The problems related to over-indebtedness and the high risk levels in Banking after the Glass-Steagal was overturned and which led to the 2008 Crash were never solved.
Instead what was done was the “hack” of lowering interest rates to levels far below the Historical Trend, supposedly temporarily, but in fact they never went back to trend (just like growth itself, fell well below that trend and never recovered back to it). The technique used reduced the costs of servicing the debt (if interest rates are lower, then the interest on that debt that needs to regularly be paid is less, which all things together means the Economy doesn’t need to create quite as much new wealth to service debt) whilst not actually solving the problems of overindebtness.
Further, Finance Industry regulations never went back to what they were under Glass-Steagal and similar - some things were tightened but at the same time the concept of Too Big To Fail banks rose, which means large banking institutions know they will always be saved by the State no matter what, hence take more risks.
Basically, the whole system has taken a turn towards the road to Stagnation under the hope that somehow a path back to growth would be found, and that hasn’t happened and instead what we have is all that cheap money feeding a string of speculative bubbles in things that don’t in any way add to our productive ability - or in other words: to our ability to create wealth - and just blow up after a while having done nothing else than move money around and misallocated resources which were thus wasted, thus pushing us deeper in the road to stagnation.
The problems related to over-indebtedness and the high risk levels in Banking after the Glass-Steagal was overturned and which led to the 2008 Crash were never solved.
Instead what was done was the “hack” of lowering interest rates to levels far below the Historical Trend, supposedly temporarily, but in fact they never went back to trend (just like growth itself, fell well below that trend and never recovered back to it). The technique used reduced the costs of servicing the debt (if interest rates are lower, then the interest on that debt that needs to regularly be paid is less, which all things together means the Economy doesn’t need to create quite as much new wealth to service debt) whilst not actually solving the problems of overindebtness.
Further, Finance Industry regulations never went back to what they were under Glass-Steagal and similar - some things were tightened but at the same time the concept of Too Big To Fail banks rose, which means large banking institutions know they will always be saved by the State no matter what, hence take more risks.
Basically, the whole system has taken a turn towards the road to Stagnation under the hope that somehow a path back to growth would be found, and that hasn’t happened and instead what we have is all that cheap money feeding a string of speculative bubbles in things that don’t in any way add to our productive ability - or in other words: to our ability to create wealth - and just blow up after a while having done nothing else than move money around and misallocated resources which were thus wasted, thus pushing us deeper in the road to stagnation.