Posts Tagged ‘Financial Deregulation’

The 1% prepare for the next financial crash

September 24, 2014

The past 30 years have seen a series of financial crises, each worse than the previous one, followed by a government bailout.  David Malone, a documentary filmmaker turned financial journalist, said the world’s financial elite see another crisis coming, which will be the worst of all.

Rather than try to prevent the next crisis, he wrote, the financial elite are preparing to secure themselves from harm.  This means neutering the ability of national governments to regulate banking or restructure debt.   This includes international trade sgreements that would make freedom from regulation a binding obligation under international law.

With government rendered powerless, international bankers and financiers, as their creditors, would have the power to dictate.

There’s more.  Read his two articles to get the full story.  This is speculation based on circumstantial evidence, but it seems plausible to me.

LINKS

The Next Crisis – Part one by David Malone as Golem XIV (via Naked Capitalism)

The Next Crisis – Part two – a manifesto for the supremacy of the 1 percent by David Malone as Golem XIV (via Naked Capitalism)

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Income inequality and reckless lending

September 13, 2013

inequality.financialdisaster

Correlation does not prove causation, but David A. Moss of Harvard Business School sees a connection between reckless lending and income inequality.

The logic is this:  The top 10 percent of income earners are unable to spend all of their increasing share of U.S. wealth.  They have to invest it, and, in the era of financial deregulation, they can get a high return by investing in banks that engage in reckless lending and financial speculation.  The mass of the public gets to maintain its spending power, by means of easy credit, and the economic elite gets to increase its share of the national income.

This works out for everyone, until the bubble bursts.  Then it becomes a question of who gets bailed out and who isn’t.  It’s a neat theory, and, for me, a plausible one.

Click on Inequality and its Perils for a discussion of this issue by Jonathan Rauch for the National Journal.

Click on Class Is Seen Dividing Harvard Business School for a report on the privileged and underprivileged at Harvard Business School itself.