What went wrong and where we should go are topical post-crisis discussions and many books have been dedicated to tackle this question.
Eric Janszen, U.S.-based economic analyst, is the latest in analysing the crisis and its aftermath. He thinks that the problems of the global economy are rooted in the flaws of the debt-driven FIRE Economy (Finance, Insurance and Real Estate) and the only way out of the crisis is to change the fundamental approach.
“The entire economic system has been glued together by one profound fantasy: Finance can substitute for production, and credit for savings. Private debt, of households and businesses, and public debt, of governments federal, state, and local, foreign and domestic, piled up like snow by a blizzard of lending through mortgages, bonds offerings, and securitizations over decades. It then avalanched upon us,” Janszen wrote in his new book.
In his view, reindustrialisation is the key and the absence of a fundamental change will sow seeds for future crises.
“If we continue on our current path, we will recreate a version of the economy that just failed, except it will be one with new potential for mayhem in the future, that of a government debt crisis instead of the private debt crisis we had in 2008 and 2009,” Janszen says.
