Trillions have evaporated on the stock exchanges. Millions are out of work. The economy is in transition, but where is it going?  

EEB Policy Officer and author of ‘Frontlines. Stories of Global Environmental Justice’, Nick Meynen reflects on what (not) to do at this historic turning point. 

Crisis brings purpose, focus and urgency. Among other things, in my country, Belgium, this has helped politicians to avoid the embarrassment of breaking the world record ‘time needed to form a government’ for a second time.

The urgency to ‘save the economy’ raises the stakes. A risk is that badly-designed bailouts lock us into some very dark decades, yet some kind of intervention is essential to save lives and livelihoods. The amount of money needed to reset the economy is enormous, but the investment could transform the world forever. Whatever happens next, the state will have a huge role to play in the years to come.

Bad bailouts

After the 2008 crisis, most leaders reacted with The Shock Doctrine. Banks were bailed out and bankers had their bonuses back in no time. States gave quasi blank cheques to airlines, who then gave 96% of our money to their shareholders. All of this caused so much debt that states went broke, which was the trigger to cut back on health care, schools, public transport, pensions and everything of value for ordinary people. It’s called austerity, which increases inequality. Measures taken in response to a crisis should change the economy for the better. They should not waste public money and seek to return to Business As Usual, especially when Business As Usual is increasing environmental and social harm. We have choices. Iceland put some bankers in jail and chose to bail out households, with good results.

Read the full article here.