When the financial crisis commenced in 2007 I did not fully comprehend neither the extent of its impact or the prolonged ramifications of it, blame it on my youthful naivety or the fact that I was more concerned with my GCSE’s and assumed it did not affect me. How wrong was I though? When the banking collapse occurred in 2008 that saw the largest bankruptcy filling in the United States history, the disintegration of Lehman Brother America’s fourth largest investment bank, that had a domino effect on other financial firms I still was none the wiser to the global consequence, however hindsight is 20/20 and now not only are the effects of the collapse of the financial market apparent to me they are also felt.
So what was the cause of the calamity that brought the world and its social rights to its knees? To put it simply the financial crisis occurred as a result of loans, more specifically subprime loans, being made readily available to individuals who were not able to carry the debt load. This was allowed to happen due to the market fundamentalist philosophy that infiltrated US politics which ensured there were nominal regulations upon financial institutions. Rather than write a thesis on how and why the financial markets collapsed that is filled with City jargon, although if you really want to know I would recommend Marx who explained it with such simplicity yet lucidity: the system is inherently filled with contradictions which leads to its meltdown. Instead I want to explore the consequence of the financial meltdown and who has emerged the winners and loser from this catastrophe as although superficially it seems everyone has been negatively affected hence are losers in the situation the elite however took notice of Winston Churchill and saw the opportunity in the difficulty.
Six years on since the meltdown of the financial markets and the situation has been exacerbated with global unemployment hitting 202 million people that is the more than the population of Russia and Canada combined. The figure is so astronomical that it is difficult to grasp. While people in all corners of the world have endured unemployment, homelessness and even death as a result of the financial crisis the global elite, by global elite I am referring to the global transnational class which includes state and international bureaucrats, media officials and executives of global corporations, have seen their wealth increase to excessive heights at the same time the rest of the world has been faced with austerity and have seen their social rights erode before their very eyes. Despite the meltdown providing a precise example of the failings of capitalism states continue to maintain that this crisis can be solved by continuous doses of toxic neo-liberal strategies. What has been and continues to be apparent is lemon socialism in other words ‘socialism for the rich and capitalism for the poor’. It is bewildering and perverse that people’s taxes are being used to prop up a poisonous system that is far from beneficial for them but extremely beneficial for the transnational capitalist class.
The losers in this epochal disaster are you and I and billions of other individuals throughout the world who have seen our social rights disappear before our very eyes. The global elite, particularly bureaucrats, have distorted the discourse with the help of the media regarding who is to blame for the crisis. The blame has shifted from the banks and unto the state principally the welfare arm of the state. The meltdown has provided a justification for bureaucrats to reduce the state and privatize education and healthcare which are vital social elements that constitute as part of our citizenship rights. What is even more worrisome however is that the fabric of our development, democracy, has lost the people have lost power over their own governments to the markets. For example private firms such as credit agencies determine the creditworthiness of countries; countries are effectively at the mercy of these agencies for they determine the access a government can have to capital. What we are witnessing is increased structural power of capital. The winners in this is are obviously the transnational capitalist class who’s economic interest it is to maintain the status quo.
Below is a fascinating and informative four part investigative documentary that uncovers the true story of the financial crisis.