Ricochet is the best place on the internet to discuss the issues of the day, either through commenting on posts or writing your own for our active and dynamic community in a fully moderated environment. In addition, the Ricochet Audio Network offers over 50 original podcasts with new episodes released every day.
Uncommon Knowledge: The 2008 Financial Crisis Ten Years Later
Ten years ago, the worst financial crisis since the Great Depression hit the United States and spread to other countries, including the United Kingdom. Here to discuss what happened then and where the world is now are former Federal Reserve governor Kevin Warsh and former chancellor of the exchequer George Osborne.
Kevin Warsh and George Osborne discuss the 2008 financial crisis, how they dealt with it at the time, what they would have done differently, and whether the economy is headed toward another downturn. Warsh discusses how the United States failed to realize how bad the crisis was until it was already too late. The crisis had a huge impact on Europe and the United States and set off a global panic. However, within two years the economy was already growing by 2 percent and the quantitative easing used by the Fed was no longer needed as the world changed.
Warsh and Osborne analyze the state of the US and UK economies today and the trade war with China. They argue that there are two ways to approach China: either try to contain it or co-opt it. Innovation and growth in the United States are necessary to prevent China from gaining more purchasing power and greater influence on the international market. Osborne analyzes the effects Brexit could have on the single market and trade with the UK’s geographically closest trading partner, France, and airs his concerns about what Brexit means for the UK’s future. He argues that Margaret Thatcher, who helped create the single market in the EU, would never have voted to leave it.
While a future financial crisis is always possible, Warsh and Osborne end on optimistic notes: that there is still room for growth in the two countries’ economies and that a better financial future for many Americans and British is still possible through good economic policies, including lower taxes and less regulation.
Recorded on September 28, 2018
Published in General
Swell interview. I would like to have seen the two bankers be more critical of Fed actions before/during/after the “panic”. The captain of the Titanic at least took responsibility for the results of his actions. The Fed never has.
The guests are spot on about Paul Krugman and his ilk treating macroeconomics as if it’s a hard science like physics or chemistry. It’s kind of scary how this small priestly caste (who’s commentary is always dripping with arrogance and overconfidence) seems to have a monopoly on general public opinion and economic policy, with the financial well being of so many people hanging in the balance…
One thing I find really disturbing 10 years after the crisis is how the general public opinion (at least among my millennial generation) has been shaped to place essentially no blame on government policies, and all of the blame on the private sector. It’s at the point where people are conditioned like Pavlov’s dog to immediately distrust any defense of free market ideas, as if they’re listening to a tobacco lobbyist explain that cigarettes aren’t unhealthy.
Two examples sum it up for me
I think there’s plenty of material to develop a counternarrative aimed at millennials, not only about the housing crisis but the media in general.
Agree.