Central Banks as Engines of Income Inequality and Financial Crisis

This September 2017 marks the nineth year since the last major financial crisis erupted in 2008. In that crisis investment banks Bear Stearns and Lehman Brothers collapsed. So did the Fannie Mae and Freddie Mac, the quasi-government mortgage agencies, that were then bailed out at the last minute by a $300 billion US Treasury money injection. Washington Mutual and Indymac banks, the brokerage Merrill Lynch, and scores of other banks and shadow banks went under, or were forced-merged by the government, or were consolidated or restructured. The finance arms of General Motors and General Electric were also bailed out, as were the auto companies themselves, to the tune of more than a hundred billion dollars. Then there was the insurance giant, AIG, that speculated in derivatives and ultimately required more than $200 billion in bailout funds. The ‘too big too fail’ mega banks—Citigroup and Bank of America—were technically bankrupt in 2008 but were bailed at a cost of more than $300 billion. And all that was only the US. Banks in Europe and elsewhere also imploded or recorded huge losses. The US central bank, the Federal Reserve, helped bail them out as well by providing more than a trillion US dollars in loans and swaps to Europe’s banking system as well.

by Jack Rasmus



populism against liberalism?

What Geert Wilders and the Antilles can tell us about tensions between populism and liberalism

‘Populism’ and ‘liberalism’ are often viewed as being in opposition to one another, but many ‘populist’ parties nevertheless cite liberal values in making their case for particular policies, such as a reduction in immigration. Ben Marguliesassesses the case of Geert Wilders’ Party for Freedom and its approach to the six Caribbean islands that form part of the Kingdom of the Netherlands. He argues that the case illustrates how populist parties can use liberal values instrumentally to push for favoured policies, even when there is no apparent clash between a liberal ‘in’ group and an illiberal ‘out’ group.



Five views: Is populism really a threat to democracy?

From LSE EUROPP blog

on recent trends in democracies

Three ways in which the French presidential election reflects Western European trends

The French presidential election has already produced high drama, with Emmanuel Macron and Marine Le Pen ultimately advancing to the second round on 7 May. But were their parallels with the first round of voting and developments in other European countries? Caterina Froio draws together three key ways in which the election has reflected Western European trends, but argues that Macron’s ability to successfully oppose the establishment from within stands out as unique in the European context.