By. Carlos Márquez /
Within the framework of the great collapse of Neoliberalism that took place in 2007-2008, with the bankruptcy of the European nations and of this great country, the new world order that would replace the globalized and neoliberal society should have been orchestrated right there.
I say this because the bulk of the leaders of the core countries of humanity, the most important socio-political thinkers and economists agreed, from different spheres and organizations of the planet, on that urgent agreement, so that the deregulatory events that produced the economic hecatomb of that time would not be repeated.
As a result of that crisis, the Western world was flooded with thousands of protests and there were fears of a total breakdown of the great integration effort that had been underway since 2001 in the Eurozone via the common currency, the Euro.
Despite the great efforts of the neoliberal ideologists in their ideas that the markets would self-balance, the reality was that during the five years that followed the economic debacle referred to above, scenarios of stagnation, recession and slowdown of the economies were experienced.
Between 2008 and 2013, according to the current leader of the People’s Force, Dr. Leonel Fernandez, more than 8 trillion dollars were invested in the rescue of the economies and, in spite of this, the difficulties continued.
The rulers, headed at first by the Republican George W. Bush, during whose last administration the real estate hecatomb broke out, were forced to renege on the neoliberal principle of not intervening in the economy by injecting 700 billion dollars, only to rehabilitate the financial system, the insurance companies and the real estate companies.
Meanwhile, Barack Obama, who in the midst of the debacle had won the electoral process against the deceased John McCain, as soon as he was sworn in as Prime Minister, went to the rescue of the US airline and productive apparatus, which had been thrown away by the enormous crisis that had its fundamental essence in the deregulation of the market that drove the proliferation of the toxic shares of the so-called subprime mortgages, which in Europe alone reached a value of 500 billion Euros.
Regarding the aforementioned junk loans, Carlos Márquez, El gran derrumbe del Neoliberalismo refers that Navarro, Mark Zandi, Financial Shock, Financial Times Press, July 2008, page 121, estimates that in mid 2007 the outstanding value of MBS and CDOs, based on subprime loans, or junk loans, was about 1.4 trillion dollars, which approximately meant 10% of the GDP of the United States.
On the same subject, William Fleckenstein: Greenspan Bubbles, in the age of ignorance at the Federal Reserve, page 158, tells us that the total mortgage debt in the USA grew in only three years, from 2003-2005, by 3.7 trillion dollars, which was equivalent to the balance of the mortgage debt in force in 1990.
Hence, the experience drawn from the economic collapse – by the leaders of Europe, the United States, Japan and Latin America, together with the majority of sensible economists – was that the markets were not capable of regulating themselves and that they were self-destructing through their own voracity.
They were also able to understand the neoliberal hypocrisy that, in the face of crises like that one, profits were privatized, but losses were socialized and that, therefore, when losses were collectivized, those who had no say in the burial were charged with sacrifices that reduced their quality of life to repair the irresponsibilities, in this case of real estate, insurance, banking and stock exchanges, where there were executives who earned up to 18 thousand dollars per second, in contrast to the misery of ordinary citizens.
Because of the damage to the welfare of the majority caused by the excessive ambition of the executives of the financial segments, the Western world was moved by an immense row of protests.
This bitter reality provoked the search for compromise and solutions from the highest levels of government, intellectuals, socio-political thinkers, international financial organizations and business entities.
The wave of protests led Gordon Brown, then Prime Minister of the United Kingdom, to demand a new international order, while George Bush called for moderation and defended capitalism and competitiveness.
The group of the seven most developed countries, G7, was then convened. But the G7 leaders did not agree on anything and were forced to seek consensus by creating the G20, or group of twenty, which also failed to agree on anything.
Hence, they sought a way out at the Davos Forum, where the cream of capitalism debated the topic entitled: The reconstruction of the post-crisis world.
Differences in criteria prevented that in that transcendental event of 2008, as well as in the successive meetings of the members of this forum, it was not possible to agree on the new development model that should emerge in humanity after the great collapse of Neoliberalism.
Only amendments to that development scheme were agreed upon.
Years passed, Donald Trump entered the US political scene by being sworn in as president and his policies dealt blows and stabs to the body of the collapsed neoliberalism. Four years after his departure from power, he returned to promote from the White House the tariff policy that we know today and that represents the death of economic globalism and, therefore, of neoliberalism.
It is for these reasons that in this paper I argue that the new order promoted by Donald Trump should have emerged after the global economic crisis of 2007-2008.
Carlos Marquez
Es director de Teclalibre multimedios
Translated with DeepL.com (free version)
