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Paved with good intentions: Misdirected idealism in the lead-up to 2008’s GFC

Published online by Cambridge University Press:  01 January 2023

Anthony M Gould  and
Milène R Lokrou
Milène R Lokrou
Affiliation:
Laval University, Canada
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Abstract

Irresponsible lending practices on the part of financial institutions and proliferation of tradable derivatives were key causal agents of the 2008 financial crisis. However, it is less clear why, historically, loose credit arrangements were so widespread. Somewhat misleadingly, much conjecture has laid blame at the feet of financial institutions themselves. While it is true that duplicitous and even corrupt lending practices were consequential antecedents of the crisis, a legacy commitment to certain – laudable – elements of New-Dealism created context for these elements to become established. To understand really what went wrong, it is necessary to look back before the 2000s and appreciate the interaction that was occurring between a long-term policy commitment to neoliberalism and piecemeal/fragmented application of approaches that aimed to assist financially disadvantaged people. Using the analogy of heart-attack pathology to guide some of its analysis, this essay argues for better policy-integration.

Keywords

G01G2F66H12J52Business cyclecollective bargainingeconomic stimulusemployment conditionsglobal financial crisisglobalisationindustrial relationsKeynesian economics/theorylabour markets
Type
Symposium: The Global Financial Crisis Ten Years On
Information
The Economic and Labour Relations Review , Volume 29 , Issue 4: Symposia: Global Financial Crisis 10 Years On; Full Employment White Paper , December 2018 , pp. 394 - 409
Copyright
© The Author(s) 2018

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