As a reminder, my blog addresses economic issues from the perspective of what is commonly called “modern money theory”. (As the great philosopher Yogi Berra said, “you can look it up”—or Google it.) However, the subjects tackled go far beyond the topic of monetary theory, hence, I also draw on other traditions including Keynesian theory, the Institutionalist approach, and the work of Hyman Minsky (my dissertation advisor). Still, as indicated by the masthead the blog is mostly forward-looking–with a glance back to history. As Minsky always told me, “we stand on the shoulders of giants”. The perspective adopted in all my blogs is unashamedly progressive and unapologetically critical. As we always said in the 1960’s, “question authority”. If I haven’t pissed-off somebody each week, I’ve failed.
On to the topic for today: the lessons we should have learned from the Global Financial Crisis (GFC), but didn’t. Here we are, half a decade into the Collapse of Western Society.
Yes, you read that right. It’s over. I’ll say more about that in coming days. But let us review the recent past before we look to the future.Economonitor — Great Leap Forward
The Global Financial Crisis: No Lessons Learned
L. Randall Wray | Professor of Economics, University of Missouri at Kansas City
Randy's post is from a couple of years ago and no change... which is interesting..
ReplyDeleteOne thing, Randy says here "Wall Street’s share is back up to 40% of all corporate profits"
Could have been for the quarter Randy originally wrote the piece back a few years but today, I believe as far as a % of SP500 earnings, the "Financial Sector" is back up to about 20% where they were for quite a while before the era that fomented the GFC.... so sort of "back to normal" there....
The govt is just not growing its topline spending, this number was about 4.325T in FY 2011 and was only about 4.200T in the FY 2013 just completed... so we are down about 125B annual since 2 years ago and banks just cannot grow credit in this type of environment as incomes are not growing.... so they are probably maxed out here at 20%...
The "Budget Deal" looks like a "breakeven" at best as far as 2014 compared to 2013 so more 'muddle thru' next year...
One hope is "Obamacare" so-called, if the technically incompetent Dems could ever get the system operational, I think this will lead to a meaningful increase in govt spending at whatever point they get the system operating in 2014 and could be a big stimulus....
If it happens in 1Q CY2014, this coupled with the normally strong seasonal flows from the EITC may lead to a bit more than "muddle thru' next year in the first half... and banks may see some increase in non-govt incomes that they can leverage... without that they are in about a holding pattern on credit growth...
rsp,
It's a sad day when most new growth in net private savings is expected to come from public-subsidized health-repair payments.
ReplyDeleteFrankly, that sounds like more trickle up than trickle down.
Even if O-Care adds some top-line public investment in itself, will it do anything to slow the growing disparity between haves & have-nots?
Can O-Care resuscitate a Middle Class?