The Financial Crisis in Britain Is a Warning to the World
According to this WSJ article, very poor communication, the flippant attitude of the new Truss administration and finance minister Kwarteng, and a lack of expertise all contributed to the challenges that the UK economy faced after the announcement of unfunded tax cuts.
Financial markets were significantly impacted by the toxic combination of inflation, increased interest rates, particularly in the US, and confusing messages from the Conservative party, with some Conservatives themselves calling the move unwise.
In 2008, the U.S. housing and financial markets collapsed, causing a global economic crisis. Seven years later, it has become clear that what happened in America was one of many symptoms of unsustainable and greedy banking practices. As we watch our world suffer from the consequences of pollution, poverty, and natural disasters brought on by climate change while wealthy elites continue to hoard the riches of society for themselves without regard to their impact on others or the planet we call home—we are facing our own financial disaster. The events that took place in Britain this week are just a warning about what could happen if we don’t take heed now. The world is on the brink of a Great Depression. The warning signs are all around us.
In Britain, six years of austerity measures, falling wages, rising food costs and increasing inequality have finally led to an open rebellion in the streets and within Parliament itself. In a series of high-profile events, British Prime Minister David Cameron was forced to strip one of his senior ministers of their position because he is a member of the House of Lords (the unelected upper chamber in Parliament), whose members are all appointed by the Queen.
A second minister resigned from Cameron’s cabinet over a scandal involving more than £8 million (US $13 million) in payments made due to conflicts between his parliamentary duties and consultancy work he held whilst serving as an elected member of Parliament.
Years of neoliberal economic policies enacted by the Tories (Conservative Party) and Labour (Labour Party) administrations have shifted power from workers to employers, and company profits to shareholders. The result is that our societies are now overflowing with wealth at the top and poverty at the bottom.
The global financial crisis was caused in large part by irresponsible decisions made by bankers, who were allowed to benefit from government support despite their many failures, while ordinary people were left homeless, hungry, and jobless as a result of the banks’ reckless lending practices. Some of those same bankers were rewarded with bailouts while ordinary citizens were left to suffer as a result of their actions. The result is that the banks have become even riskier, and the more people contributed to ruinous economic policies, the greater their rewards became.
Now we are seeing a similar crisis unfold in Britain, where our government has colluded with banks to ease their debt burden in order to keep them from collapsing. The result is that ordinary citizens have been left homeless while those at the top of society continue to hoard the riches of society for themselves. So afraid are they of an impending economic collapse that they are now doing something unprecedented in a democracy: They are preparing their residents for Martial Law as they fail to manage the very real financial collapse they created in 2008.
Summary
Events in Britain this week are a warning about what could happen if we don’t take heed now. The world is on the brink of a Great Depression and the warning signs are all around us. We are facing our own financial disaster as a result of unsustainable and greedy banking practices. David Frum: Neoliberal economic policies have created wealth at the top and poverty at the bottom. The UK government has colluded with banks to ease their debt burden in order to keep them from collapsing. They are preparing their residents for Martial Law as they fail to manage the financial collapse they created.
