The Endless Crisis was written by John Bellamy Foster, the editor of Monthly Review and professor of sociology at the University of Oregon collaborating with Robert W. McChesney. The article came originally from the introduction of the book called The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the United States to China.
The Great Financial Crisis and the Great Recession began in the United States in 2007 and quickly spread across the globe, which appear to be the turning point of the world history. The recovery plan was set to two year, however the world economy five years after crisis is still in the sluggishness. The Traid – United States, Europe, and Japan remain caught in a slow growth condition, financial instability, and high unemployment rate. As a consequence, the effects spread globally. Despite the slowdown of the global economy, China is the only country found out to be a bright spot as its economy is still expanding.
Different views on the Stagnation
In the United States, the focus of financial crisis shifted to the idea of economic stagnation. The idea of stagnation was introduced by authorities and published books as follow. Firstly, Ben Bernanke, chairman of Federal Reserve Board said on his speech in 2011 that the stagnation was not affects only the United States, but the global economy as a whole. He moreover stressed that he do not expect the long-run potential growth of the U.S. to be affected by the recession and crisis if the U.S. takes necessary steps to secure the outcome. Nonetheless his thought might sound useful, yet the necessary steps he mention left the public in doubt with no explanation.
Secondly, the president of the America Economic Association, Robert E. Hall provided the speech on “The Long Slump” in the same year. Hall defined a “Slump” as the period where unemployment rate is above-normal together with a sharp contraction which lasts until normal employment has been restore. Hall also stated that “The Great Depression” was the worst slump in the history of the United States because since the Great Depression started to contract the economy since 1929 to 1933, the period after crisis was still in dull and prolonged. As a result, he concluded that U.S. economy is now trapped as The Great Slump, where the government and authority cannot provide the needed stimulus to the economy. He ended his speech as the slump in the U.S. may last many years.
Moreover, Paul Krugman stated that the advanced economies were currently caught in the “Third Depression”. He clarified that the depression was not meant to be a negative economic growth throughout the business cycle but rather protracted slow growth once economic recovery had commenced. He also stated that the damage of the slump is not able to fully recover as the before-crisis-period.
Furthermore, despite the thoughts and speeches given from authorities and economists, stagnation theme can also be found in certain published books. “The Great Stagnation” written by Tyler Cowen published in 2011, the best seller, characterized the economy as a multi-decade stagnation as there was no new net job creation worldwide since the last decade. Another book by Thomas Palley, “From Financial Crisis to Stagnation”, define the situation of stagnation itself as a prolonged effect from Great Financial Crisis and the failure of neoliberal economic policy dealing with the crisis.
United States however not the only country that was effected by the crisis. Christine Lagarde, the managing director of the IMF, gave her speech in Washington on September 2011 that the world economy is entering another dangerous new crisis – not only the U.S. economy, but also the global growth as a whole that is slowing down. She stressed as “dangerous new crisis” because it is the weakness of the Traid – North America, Europe, and Japan, which can commonly known as the core...