The Global Financial Crisis: A Decade Later – Still in the Danger Zone

Alternative Information and Development Center (AIDC) | 17 September 2018

15 September 2018 was exactly ten years since the collapse of Lehman Brothers, ultimately culminating in a moment known as the 2008 global financial crisis. The impacts of the GFC is still felt today, manifesting itself in austerity and further transfers of wealth from the poor to the very rich. Real wages are falling and profits are soaring, leaving the poor more dependent on debt to subsidise falling incomes. The very instruments implemented to get the global economy out of crisis has in fact exacerbated the situation. The injection of currency (known as quantitive easing) into the global economy, by central banks has resulted in increased borrowing and rising debt. Consequently the global economy is in a more precarious position than what it was a decade ago.

Global wealth concentration has increased over the past decade

South Africa has also been affected by the global financial crisis, a stagnant global economy and the recent trade war has meant reduced global demand for minerals. Consequently South Africa has experienced a job bloodbath of 68 000 jobs in the mining sector over the past 10 years, with at least another 30 000 jobs expected to be cut in the next year or two.

Here are 5 useful reads to get to grips with the global financial crisis, 10 years on: 

1. Ten years on, the crisis of global capitalism never really ended
   Highlights the political instability, and rise of right wing politics – that has emerged and will deepen following the global financial crisis, and alludes to what needs to be done in the face of unfolding adversity.
2. Ten years after the crash, the financial sector is still out of control
   Suggests that we need to make banking and finance serve the people – rather than the other way around.
3. Next financial crisis ‘has begun and will be worse than 2008’
   Argues that global economy is in danger once more, thanks to huge corporate debt, and the prospect of rising interest rates in the United States.
4. Financial Crisis 10 years on – How the response to the last crisis laid the foundations for the next
   Explains how the global financial crisis was caused by 3 inter-related factors, the current challenges facing the global economy and what emerging markets can do to protect itself from a major debt crisis.
5. We have a choice: business as usual, or breaking with neoliberalism.
   Illustrates how the 2008 GFC was not an accident, but the outcome of the logic of the free-market system, and that these rules remain in place. Suggesting that we need a radical break from the current paradigm and an ending of the  “Too big to fail” discourse on the banking sector.