Just how much is the finance sector going to cost the US taxpayer and the US economy? Counting the cost of the financial damage in lost homes, lost jobs, lost output, lost pensions, lost investments…..is too challenging a task for this humble analyst. But lets just count the cost in terms of guarantees.
20th September, 2008
In the midst of all this tragedy and chaos, one has to savour the moment. The sight of all those free-market capitalists, trained by economists at the Chicago School of neo-liberalism, handing over to ‘big government’ the financial system of the biggest free market economy in the world.
19th September, 2008: My comment for the Guardian’s site, part of a debate on the Credit Crunch organised by the new economics foundation, of which I am a fellow…
Bankers have gone to great lengths to damage our confidence in the banking sector. And loss of confidence and trust on this scale can’t be fixed by banning a few short-selling speculators or by nationalising a bank here, an insurance company there. Nor is confidence restored when ministers meet up with bankers on the quiet, and grant them monopoly powers (as with Lloyds).
15th September, 2008.
To address this very grave global financial crisis effectively, one needs to analyse it correctly. A wrong analysis results in wrong conclusions and solutions, just as a wrong medical diagnosis can lead to wrong, often life-threatening treatment. Orthodox economists, who have for so long turned a blind eye to the finance sector, to privatised credit creation and its role in fuelling asset bubbles, do not understand this crisis. They did not predict this crisis. And their deeply flawed economics mean they cannot therefore resolve this crisis. Indeed they are supremely irrelevant to this crisis.
15th September, 2008.
Today’s news – of the collapse of Lehman Brothers, the sale of Merrill Lynch and of the difficulties of AIG – are momentous and of truly historic significance. While there is much more to be said about what is going on within the financial system, today I want to stand back and look at the bigger picture.
You have to admire the spin. The US Treasury Secretary, Comrade Hank Paulson, pictured here, announced today, Sunday 7th September, 2008 that the US government is natonalising two huge US banks, Fannie Mae and Freddie Mac. Which means in effect that Comrade Paulson is socialising the losses of the shareholders and investors in these banks - $5.4 trillion of guaranteed mortgage-backed securities (MBS) (mortgage backed securities) and debt outstanding. These liabilities are equal to all the publicly held debt of the United States. This in the words of Prof. Roubini is ’socialism for the rich, the well connected and Wall St.” (see below).
Had the privilege, together with other co-authors of the Green New Deal - Colin Hines, Jeremy Leggett and Tony Juniper – of addressing the annual conference of the Green Party yesterday. It was a moving and historic event. The Greens have finally come to their senses and elected a leader – and a brilliant one at that – Caroline Lucas.
Caroline is a principled, savvy person – just the sort of leader the country needs to deal with the greatest security threat in our history – the potentially catastrophic impacts of climate change. Look here for her speech.….which happily for us, included an endorsement of the Green New Deal.
A Mr. David Smith in a letter to the Financial Times, (29 Aug 08) has suggested we brand this global recession ‘the bankers’ recession’. He has my support and enthusiastic commitment to raising awareness of the brand. Especially after today’s UK news.
A response to the "Triple Crunch" of financial crisis, climate change and oil depletion. Read the report published by the Green New Deal Group and nef (new economics foundation).
Welcome to my blog about the financial crisis. I'm Ann Pettifor, author and analyst of the global financial system, and co-author of the Green New Deal. I predicted an Anglo-American debt-deflationary crisis back in 2003, and am known for my work on sovereign debt and international finance, including Jubilee 2000. Currently a fellow of the new economics foundation and director of Advocacy International.