Leading Australian academic Scott Burchill offers thoughts on the current financial crisis:
It is amazing that S&P and Moody’s are still in business after their contribution to the GFC, let alone able to trigger GFC2 by downgrading the US’s credit rating.Ha-Joon Chang is absolutely right about the desperate need for structural reform in the financial sector. There was a window of opportunity to do something about re-regulation at the depths of the GFC, as I argued in The Age two years ago. So what happened?The financial sector (which paid most of Obama’s campaign bills) fought a determined and very successful campaign (more accurately a “class war”) to ensure there would be no meaningful reform of any kind. They soon got their bonuses back and nothing was done, despite the fact that they drove the world to the economic precipice. Consequently, a new crisis is upon us before the old one was even over (at least for Australia – for Europe the GFC never went away). The problem for the elite, as Noam Chomsky has just written, is that the people (“extremists”) the financial sector put in Congress to protect their interests have gone off reservation and could bring the whole system down.What a disaster!