Читать книгу Sustainable Futures - Raphael Kaplinsky - Страница 28

The twentieth century ended with a collapse in stock markets, particularly in the US, and particularly in the share values of the high-tech sector. More than 100 million people globally were plunged below the $1-per-day absolute poverty line as a consequence of this burst high-tech stock bubble. This economic crisis was relatively short lived. But it was succeeded by a much more severe and persistent economic crash which began to unfold in late 2007. As we have seen, the trigger for this severe economic disruption was a crisis in the US housing market.

The domino effect of this real estate crash spread rapidly through the US economy. In short order, 176 banks failed in 2009. Unemployment doubled from 4.9% in 2007 to more than 10% in 2009. The Dow Jones stock exchange index fell 54% in 17 months. Two of America’s largest automobile companies – Ford and Chrysler – had to be rescued with government funding. It is estimated that the total level of support provided by the Federal Government to the financial sector was more than $4tn. Although much of this was repaid, this nevertheless led to a long-term burden on taxpayers of more than $1.2tn.

Contagion from the crisis in the housing market was not confined to the US economy. The International Monetary Fund calculated that only one of the thirty-three high-income OECD economies (Australia) avoided the fallout. In Iceland, the three largest banks failed. Greece, Ireland and Spain were pushed to the edge of default. Between January 2008 and January 2009, industrial output fell by 31% in Japan, 26% in Korea, 16% in Russia, 15% in Brazil, 14% in Italy and 12% in Germany. More than 20 million jobs were lost worldwide, predominantly in the construction, services and automobile sectors. Stock markets throughout the world became increasingly volatile, with values on a declining trend. In 2008, share prices fell by almost a third in Europe and the Asia-Pacific region. In wealthy European countries, an increasing number of people were living on the streets and begging for handouts, and the number of foodbanks mushroomed. The list goes on.

Recovery from the Great Recession took some time. It was only in 2016 that average real living standards in Europe returned to their pre-Recession levels. Countries such as the UK and Greece which adopted austerity policies took much longer to recover than those such as the US, where governments took active steps to revive demand and stimulate economic activity. But, as we saw earlier, the primary vehicle used to stoke recovery – Quantitative Easing – ratcheted up the very financialization of the economy which had led to the Great Recession in the first place. Moreover, despite much protestation, most of the financial sector which had engaged in irresponsible lending and non-productive speculation was left untouched. Most of the key economic architects appointed by incoming President Obama were Wall Street bankers who had been key players in the financial sector which caused the crisis in the first place. Thus, the ‘rescue’ did not address the major systemic flaws in the economic system. It was merely poor-quality sticking plaster, ready to peel off under the slightest abrasion. Quantitative Easing programmes were renewed, and by 2019 the pyramid of speculative finance which had led the financial system to collapse in 2007 had regrown to pre-Great Recession levels. Global debt is at a historically high level, and spans the spectrum of borrowers – governments, households and, despite record profits, the corporate sector as well.