In a column Martin Wolf, the Financial Times chief economics commentator, discussed, “Why so little has changed since the financial crash”. He recognises several significant piecemeal changes have been made but notes politicians and policy makers have only tried to get us back to a better past, whereas in the period after the Great Depression of the 1930s people wanted change and they got it.
His conclusion is that since 2008, “The chief aim of post-crisis policymaking was rescue” and “this prevented collapse” but “the financial system is much as before”. “Policymakers have barely questioned the relative roles of government and markets”. And, “few question the value of the vast quantities of financial sector activity we continue to have, or recognise the risks of further big financial crises”. And Wolf finds this “shocking” given “there is so little confidence that we could (or would) deal effectively with another big recession, let alone yet another big crisis”.
Wolf asks, “What explains the complacency?” Then suggests, “one reason might be the absence of good ideas”. But he immediately counters this by saying “there are some perfectly good ones”. However, “an all-embracing new ideology may be unavailable today”. Then, after suggesting “that is probably a good thing” he goes on to explains why it is in fact a very bad thing.
After suggesting, “a more likely cause of inertia is the power of vested interests”, because “today’s rent-extracting economy, masquerading as a free market, is, after all, hugely rewarding to politically influential insiders”, he notes the political consequences — “The centre’s complacency invites extremist rage” and “A better version of the pre-2008 world will just not do”. “People do not want a better past; they want a better future.”
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