Thu, 20 September 2018
Professor Adam Tooze latest book, Crashed How A Decade of Financial Crisis Changed the World, takes a detailed look at the fallout from the 2008 financial crash following the subprime mortgage crisis. Tooze takes a global view of the financial meltdown and shows how no part of our global banking system was left unaffected by this series of financial heart attacks. The windup to the crisis can be attributed to the surge in subprime mortgage in 2004 and the short-term, money-market based funding which led to the crisis in 2008. The market could have recovered if only small banks were investing in the subprime field, however, the systemic risk came from the biggest banks having such big investment in the shakiest subprime loan investments.
Tooze sees the US's technocratic response to the crash as fairly robust but one that led each side of the political spectrum in opposite direction--namely, the Tea Party & Occupy Wall Street. Tooze sees the contemporary Republican Party as absolutely opposed to the idea that government can create policies to correct market inefficiencies or its bad actors--it can only liberate. Beyond the US, Tooze believes that similar strains of populist and nationalism have sprung up in Spain, Greece, Portugal, and Italy. Tooze and Sam discuss how privatizing profits and socializing costs in the post-2008 crash are the by-products Obama and his administration choosing to save the banks and hand the people its cost while Americans lost their homes, jobs, and invested wealth.
So where are we now? According to Tooze, we are heading in the wrong direction towards a crisis, although one that is not as bad as 2008. America's relationship with emerging markets is a complex one that should concern the global community. But above all, the unwinding of Dodd-Frank will allow banks to work with fewer checks and increase the chances of market downturns in the future.
And in the Fun Half: George Mason asks Mercatus Center "new phone...lol who dis?", Jake Tapper: JOURNALIST--Alexandria Ocasio-Cortez addresses the $40 Trillion Question, Jimmy Dore has new fans, the Sierra Club & Raygun's tight spot, Jeff Sessions is flooding the immigration debate, everybody wants to talk about Jimmy Dore, James O'Keefe is back, baby!, Madea Benjamin protests the Hudson Institute's call for war with Iran, ICE & CBP claim they are unaware of health risks associated with child detention, plus your lovely calls and IMs!
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