In a document filed with the US Court of Federal Claims, Ben Bernanke, the chairman of the US Federal Reserve during the height of the crisis, stated: “September and October 2008 was the worst financial crisis in global history, including the Great Depression. Of the 13 most important financial institutions in the United States, 12 were at risk of failure within a period of a week or two.” (source)
The truth is that endless growth cannot be sustained endlessly. And yet, capitalism is based on the concept of endless growth. The entire idea is to 'buy low and sell high'. But as evidenced throughout economic history, there are periods of 'down-turns' or 'market-corrections' or 'depressions'... we have lots of phrases we like to use to express the fact that the system, as designed, cannot sustain itself, forever.
We can look at current economic history to demonstrate this truth.
The Europeans have broken the backs of the Greeks who have capitulated to the demands of capitalism and relented to more austerity. This is to the advantage to the capitalist system and to the disadvantage of the Greek people. But, in spite of all of this, the European economic system is itself sliding backwards.
If we look at 2006 as the recent high water mark of the economic system and if we consider 2008 as the 'bursting of the bubble', we can compare both of those years with the current status of the economy.
Economic output in the European economy is still not as good as it was in 2007. Investment in the European economy fell in the second quarter of this year... not a good trend.
China, with the world's second largest economy is slipping backwards. Real estate investment is not keeping up and real estate has been a leader in the Chinese economy since the crash in the American economy in 2008.
Economists claim that Japan's economy is slowing down but is subject to improving as Japan 'invests' more into a 'war economy'. Apparently, we envision Japan facing-down China?
The American economy has grown by 1% in the first half of this year and the U.S. economy is the brightest economic hope around the world.
The Federal Reserve figures indicate that American incomes went down by 5 percent between 2010 and 2013. This was while the stock market climbed and set 'new records'. Imagine, American income went down in a period defined as economic “recovery.”
Economic failures are being handled in the familiar manner, brutal police states at home and war abroad. This is the normal formula from a historic perspective. The entire 20th century was economic calamity followed by war.
Because the basic formula of capitalism does not and can not work, the financial elite invest in militarization of the police to 'keep the peace' (peace-officer is a mis-leading term that comes to mind). The 'peace' needs to be kept violently because, as people work harder and harder for less and less they become 'disruptive'. Inequality is now being recognized for what it is in the United States.
The other aspect of propping up capitalism is war over-seas. And because the American people are growing tired of war as their foreign policy, the government is fighting more and more wars with fewer and fewer American fighters. Drones and proxy armies serve for today. Obama's drone war is now the standard combat strategy. And we have the Saudis fighting our war and dropping bombs in Yemen, for example.
In recent times, to mentally reinforce the idea of growth, we used phrases like, 'emerging markets' (referring to third-world countries) and 'expanding financial documents' (referring to financial derivatives but currently neither of those concepts have proven to have lasting benefits.
Those who suffer at the hands of the elite need to take control and make sufficient adjustments to the economic formula. Growth forever can't happen. Economies need to be directed toward the needs of the people who live and work in the system. Profit can't be the only goal. People need to recognize the truth about their leaders and vote them out of office.
For a while, it looked like Greece would lead in the re-arrangement of priorities, but the capitalist have, at least temporarily, won that battle. In the United States there is an upcoming election. The major parties have rallied around the usual money elite in an effort to win their support and to receive their campaign contributions.
The people need to rally around global warming solutions, peace, and human needs. Instead of spending on massive incarceration and endless wars we cannot win, lets redirect the economy toward things that matter to the American people. In lieu of massive campaign contributions, the people can speak with massive voting.
cartoon from Paulitics
of Various Subjects