and benefits. Thus, the above discourse would more strongly emphasise the social suffering produced under the present economic paradigm and would recognise the environmental consequences. It would acknowledge that the present and forthcoming economic, um, 'slowdowns', while increasing social ills, actually decrease environmental harm. It might speculate that a future 'recovery' might well require paradigm change and a resurgent economy investing in socially progressive and environmentally sustainable infrastructure, production and consumption.
