Some food for thought on how the same mistakes should not be made
The Financial Crisis Five Years Later: Response, Reform, and Progress In Charts
In the fall of 2008, our economy faced challenges on a scale not seen since the Great Depression. The crisis was caused by many factors. Among them were an unsustainable housing boom fueled in part by the easy availability of mortgages, financial institutions taking on too much risk, and the rapid growth of the nation’s financial system with regulations that were designed for a different era. Forces built up over many years until the crisis reached its apex in September of 2008.
The Financial Crisis: Lessons for the Next One
OCTOBER 15, 2015 BY ALAN S. BLINDER MARK ZANDI
The massive and multifaceted policy responses to the financial crisis and Great Recession — ranging from traditional fiscal stimulus to tools that policymakers invented on the fly — dramatically reduced the severity and length of the meltdown that began in 2008; its effects on jobs, unemployment, and budget deficits; and its lasting impact on today’s economy.
Ten years on from the financial crash, we need to get ready for another one
Wed 12 Sep 2018 06.00 BSTRobert Skidelsky
The lessons of 2008 have not been fully learned: stop risky lending by banks, address fiscal policy and reduce inequality.
The collapse of Lehman Brothers on 15 September 2008 unleashed the worst global downturn since the Great Depression of 1929. And it was almost entirely unanticipated. Ten years on is a good time to ask what governments, policymakers, and economists might learn from this catastrophe – how to prevent future ones, and how to overcome them if they happen. Of these two, prevention is far better than cure. Once a downturn gathers momentum, the scale of intervention needed to reverse it becomes frighteningly large. Budget deficits balloon, public debts soar, governments take over banks – all conjuring up visions of looming state bankruptcy, or worse, state control over the economy. So the most important question is: how can these catastrophes be prevented?
Fiscal Austerity After The Great Recession Was A Catastrophic Mistake
Frances Coppola03:07pm EDT
Nearly nine years ago, the world was rocked by the worst financial crisis since 1929. The collapse of Lehman Brothers set off a domino effect of bank failures which rippled round the world. Massive runs on financial markets pushed interest rates sky-high: investors dumped riskier investments and fled for the safety of traditional havens. Fearing a repeat of the 1930s, central banks poured money into distressed markets and propped up asset prices with massive asset purchase programs, while governments rescued failing banks. In 2009, the G20 embarked on a coordinated program of fiscal expansion designed to restore trade, promote growth and reduce unemployment around the world.
Are we witnessing the end of austerity — and what does that mean for Europe?
There was a time when European governments couldn’t utter a fiscal policy statement without mentioning the word “austerity.” Now, the concept seems to have all but disappeared from public discourse.
Is the era of austerity finally over, and did austerity policies — essentially, those encompassing spending cuts and tax increases — achieve what they were supposed to achieve?
The financial crisis, health and health inequities in
Europe: the need for regulations, redistribution
and social protection
Roberto De Vogli
Extracts from Abstract
Evidence indicates that the Eurozone crisis disproportionately affected vulnerable populations in society and caused sharp increases of suicides and deaths due to mental and behavioral disorders especially among those who lost their jobs, houses and economic activities because of the crisis.
Unfortunately, policy responses after the crisis in most European countries have mainly consisted in bank bailouts and austerity programs. These reforms have not only exacerbated the debt crisis and widened inequities in wealth but also failed to address the root causes of the crisis. In order to prevent a future financial downturn and promote
a more equitable and sustainable society
Financial crisis, austerity, and health in Europe
Marina Karanikolos, Philipa Mladovsky, Jonathan Cylus, Sarah Thomson, Sanjay Basu, David Stuckler, Johan P Mackenbach, Martin McKee
The financial crisis in Europe has posed major threats and opportunities to health. We trace the origins of the economic crisis in Europe and the responses of governments, examine the effect on health systems, and review the effects of previous economic downturns on health to predict the likely consequences for the present. We then compare our predictions with available evidence for the effects of the crisis on health. Whereas immediate rises in suicides and falls in road traffic deaths were anticipated, other consequences, such as HIV outbreaks, were not, and are better understood as products of state retrenchment. Greece, Spain, and Portugal adopted strict fiscal austerity; their economies continue to recede and strain on their health-care systems is growing. Suicides and outbreaks of infectious diseases are becoming more common in these countries, and budget cuts have restricted access to health care
Turns Out That Trillion-Dollar Bailout Was, in Fact, Real
A new Washington Post piece fudges the history of the 2008 financial crash
Matt Taibbi March 18, 2019 5:11PM ET
As Gretchen Morgenson pointed out when information about Fed bailout programs first became public, just six banks — JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley — were the recipients of 63 percent of the Fed’s average daily borrowing, representing about a half-trillion dollars at peak periods just for those firms.
Financial Crisis Cost Tops $22 Trillion, GAO Says
Eleazar David Melendez
The 2008 financial crisis cost the U.S. economy more than $22 trillion, a study by the Government Accountability Office published Thursday said. The financial reform law that aims to prevent another crisis, by contrast, will cost a fraction of that.
“The 2007-2009 financial crisis, like past financial crises, was associated with not only a steep decline in output but also the most severe economic downturn since the Great Depression of the 1930s,” the GAO wrote in the report. The agency said the financial crisis toll on economic output may be as much as $13 trillion — an entire year’s gross domestic product. The office said paper wealth lost by U.S. homeowners totalled $9.1 billion. Additionally, the GAO noted, economic losses associated with increased mortgage foreclosures and higher unemployment since 2008 need to be considered as additional costs.
More Than 10,000 Suicides Tied To Economic Crisis, Study Says
Melanie Haiken05:39pm EDT
A dramatic spike in suicides between 2008 and 2010 can be linked with the economic crisis, according to a study published today in the British Journal of Psychiatry.
Researchers from the University of Oxford compared suicide data from before 2007 with the years of the crisis and found more than 10,000 “economic suicides” associated with the recession across the U.S., Canada and Europe.
The 15 People Who Benefited Most from the Financial Crisis
Mar 23, 2020 Staff Writers
The 2008 financial crisis brought the world to its knees. No one expected that so suddenly after the devastating dot.com bubble, another fiscal storm would sweep over the world. And yet, just seven years after the stock market took an unexpected dive, the whole financial system buckled under the weight of bad mortgage debt. Many believed that if something was not done to stop the breaking dam, the world would be drowned by a tsunami of deflationary pressure. Lehman Brothers, one of the longest-standing and most-trusted banks in the world went under. Merrill Lynch, AIG, Freddie Mac, Fannie Mae and countless others threatened to follow suit. Had it not been for the emergency measures put in place at the urging of both Presidents Bush and Obama, all would surely have collapsed.