GFC

In 2009, economist Steve Keen walked from Canberra to Mount Kosciuszko after losing a bet that the Australian housing market would crash 40% after the Global Financial Crisis (GFC). However, he had been one of the few economists who actually predicted the coming of the GFC. And he still maintains that a crash in the Australian housing market is coming.

I know exactly where I was on August 9, 2007. It was a hot summer’s day — “debtonation day”.

Bankers all over the world had lost their collective nerve and refused to lend to each other. The globally synchronised financial system froze, and began its descent into sustained failure. It then took more than a year, and Lehman Brothers’ collapse, before the world understood the gravity of the crisis.

Ten years on, that slow-motion crisis, a prolonged period of disinflation, noflation and deflation, is still playing out.

As expected, the major banks are preparing to launch a media war against the Turnbull government’s proposed $6.2 billion bank levy, as outlined in Treasurer Scott Morrison’s May 9 federal budget speech.

Australian Bankers’ Association head Anna Bligh was furious. She said a campaign was being considered, claiming the government was playing “fast and loose” with the nation’s financial system.

When the global financial crisis (GFC) unfolded in 2008, the unemployment rate for 15 to 19-year-olds looking for full-time work in Australia increased from 15% to 25%. It has remained at this level ever since.

In July, it stood at 25.5%. However, in the 10 areas listed by the Department of Human Services as the most disadvantaged in the country, the youth unemployment rate is more than 40%.

At first glance, you might have mistaken London’s packed streets on November 10 for a Mardi Gras carnival. There young faces and large grins, combined with incessant whistle-blowing, trumpet-blasting and drum-beating. All mixed together to form the din of student protest.

The noise took shape and all of a sudden burst from the centre of the crowd, picked up by everyone else: “No ifs, no buts, no education cuts” — the main chants of the 50,000 students marching forward from Westminster to the destination of the Milbank headquarters of the Conservative Party.

Republicans are trumpeting their big gains in the November 2 midterm elections as a mandate to turn the country sharply to the right. Don’t buy it.

Mainstream media commentary on the election was largely set before a single vote was cast. Voters would correct President Barack Obama’s supposed leftward course in his first two years in office by sending a cabal of right-wingers to Congress.

The scale of the Republican victories — especially in House of Representative races, where the party now holds a comfortable majority — cemented the media’s impressions.

The Conservative Party, or Tories, has never really forgiven the British working class for demanding and winning the creation of the “welfare state”. Gains won included such things as free health care, council homes at affordable rents, and care for the elderly and vulnerable.

From the Tories’ point of view, these are all things individuals should sort out for themselves. The modern state should provide the same level of social protection as was available to Queen Victoria’s subjects in the 19th century.

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