Why the 2008 Financial Crisis Is Still With Us - Bailouts, Austerity and the Crisis of Democracy

Watch this discussion that was held on Tuesday 14th May from 17:30-19:00 BST at UCL IIPP.
Building on the previous lecture exploring the roots of the 2008 financial crisis, this talk looked at the long term consequences of the crisis and both the political and economic policy response. It focused on the combination of bailout, austerity and quantitative easing, as well as the price of those policies in terms of economic performance and political stability.
To conclude this discussion on the 2008 financial crash and the crisis in neoliberal economics, the lecture explored the intellectual opening the crisis created and the ideas that have stemmed from it.
The lecture was presented by Professor Damon Silvers, Visiting Professor of Practice at UCL IIPP and Former Deputy Chair of the US Congressional Oversight Panel for Troubled Asset Relief Program.

[@cyberpunkalphamale]

Prof. Silvers is an international treasure

[@gmw3083]

A glow ballistic treasure seeker? Like a pirate...

[@alexanderclaylavin]

Larry Summers!! He had Brooksley Bourne fired from the FDIC when she predicted this in 2000.

[@thorstenroberts4726]

So nobody could see that a massive transfer of wealth from future generations to a hanful of wealthy individuals wouldn't be problematic? Where was the good professor when he was bailing out "sophisticated investors" with society's wealth? Only now he's on the lecture circuit warning us that his efforts then are still dangerous today. Well thank you for that!

[@futures2247]

Yes and the psychopaths still hoard tens of trillions off shore in tax evasion

[@gmw3083]

Order out of Chaos...

[@sengs.4838]

This gentleman is very smart and clairvoyant

[@garretttedeman]

Plain awesome presentation. Solid stuff all-around and all-the-way through. ...Bookmark this one.

[@kimshaw-williams]

Brilliant. Thanks Prof silvers

[@carltonmcgee8878]

Thank you sir.

[@leegregorypeck]

Is nobody critiquing this? I agree with some of it, but a lot of its nonsense. He claims at the start that Ireland found alternatives to austerity, when a massive austerity program was delivered in Ireland. Look at the 2011 budget which planned 24k job cuts, welfare cuts and wage cuts. Hindsight is a wonderful thing, but the UK did not know where bond yields were going at the time. We saw where they could go, as markets started refusing to lend money to certain states. Moreover we saw where they could go in the UK if we dramatically increased borrowing. Liz Truss tried it and spooked the markets, which increased our bond yields relative to our competitors. Besides these debates assume austerity was delivered in the UK, and make the ridiculous suggestion that governments replicated Hoover like policies. Hoover like policies were never replicated, as the UK government massively increased borrowing. We ran the largest deficit in our history for years and doubled our national debt as a percentage of GDP. The Bank of England printed massive amounts of money through QE and we had negative interest rates. Then he goes onto the nature of austerity, saying education and state departments that promoted the supply side were cut. Where is the evidence that education spending was ever cut in real terms? Public investment as share of GDP was higher than it was in Germany. He blames austerity for the stagnation of UK productivity, when productivity had been stagnating for several years before the 2010s. There are also so many caveats around the way productivity is calculated, which may have depressed the UK figures. For years we were told the the UK was the worst performing economy in terms of productivity growth. The figures were subsequently revised up, which moved us from bottom of the pack to average. If austerity was so destructive, then why did the UK manage to create over four million jobs during this time and suck in millions of immigrants? During the peak of austerity, the UK was creating more jobs than the rest of the EU combined. More French people cam to live in the UK since the persecution of the Huguenots. Finally this is a declinist debate, where the assumption of decline is made and we latch on to yet another fashionable scapegoat.

[@gmw3083]

Order out of Chaos...

[@SS-qk8oc]

Agree. This guy’s analysis is not super insightful imho. And so … populism noun • a political approach that strives to appeal to ordinary people who feel that their concerns are disregarded by established elite groups (which they are)

[@theonlycaulfield]

The guy's analysis went haywire as soon as he called the acronym PIGS racist and issued apologia for the countries based on the idea that their current problems were all a result of dictators from a half century ago. He just says this and moves on as if it is clearly established, when it is not. The countries in the 2000s were still dealing with high corruption levels, low productivity and unstable politics. What he then said about a circular market in the EU wasn't true either. He just completely made it up and expected the audience to accept it. I got chills because of how much he was twisting reality. The North of Europe isn't being supported by the South through the South buying the Norths goods, but the opposite, in that market skews towards the North buying the South's exports.

[@effexon]

what makes US timebomb to me, as layman vs china is that china has built manufacturing, thing that raised US to superpower above UK in 1940s and won WW2... but now mentality in US is reduce manufacturing and any labor as long as profit is made (MBA model persisting like UK old pre-2008 financial model dysfunctional now), meaning outsourcing manufacturing. Still, US foreign policy follows pre-WW2 era doctrines, flavor of monroe doctrine, in economic terms: no country shall rise above US in prosperity... but they have no effective tools against china, as china can also print and support their manufactruing, which US cannot do due to mentality shift (money throwing wont solve things, like it didnt bring back manufacturing post 2008 despite multiple QEs to corporations directly). Thing with allies is that they could and would want to manufacture, but this old mentality pushes to undercut them. It works on allies but not on china or other BRICS as they have prepared for that. So essentially US and other western companies then race to the bottom buying products from BRICS countries. Only exception is military hardware that is tightly regulated and not on mercy of MBAs/corporate CEOs bean counting best profit margin. Why manufacturing is important? Coz it is essentially backing for non gold based fiat currency, balancing something to sell and trust to pay back in some form loans. Also it is remedy incase russia tries to undercut and block export to that manufacturing/service sector base. Most of all in crisis, war, cold war 2 situation it ensures economy wont collapse 1920s germany style when both imports dont work and money is more and more worthless. Last straw would be Mexico joining BRICS, not that im so sure how influential that organization is but china uses influence to those countries offering good deals.

[@theonlycaulfield]

The mentality in the US was to offshore manufacturing. The recent trend has be to re-shore it. Besides that, most of your comment makes little sense. QE was not meant to bring back manufacturing in the US.The BRICS are not some mathematically brilliant construction hedging their futures, but a group that barely gets along, if even. Manufacturing has also never been important for a reserve currency. Not sure where you got this bizarre idea. The comment that follows about Russia is equally bizarre as US imports from Russia are nearly non-existent currently. Your last comment on Mexico is also ridiculous. Why do you even say nonsense when you understand that you are not familiar with what you are talking about?

[@effexon]

@@theonlycaulfield Im saying with big debt and not much to show for it has risks. US is not dependent on russia but europe still is in some countries. US has china behind curtain, though it has been reduced and scrutinized lately. Im trying to look into 2030s and 2040s with current trends.

[@theonlycaulfield]

@@effexon Given that the interest payments will continue to go up on US debt, the debt problem will unfortunately, for people in the US, likely be partly solved through much higher inflation by further loosening the monetary supply.

[@effexon]

@@theonlycaulfield yes, this "money printing" or inflation in technical terms(nowadays usually means debt papers which gov then pays interest for), was what I was referring to when government runs out of money. Issue is less severe if majority of that debt is held by US corporations and private people thus can expect them to pay taxes and consume to boost economy with that, but incase those are held by export heavy savings oriented foreign people and companies, that is problem over time(they say japanese debt is mostly domestic thus "good kind", but still leaves very little room to maneuver to adjust economic policies).

[@blairhakamies4132]

Fsntastic👏. Thank you for sharing. 👌

[@charidimosmakrakis3166]

too little too late

[@jellekastelein7316]

The problem isn't just the size of the stimulus. If you poor a lot of money into the bottom half of your society, and they use that money to buy essential goods, and that money flows ultimately upward towards the extremely wealthy, but you never raise taxes on those extremely wealthy people and corporations, well then who will ultimately pay for that stimulus? Ultimately the ones who pay will be the lower and middle segments of society through taxation and the money will just be a gift to the rich in disguise.

[@Trials_By_Errors]

Modi is More Socialist and Kensian than All westen Leaders Combined. But still he is Right Authoritarian😂.

[@Lodimerg]

I feel we never recovered. Money worth as used toilet paper.

[@MrPsaunders]

Hopefully after Liam Byrne's ideologically wrong note and Labour left power, Liam was turned down by a number of 'top' employers, eventually having to sign on to Ian Duncan Smith's Universal Credit. Realising just how bad and unjust the outsourced DWP is to people, struggling within a bust system, he turned into a campaigning socialist. That's exactly how it turned out, right?

[@gordonlinton3555]

Ludicrous take on the reasons for Brexit and the implications

[@SS-qk8oc]

He does not “get it”.

[@eddybiaz5677]

You debauch the currency and you expect to expect financial stability? The bankruptcy policies should be employed let the punters go belly up and clean the deck. But this guy is part of the problem. Let the market work. This guy is a vested insider. He should be punished!

[@preshisify]

😷☕🇺🇸

[@michaelcap9550]

Time to put the New Deal to rest.

[@terrypetty8556]

We must always learn from the New Deal.

[@witHonor1]

1:45 before the point began. Refund please. Uh uh. Still 4 minutes in and nothing. Can you edit yourself so I don't waste my time on your lack of credentials. 4:23. Finally.