1929, 1987, 2000, 2007 and 2018: haven’t we learned anything?
Notwithstanding the drastic adjustment to the stock markets in the way of 10%, the world’s biggest economy, the one that’s always ahead of everyone else in growth and also depression, the one that serves as the ultimate example of neoliberalism – America – has made a spectacular recovery since the 2007-08 crisis. With its property market constantly growing, unemployment at its lowest for a generation and stock markets booming, there is ample proof that this has been an exemplary recovery from an economy that ten years ago had a brush with catastrophe.
The US’s middle class is, however, miles away from rekindling its living standards from before the recession, and didn’t manage to recuperate all its wealth that had been endangered by the financial crisis. In fact, dogged by stagnant wages – despite a flourishing economy and financial sector – US wage earners are now confronted with a situation and pushed to extremes equivalent to those that prevailed throughout the mid-90s. America’s middle class is therefore being forced to make a full-on return to the past – a past once envied by Europe – as demonstrated by a Federal Reserve study showing an 8% drop in its wealth in twenty years! This regression is, however, turning well and truly into a rout on the less privileged, whose modest assets lost 22% over the same period. The poor are basically the damned, damned by a system that works for the rich who have increased their fortune by 146% since 1998! Income disparities are even more shocking: while 90% of US citizens have seen the fruits of their labour collapse by 50%, the richest 1% of Americans have enjoyed a 23% surge in their income!
As the stock markets seem to be stalling, or at the very least forced to adjust to the real economy where real people spend their days, let’s take a look at the Gateses, the Bezoses, the Zuckerbergs, the Musks and the Kochs of this world. They have certainly studied the Great Depression and the bankruptcies of 2007-08, but you could legitimately say that they haven’t learned a thing from them. The economy of the 21st Century is so far no healthier than the economy of the late 1990s because the capitalism of 2018 is still driven solely by the engine of finance.
In this zero–sum game of deception for civil society, giants like Apple possess abhorrent wealth, with theirs valued at 375 billion dollars. This will of course not be reinvested in their products but in financial markets and ingenious ways of paying as little tax as possible. In this world of 2018, entities like Apple and many others are nothing but gigantic speculative funds, of which only a fraction is put into technological innovation, and pretty much all of which benefits neither consumption nor society.
After the tragedies of the years 2007 to 2010, and while the middle classes are being torn apart at the seams in every Western nation, the happy 1% must be very seriously weighing up the consequences of their actions and decisions. They definitely mustn’t hide behind the pretext – that has been repeated to death – that they couldn’t have foreseen this new and unavoidable catastrophe that was aggravated – or created – by their rampant greed. While the financial world seems to need saving from hyper-volatility and hyper-instability – its hallmarks – we cannot ignore the consequences of our actions any longer.