6 - Financialisation and Contemporary Economic Crisis Flashcards
What is financialisation?
The process by which financial markets, institutions, and elites gain more influence over the economy
What characterised the Great Moderation and the new economy that came with it?
Smoother business cycle(end of boom/bust - Gordon), low inlfation/interest rates, workers receiving smaller proportion of productivity increases(wage stagnation), workers using debt to fund increasing share of consumption
Explain the US housing crisis.
Subprime mortages were repackaged in a way to hide the maount of risk behind them, enabling damaging bubbles in the housing market as people were unable to pay them back - therefore, housing prices fell significantly(states like Nevada had the majority of homes having negative value) & the housing bubble collapsed - this affected the global markets as the crisis grew and affected many national banking system creating a general financial crisis
How was the labour market restructured after the Financial Crisis?
Low unemployment(3.8% Aug 2019), intensification of precarious jobs trend, falling real wages(majority of those in poverty are now also in work), longest decline in living standards for over a century, union membership slowly falling
How did the UK government react to the Financial Crisis?
Policymakers bailed out creditors and not debtors, deregulation of labour markets, Brexit
How was inequality affected by the Great Moderation and the Financial Crisis?
Great Moderation was indicative of wealth accumulation, not working conditions - policy response of austerity only further intensifies inequality - Piketty stated that ‘the return that we get for our labour is never the same as what we get for assets’, therefore wealth always has a greater return than income
What is Uber’s business model?
Platform technology(mobile technologies play significant role in delivery of services), self-employed contractors, no guaranteed income, no ownership of cars/drivers, no benefits
