the profound effect that the crisis has had on the political fabric. Economies may be limping back to health, but the political elites are still reeling. Ask those up against Donald Trump in the US and Marine Le Pen in France or facing rising xenophobia in Europe’s formerly communist states. Politics looks anything but normal.
The crash and the subsequent depression broke the confidence of a generation of political leaders. All the guff they had learnt about a new financial capitalism, self-equilibrating markets and the end of boom and bust was shown to be, well, guff.
Seven years on, bankers are once again clinking champagne glasses. By and large, they got off scot free. Not so politicians who believed their own propaganda and embraced the laissez faire Washington Consensus as the end of history. Capitalism survived the crash, but at the expense of a collapse of trust in ruling elites.
Globalisation has long been a source of rising inequality. Its rewards have accrued disproportionately to the top 1 per cent. Middling incomes on both sides of the Atlantic have been stagnating since the 1980s. Politically, bankers making millions from socially useless transactions and corporate executives paying themselves whatever they liked was bearable while economies were booming. The crash stripped away the mysteries to show that, for most people, anything-goes-globalisation is a source of acute insecurity.
In Europe, the stresses have been amplified by the failure to strike a balance between austerity and solidarity within the half-finished project of economic union and, more recently, by the tide of refugees fleeing the horrors of the Middle East.
Even the most powerful states cannot be sole masters of the economic and physical security of their citizens. It is striking though how deep the hostility has penetrated. Lefties are not alone in railing against the claimed iniquities of globalisation. Right-leaning eurosceptics who want Britain to leave the EU say they are fighting against “big business, big banks and big politics”.
Rising living standards would certainly help. But the disaffection runs deeper. Politicians have still to explain how economic interdependence can be made to work for the middle classes. Nationalism is thriving on the uncertainty.
Posted from Diigo. The rest of my favorite links are here.