The crisis is upon us. The PM & Chancellor have provoked the interlinked financial markets & the bear has woken, angry & hungry. What should the PM, with power, do? Remove the dart that wounds the beast. Calm & if necessary subdue it. Convene wise & experienced councils.
Combat climate change. But now, today: 1. Replace Kwarteng by Sunak, & cancel #budget2022. It has been an unmitigated disaster, politically & economically. 2. Reappoint a previous respected mandarin to head @hmtreasury to reassure the public & the markets.
3. Convene an open public meeting of the PM, the Chancellor, the Governor @bankofengland , the head of the @OBR_UK & the head of the @TheFCA to further reassure the markets. The turmoil must be stopped urgently before bankruptcies overtake policy. The markets take no prisoners.
This may not work because the crisis is led essentially by the @federalreserve in the USA. In which case, markets must be closed, key currency rates frozen at agreed levels, major bank bankruptcies anticipated & managed for the public good, & the #GreenNewDeal agenda implemented.
Although this is an international crisis, the solution is both national and international. Many governments & institutions must work together now, before the system collapses. Remember Putin is waging war on the West, and threatening nuclear Armageddon. And fracking Mother Earth.
@OPECSecretariat is central to ending the #SecondGreatFinancialCrisis. Rises in the world oil & gas prices started it. Falls can help end it. The G7 should expand to include 🇨🇳&🇮🇳, because they too do not want nuclear war. Geopolitics is shifting as I tweet. The abyss beckons.
Finally, mitigating & adapting to climate change is an essential part of the solution to the #SecondGFC. And the mainstream neoclassical solutions are mostly pseudoscientific nonsense. New economics should guide us, with new literature on feasible paths to 2050 for all to follow.
The #SecondGFC shows us where the #DiciplineoftheMarkets gets us. Firm rule of financial markets? Who are they kidding? The markets are more like angry beasts that need discipline, not our masters, to rule over us. Financial discipline is right wing tosh. #PostTruthEconomics
The ignorance of those who pontificate about free markets should go & live in them. Drug-addled neighborhoods, gangster-run ghettos, & mob-run shanty towns, are all free markets. Markets need good institutions & strong regulation for the public good. They bind society together.
What emerges from the present chaos, is a growing realization of the damage wrought by #Financialization following the UK Big Bang of the 1980s and the 1999 deregulation of the US banks. One financial crisis after another.
Real markets, which actually produce goods & services that people want, languish behind financial skulduggery, currency speculation, & private-equity short-term play. The balance is wrong, Financial markets should be the servants of the real markets, not their masters.
The banks that nearly went bankrupt in the #GFC should have done so, their directors investigated & sacked for misconduct. It’s not difficult. Scandinavian countries did it in the early 1990s. Iceland showed the way after the 2008-10 crisis, with some bankers going to jail.
Left unresolved, #Financialization will eventually lead to worse disasters, with the rich growing richer & the poor more numerous. Mother Earth will be trashed for the sake of more estates, mansions, yachts, & fancy private jets. Urgent reform needed supervised by @BIS_org
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