dagblog - Comments for "The Next Financial Crisis Will Make the Last One Look Like a Church Picnic. "

It is a crisis in the

David Seaton — Mon, 11 Jul 2011 06:55:29 +0000

It is a crisis in the capitalist system, a system which is beginning to reach its full potential as a system, the difference between today and what Marx could have ever predicted is like between the telegraph of his day and the Internet. Same principal of instant communication, but multiplied infinitely. This is happening in almost every area of economic activity and the system is gathering speed. If Marx was right it could crack apart. We'll see.

Oh you betcha, David.

cmaukonen — Sun, 10 Jul 2011 19:13:25 +0000

In reply to Raghuram Rajan, then the

Oh you betcha, David. Though I can't quite put my finger on it, I think it has a lot to do with an attitude change that happened while we were distracted by something else.

Raghuram Rajan, then the

David Seaton — Sun, 10 Jul 2011 17:29:22 +0000

In reply to The Next Financial Crisis Will Make the Last One Look Like a Church Picnic.

Raghuram Rajan, then the chief economist of the IMF, way back in 2005, was the only one to predict the crisis, for which he received a shit storm from Greenspan, Summers and all the usual suspects. He has got a book out now called "Fault Lines". which looks rather interesting.

Professor Rajan maintains that the crisis has political origins. As the income of the Middle and working classes has been stagnant for a long time the only way to keep them happy consumers was to lower interest rates and create perverse incentives to give NINJAs no-money down mortgages. The financial sector was encouraged to give away money at no risk to ourselves.

To sum up, the direct cause of the crisis is only a symptom of a much deeper problem in the globalized economy, of social service and of education and job training.