By Rob Hoveman
Downloading PDF. Please wait... Issue 2792

How the rich crashed the system—and made us pay

This documentary looking back on a decade of austerity reminds us who’s to blame for the financial crisis—but also that we can fight
Issue 2792
A man with a megaphone leads a large demonstration in Athens, 2015

The documentary includes reminders of anti-austerity resistance—such as the strikes in Greece (Picture: Workers Solidarity)

In 2008 the world’s financial system almost collapsed. Financial traders—people who moved around trillions of dollars on behalf of the world’s multi-billionaires—had pushed their speculation too far.

The fall of Lehman Brothers in the US triggered a crisis of the trust on which the whole speculative bubble rested.

Gordon Brown as British prime minister then helped to coordinate a massive rescue plan for the financial institutions. This bailed them out whilst the rest of us suffered austerity for the next dozen years and more.

As Edward Luce put it about our current situation in the Financial Times newspaper recently, this was “socialism for the rich, capitalism for the poor”.

This is the background to an ­excellent two-part BBC documentary, The Decade the Rich Won, which everyone should see.

The programme is really about the effects of what came about after the bailout—the so-called “quantitative easing” invented by then Bank of England governor Mervyn King.

Quantitative easing is the buying of government bonds by the central bank which are traded by those same speculators who almost crashed the system.

To put it more simply the central banks simply printed vast amounts of money and scattered it across the financial markets.

Quantitative easing took off not just in Britain but in all the major Western central banks in 2009. Since then, the Bank of England alone has injected a massive £900 billion of cash through this.

It was supposed to stimulate economies that were bordering on stagnation following the 2008 crash. But as King makes clear in the second part, it failed to lift the British economy out of low growth.

Instead, it simply massively enriched the rich by inflating asset prices such as the price of stocks and shares and property. This is also the story of the last two years of lockdown.

The programme interviews some of the main players, particularly in Britain. Most pathetic of them perhaps is the appalling Nick Clegg, former Lib Dem leader and deputy prime minister.

He hypocritically talks about the need for fairness. Yet he then says he could see no alternative to further enriching the wealthy who had been responsible for the original collapse.

But the programme also reminds us of the political as well as economic consequences. Three of these were—and still are—of most importance.

The first was the development in the establishment parties of that hypocritical agenda for “fairness” or, as Boris Johnson now puts it, “levelling up”. In its most radical and admirable form, it gave rise to Jeremy Corbyn becoming leader of the Labour Party.

The second was the rise of the populist right, represented in the programme by Donald Trump’s former chief strategist Steve Bannon.

Rancid reactionary people took the opportunity to opine against the elites and the fact they had done so well whilst the rest of us suffered.  This is a tide Johnson also rode in his Brexit campaign.

But the third was the resistance that erupted against austerity and the rapidly widening gap between the rich and the rest of us. The programme is full of the most fantastic reminders of this. It includes mobilisations against austerity imposed on Greece, around Occupy in the US, and in Britain and many other places.

With the price of commodities now rapidly rising, central banks are now trying to roll back on quantitative easing and raise interest rates. That’s despite the fact that inflation hasn’t actually been caused by quantitative easing and low interest rates.

Once again it is we who have to pay for the crisis of the system from which the rich have become so much richer. But we can take solace from this programme that there will be further massive resistance to come.


The Decade the Rich Won is available now on BBC iPlayer

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