Six Years Later, There Are Still Lessons to Learn!

[unhappycamper]

http://watchingamerica.com/WA/2014/09/21/six-years-later-there-are-still-lessons-to-learn/

Six Years Later, There Are Still Lessons to Learn!
Published in Le Devoir (Canada) on 13 September 2014 by Khalid Adnane [link to original]
Translated from French by Derek Leonard.
Edited by Bora Mici.
Posted on September 21, 2014.

~snip~

We can draw several lessons from this singular episode of our recent economic history, three of which cannot be overlooked.

Self-Regulating Market

The capacity of the market to regulate itself comes in first place. Since the end of the 1970s and the beginning of the 1980s, we have witnessed in all industrialized countries an important reversal of the paradigm inscribed into the development of the neoliberal revolution. This revolution, installed first in Great Britain by Margaret Thatcher and pursued next in the United States by Ronald Reagan, proposed a vision in which the primacy of the market had become uncontested, and in which the retreat of the state from the economic sphere was judged indispensable to the proper functioning of the economic machine and the straightening of public finances. Concretely, a wave of privatization and the reform of social programs reveals this, but especially the various deregulations, notably in the financial sector.

~snip~

'Too Big to Fail'

In the last two decades, a sort of faith has developed that is coupled directly with the phenomenon of globalization. Thus, in a decompartmentalized market and a financial system that is more and more interconnected and interdependent, a major player gets protected de facto since [such an entity] represents a systemic risk. In other words, government institutions were going to run to its aid at the first false step because it becomes a threat to the system as a whole.

~snip~

Applied Politics 101

In the end, the great and celebrated economist John Maynard Keynes affirmed: “The difficulty lies not in the new ideas, but in escaping from the old ones.” This is simply called pragmatism and is the third and last lesson to learn from the bankruptcy of Lehman Brothers.