The latest financial market crisis with the intensified signal of the Lehman Brothers insolvency on September 15, 2008 led to deep shocks or shockwaves in politics and the economy. At least in politics, the ideology of unfettered financial markets generating prosperity was first abandoned. Market fundamentalist policy that rejected creative state interventions fell in this suction. Bailout programs in the billions for the banks and previously tabooed economic programs with labor market stipulations were put on the table. Even the market-optimistic majority-media suddenly switched over to the crisis susceptibility of the financial system.
The deficient reporting about early crisis signs before 2008 was part of the failure of the media. For that reason, the Lehman Brothers bankruptcy could only be seen as a completely unexpected fateful blow appearing from nowhere. Prevailing mainstream economics could not be shaken in its neoliberal ideology by the shock of collapsing financial markets.
The great euphoria about financial markets misunderstood as ultra-stable prevailed when this dependence on private capital supply was legally created. Experiences with the crisis susceptibility of financial markets over ten years teach that legal security systems must be freed from dependence on capital markets. As the concept of the social market economy teaches, social risks arising through no fault of our own that cannot be overcome from our own strength must be governmentally cushioned in a wage-centered society.
Is there a way out of the dynamic of the financial market crisis? Yes; wealth and income must be reduced through redistribution. Real economic production through consumption could be strengthened, particularly by low income persons along with the urgently necessary expansion of public investments. The pressure of the financial streams on the financial markets could be reduced by a far-reaching redistribution on one hand and strengthening sustainable
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Cover by: Ben Gregory
Publication date: 04/05/2020
According to the neoliberal myth, higher profits would lead to more investments and more jobs. In truth, higher profits led to corporations buying back their stock and speculation on foreign currencies
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