2008 All Over Again
Financial markets in the United States and worldwide face uncertainty and potential crisis after Britain voted to leave the European Union. (Sparkx 11)
Great Britain’s decision to leave the European Union has wiped out many bankers and global speculators. They will turn, as they did in 2008, to governments to rescue them from default. Most governments, including ours, will probably comply.
Will the American public passively permit another massive bailout of the banks? Will it accept more punishing programs of austerity to pay for this bailout? Will a viable socialism rise out of the economic chaos to halt further looting of the U.S. Treasury and the continued reconfiguration of the economy into neofeudalism? Or will a right-wing populism, with heavy undertones of fascism, ascend to power because of a failure on the part of the left to defend a population once again betrayed?
Whatever happens next will be chaotic. Global financial markets, which lost heavily on derivatives, are already in free fall. The value of the British pound has dropped by over 9 percent and British bank stock prices by over 25 percent. This decline has wiped out the net worth of many Wall Street brokerage houses and banks, leaving them with negative equity. The Brexit vote severely cripples and perhaps kills the eurozone and, happily, stymies trade agreements such as the Trans-Pacific Partnership. It throws the viability of NATO and American imperial designs in Eastern Europe and the Middle East into question. The British public’s repudiation of neoliberal economics also has the potential to upend the presidential elections. The Democratic Party will orchestrate a rescue of Wall Street if there is a call for a bailout. Donald Trump and the Republicans, by opposing a bailout, can ride popular revulsion to power.
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