Financial crises: Cause and cure

The deregulated financial system was a neo-conservative accident
waiting to happen, a 21st century version of the South Sea Bubble. The
last 2 decades have been boom times, when banksters, (a neologism to
cover banks and other lending institutions) were making aggressive
loans to everyone, because loans meant interest meant profit. Drunk
with greed, they loaned without making sound judgments about the
ability of the debtor to pay, and without regard for the amounts of
capital their company actually held. Obscure high falutin financial
instruments were created, essentially bets on future prices. Little
criticism came from the media, mainly because nobody understood what
was happening, although Warren Buffet, who did, said "Derivatives are
financial weapons of mass destruction". Treasury Ministers should have
taken notice.

OK, it takes two to tango. People wanted fat cars and went asking for a loan. People wanted to buy a house (especially since they were going up in value so rapidly) so they took out a mortgage. But the banksters were undoubtedly aggressive in their offers of loans, because the profit in banking comes from making loans, not in accepting deposits. 

So we are now facing a financial implosion, a bursting of the easy
credit bubble. It is likely to be a mother, because of globalisation of
the financial markets, because of recent rises in oil and food prices,
because of climate change (the cost of hurricanes come back to the
insurance market, and UK plc is heavily into insurance) because of Peak
Oil, and because of Cilmate change.

So this is unlikely to be a little 2-year blip.

Luckily we have the Green New Deal to offer as a remedy for the desperate situation of unemployment, poverty and financial paralysis that is likely to ensue.

The Green Wage Subsidy should form a part of this Green Keynesianism.

Local groups can form Time Bank (LETS) groups.

So there is a way out of this mess. But it is going to take a revolution in our thinkingConfused? Things will get clearer as the recession gets worse.