We’re still living in the shadow of a crisis that was born in the heart of capitalism. On Sept. 15, 2008, Lehman Brothers went bankrupt. It was the beginning of a decade of austerity, inequality and impunity, but not of renewal or real changes. No one has taken responsibility. The architects of this whole pyramid scheme are still standing. The weight of a collapse with worldwide repercussions fell on the people, small shareholders and the public finance systems of governments that were forced to bail out the banks threatening the economy. Europe turned Greece into a martyr. Central banks tried to shirk their responsibilities. Greed was temporarily put on hold, out of fear, not shame. Nicolas Sarkozy, the French president who in 2008 promised a renewal of capitalism, is now a politician in the shadows, facing prosecution for the illegal financing of the electoral campaign that carried him to the presidency during the subprime mortgage crisis, the start to the housing bubble burst in the United States.
In spring 2009, President Barack Obama gathered the CEOs of the country’s main banks at the White House. “My administration is the only thing between you and the pitchforks,” he warned them. The Obama administration poured money into the banks, and Congress and the Justice Department made cosmetic changes, practically painless, to Wall Street. The great failure of the doctrine of market self-regulation resulted in minimal normative changes and pending “structural reforms” which are still waiting for a recovery of demand and productivity.
Ten years and many sacrifices later, the post-crisis world seems to have taken a step backward, not forward. The financial disaster has translated into global change, but not change in the direction of a new economy. Rather, it’s leading to a profound crisis in the system of political representation. The price of the bailout was economic impoverishment and mistrust in a system that had failed, that left us unprotected because we had believed that the money was for everyone. Millions lost their jobs, their homes and their social security. Uncertainty about the future took hold of many more.
The financial crisis demonstrated the limits of political power but also showed the regenerative ability of the big players in the banking system. And now, as some experts are warning of the risk of a new great recession, populism and authoritarianism are winning elections. The world continues to privatize benefits and mutualize risks, while the rhetoric against solidarity and in favor of a retreat from social policies has been gaining supporters.
“The biggest legacy of the financial crisis is the Trump presidency,” Joshua Green claims in a Bloomberg article. Obama was able to save bankers from the pitchforks, but he couldn’t stop the social outrage of those years from taking away his legacy and leaving it in the hands of Donald Trump, the real estate magnate, a representative of the 1 percent who accumulate global riches, a man addicted to financial risk and putting on a show. Now he’s the defender of economic populism. The billionaire who came to the White House denouncing “a global power structure” that was “rob[bing] our working class” is now quietly removing many of the restrictions imposed to limit risk-taking on Wall Street, and softening the stress tests on the banking system. There’s a straight line leading from Lehman Brothers to Trump. They’re both the children of deregulation and speculation. The economic and social wounds from the implosion of the former created the perfect conditions for the latter’s rise to power. The system can continue.