Editorial: Learning loss is bad everywhere, and demands immediate action
The recent stock market meltdown in the United States and Europe was no laughing matter. The Dow Jones lost 7 percent in just a few trading sessions. Europe was in for a major economic shock when many of the continent’s banks would have to be closed because of the liquidity issues caused by the U.S. and European losses.
For Europe, this is a crisis. The region has been one of the fastest growth engines in the history of the world, but the lack of liquidity in its financial markets has led to a deep, prolonged recession.
But Europe is not the only place where this is happening.
The problem with our current economic model is that it relies on a very specific kind of borrowing and lending to fuel economic growth. It’s true that banks are being repaid, by the taxpayers of the United States and Britain, of course, for trillions of dollars in bad loans, and it’s also true that the financial markets are filled with hundreds of billions of dollars that are still chasing the same, risky, phantom assets as before the crash of 2008. But the problem is that the entire financial system is based on unsustainable debt that comes at the expense of the real economy.
A huge part of that debt is based on the financial products that the banks are selling. This has two key problems.
First, the lending that the banks are doing cannot be repaid, and they have to use this to buy up assets that are not sustainable in the real economy.
Second, they are taking out loans that are going to be repaid by future generations.
Both of these problems are why I view this entire financial crisis as the end of capitalism. This crisis forces a fundamental change in our economic model. That change will result in the loss of millions of jobs, many of them low-paying and the loss of trillions of dollars of wealth. That wealth will be lost because there is an over