Monbiot, G. (2014) “Growth: the destructive god that can never be appeased“, The Guardian, 19 Νοεμβρίου.
The blind pursuit of economic expansion stokes a cycle of financial crisis, and is wrecking our world. Time for an alternative
Another crash is coming. We all know it, now even David Cameron acknowledges it. The only questions are what the immediate catalyst will be, and when it begins.
You can take your pick. The Financial Times reported yesterday that China now resembles the US in 2007. Domestic bank loans have risen 40% since 2008, while “the ability to repay that debt has deteriorated dramatically”. Property prices are falling and the companies that run China’s shadow banking system provide “virtually no disclosure” of their liabilities. Just two days ago the G20 leaders announced that growth in China “is robust and is becoming more sustainable”. You can judge the value of their assurances for yourself.
Housing bubbles in several countries, including Britain, could pop any time. A report in September revealed that total world debt (public and private) is 212% of GDP. In 2008, when it helped cause the last crash, it stood at 174%. The Telegraph notes that this threatens to cause “renewed financial crisis … and eventual mass default”. Shadow banking has gone beserk, stocks appear to be wildly overvalued, the eurozone is bust again. Which will blow first?
Or perhaps it’s inaccurate to describe this as another crash. Perhaps it’s a continuation of the last one, the latest phase in a permanent cycle of crisis exacerbated by the measures (credit bubbles, deregulation, the curtailment of state spending) that were supposed to deliver uninterrupted growth. The system the world’s governments have sought to stabilise is inherently unstable; built on debt, fuelled by speculation, run by sharks.
Σχετικές αναρτήσεις:
- Dollar, D., Kleineberg, T. & Kraay, A. (2014) “Growth, inequality, and social welfare: Cross-country evidence“, VoxEU Organisation, 19 Νοεμβρίου.
- Mitchell, B. (2014) “Greece – return to growth demonstrates the role of substantial fiscal deficits“, Bill Mitchell Blog: Modern Macroeconomic Theory – Macroeconomic Reality, 19 Νοεμβρίου.
- De Neve, J. E. & Norton, M. (2014) “Busts hurt more than booms help: New lessons for growth policy from global wellbeing surveys“, VoxEU Organisation, 08 Οκτωβρίου.