Interesting to see an article that recognises the role QE has played in driving inequality and disrupting political landscapes, but I wonder why Mr Lanchester doesn't consider the alternative policies that could have been enacted. i.e. if governments had focussed on spending money into the real economy instead, through infrastructure spending and real nation building projects - creating jobs, real (not paper) wealth and the platform for further economic growth - rather than spending funny money into existence supporting markets that blow up prices without any real addition of value.
hindsight is 20/20, but does anyone recall some of the ludicrous things we actually did to prop up some of our structurally too-big-to-fail institutions?<p>as an automotive mechanic the one institution during this crisis that stuck out in my mind was "cash for clunkers." Essentially the government subsidized ordinary americans to trade in whatever car they had so long as it got relatively poor gas mileage and wasnt more than 25 years old. This was a 3 billion dollar program designed largely to get anericans to start spending money on cars --any car-- by bribing them to destroy their own car.<p>Two studies basically declared the program a failure.
<a href="https://en.wikipedia.org/wiki/Car_Allowance_Rebate_System" rel="nofollow">https://en.wikipedia.org/wiki/Car_Allowance_Rebate_System</a><p>But I have still a deep sense of chagrin when I remember mixing sandy batches of "engine disablement compound" and pouring them directly into a perfectly good truck or minivan. Sure, it might not win an award for climate change but these cheap cars and trucks could have gotten a single mother to and from the grocery store or school once or twice a week as needed. We intentionally destroyed them all. For those thinking the process was sane and simple, it wasnt. Doing this is loud, dirty, and throws a cloud of smoke you can see for a mile or more.<p><a href="https://www.youtube.com/watch?v=M2Sz5vtfanw" rel="nofollow">https://www.youtube.com/watch?v=M2Sz5vtfanw</a><p>We were even so desperate to fix the economy that the government basically started cutting people checks. The idea being they would spend the money on a shopping trip to the mall or something... <a href="https://en.wikipedia.org/wiki/Economic_Stimulus_Act_of_2008" rel="nofollow">https://en.wikipedia.org/wiki/Economic_Stimulus_Act_of_2008</a><p>I spent my check on groceries when I got it, and put the rest into savings.
"...According to calculations that Zucman himself says are conservative, the missing money amounts to $8.7 trillion, a significant fraction of all planetary wealth. It is as if, when it comes to the question of paying their taxes, the rich have seceded from the rest of humanity."
A sobering reality...especially when you consider the ultra rich design and run the political systems that define the tax bases and laws the rest of the world are organized under...
The ten-year anniversary is a good moment to look at the Case-Schiller index today and compare it to the peak of the bubble in 2006.<p><a href="https://fred.stlouisfed.org/series/CSUSHPINSA" rel="nofollow">https://fred.stlouisfed.org/series/CSUSHPINSA</a><p>I think there will be some <i>great</i> deals in real estate by 2021.
This writing is brilliant.<p>A follow up: <a href="https://www.theatlantic.com/magazine/archive/2018/06/the-birth-of-a-new-american-aristocracy/559130/" rel="nofollow">https://www.theatlantic.com/magazine/archive/2018/06/the-bir...</a><p>And another one: <a href="https://www.dawn.com/news/1417420/a-new-upper-class" rel="nofollow">https://www.dawn.com/news/1417420/a-new-upper-class</a>
“What if the governments of the developed world turned to their electorates and explicitly said this was the deal? The pitch might go something like this: we’re living in a competitive global system, there are billions of desperately poor people in the world, and in order for their standards of living to improve, ours will have to decline in relative terms.”<p>This is a guaranteed losing platform
Watching what happened in the UK it appeared we were making a lot of poor decisions on the hoof. In particular pushing Lloyds into buying HBOS didn't work out so well.<p>I often wonder what would have happened if we hadn't bailed out the banks.
Very interesting article! I agree and have felt the tremors the author mentions throughout my own work in a related field.<p>The last decade has taught me that corporations matter more than nations, at this point. In the case of corporate capitalism, governments act like special interest groups protecting the corporations that fund their lifestyles.<p>To that end, if a major bank like RBS were to go belly up and now be beyond the ability of the U.K. to save, what are the chances we see a “national merger” where a country offers to absorb the losses in the banking system in exchange for absorbing the entire nation (population, economy and all)?<p>This sounds extreme, but it’s effectively what happened in the feudal era. Wealthy nobles would support whichever king had the resources to protect them. Only thing I’m doing is replacing “wealthy nobles” with “corporations” — which are essentially “jointly owned” among the entire “nobility” (I.e. the capital class in the West).<p>Ultimately I think we will avoid World War III because the corporations don’t want it; and they control enough of the global logistics supply chain to prevent it. So a peaceful way to transition failed governments and financial systems back to prosperity will be needed if we want to avoid a repeat of the Weimar Republic.
Here's a discussion with the author, if anyone's interested:<p><a href="https://www.youtube.com/watch?v=-HFIa_szx_U" rel="nofollow">https://www.youtube.com/watch?v=-HFIa_szx_U</a>
"<i>A crackdown on international evasion is difficult because it requires international co-ordination, but common sense tells us this would be by no means impossible. Effective legal instruments to prevent offshore tax evasion are incredibly simple and could be enacted overnight, as the United States has just shown with its crackdown on oligarchs linked to Putin’s regime. All you have to do is make it illegal for banks to enact transactions with territories that don’t comply with rules on tax transparency.</i>"<p>Like Switzerland?
"<i>From a sociological point of view, the crisis exacerbated faultlines running through contemporary societies, faultlines of city and country, old and young, cosmopolitan and nationalist, insider and outsider. As a direct result we have seen a sharp rise in populism across the developed world and a marked collapse in support for established parties, in particular those of the centre-left.</i>"<p>Weirdly, the "winners"[1] of the populism have been rural, older, nationalist, and very much insider[2]. Think of both Trump and Brexit supporters. I'm not entirely sure, but these don't seem to have been the people hurt the most by the economic crash. The whole situation has an incredibly strong disconnect between what's actually going on and the facade or veneer of what they think about it. Ideology trumps reality?<p>[1] I'm using "winner" because I can't think of anything better, but the "victory" is Pyrrhic. Not only are they shooting themselves in the foot, even if they weren't they would not have a good end game.<p>[2] Yes, the rhetoric is about outsiders, clearing the swamp and that sort of thing. But those are the most inside outsiders I've ever seen.