This Saturday marks the seventh anniversary of the international financial crisis (see, for example, the ECB’s crisis timeline here), at least in terms of the initiation of crisis management policy initiatives (the ECB liquidity injections of 9th August 2007).
4 replies on “International Financial Crisis: Seventh Anniversary”
You know, it’s clearer than ever that economists are the ones we should be listening to for policy prescriptions. Especially European ones.
Review of the impact of the financial crisis compared with expectations of impact:
1. Ireland – Oireachtas and electoral system has undergone no meangingful reform as one would have hoped.
2. Civil Service has not undergone structural reform in the way one might hope but there has been various reforming projects and creation of DPER is a step forward.
3. People are being paid less. On the plus side, this makes us more competitive. On the negative side, we are slaves to finance which sees everybody working under forced labour / sweat-shop conditions as the ultimate public good.
4. Much wastage has been eliminated in private business and in public services. The natural benefits of a bust have been obtained insofar as the country is now more efficient.
5. An across the board tendering culture has emerged for professional services and other matters. The ills that this leads to in terms of lack of training and skills development and increased opportunistic behaviour will manifest themselves, as they always do, causing long term damage.
5. Industrial relations peace in Ireland has been largely maintained in Ireland although it is starting to fray around the edges as realisation that the new reality is permanent sinks in.
6. The EU has been irreparably damaged. It has failed to act or behave as people would have hoped. The Commission emperor has been shown to wear no clothes, with little competence or influence and captured by industry and commerce, and the larger parties have persistently engaged in power plays. BREXIT is looking like becoming a reality rather than an idle threat.
7. The fiscal compact has been accepted under duress with possibly disastrous long term effects.
8. Geopolitical instability has returned with a bang as the western powers, and particularly the USA, asserts its exorbitant privilege against rising economic powers. The Middle East has gone into total melt down. Economic ills and gamesmanship are a major part of the problems. At the same time, Ireland has taken the opportunity to all but abandoned its neutrality with our Minister for Foreign Affairs taking vocal stands against all comers.
9. The super-rich and the financial industry elites have suffered little and learned no lessons. At the same time, the inequitable nature of the arrangement has been exposed damaging the capitalist system and its captured political structures.
10. Despite years of talk, no Good Bank or Investment Bank has been created in Ireland leaving us with a zombie banking industry, a rigged property market and artificially depressed employment in the construction sector.
11. We have hotter summers like our parents had when they were poor.
12. The UK has singularly failed to kick the economic heroin habit of generating economic activity through mortgage lending. Ireland has been in cold turkey but is desperately looking for a vein now there is has sight of getting its fix. A long-term future of debt slavery for the middle classes is back on the policy agenda.
13. Continuing the drugs metaphor, the pain relief effects of QE have been achieve successfully in the USA and partially in the EU, but the side effects and withdrawal/addiction effects are as yet unknown.
Itch!