Posts Tagged ‘crisis’

nick anderson

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Posted: 13 April 2015 in Uncategorized
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Greece

According to the data in the chart by Max Roser, Brian Nolan, and Stefan Thewissen, every decile of the Greek population lost ground after the global financial crash and austerity measures were imposed in that country.

As Matt O’Brien explains,

The simple story, as you can see, is that there was a big jump for everybody after the junta was pushed out in 1974, a big stagnation from the mid-80s to the mid-90s, an even bigger jump, especially for the rich, after that, and then a big crash that’s erased 30 years of gains—or more. Greece’s rich have done a little better than the rest, with their real disposable incomes “only” falling to 1985 levels. But its poor have fallen even further, all the way back to where they were in 1980.

That’s why it’s no exaggeration to say that Greece really does have a humanitarian crisis on its hands. The left-wing Syriza government has made this a priority—they want food stamps for the hungry, healthcare for the sick, and electricity for people who can’t afford to keep on the lights—but even with a limited victory in its first round of negotiations with Europe, it’s not clear where the money’s going to come from. Or if it will even have what it needs to pay back its creditors.

But, unless a solution is found—and soon—both Greece and, with it, the project that is Europe will collapse.

 

Apparently, there’s a new documentary film [ht: ja]—Boom Bust Boom, directed by Monty Python’s Terry Jones—whose aim is to to popularize the work of Hyman Minsky.

Minsky’s genius was to show that financially complex capitalism is inherently unstable. Under conditions of stability, firms, banks and households will, over time, move from a position where their income pays off their debt, to one where it can only meet the interest payments on it. Finally, as instability rises, and central banks respond by expanding the supply of money, people end up borrowing just to pay back interest. The price of shares, homes and commodities rockets. Bust becomes inevitable.

This logical and coherent prediction was laughed at until it came true. Mainstream economics had convinced itself that capitalism tends towards equilibrium; and that any shocks must be external.

This is the latest attempt, in a long sequence since the crisis of 2007-08, to rediscover and examine the implications of Minsky’s work (which I’ve discussed many times on this blog).

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I’ll be heading out to the University of California-Riverside in a couple of weeks, to participate in a conference in honor of my friend Stephen Cullenberg (who served as the dean of the College of Humanities, Arts, and Social Sciences from 2006 to 2014), on the topic of “Unsettling the University: Confronting Capitalism and the Crisis of Higher Education.”