"The filing for bankruptcy of investment bank Lehman Brothers on 15 September 2008 triggered, as we now know, the great financial crisis, the worst economic downturn in the US and other advanced and emerging economies since the Great Depression of the 1930s. There are many contours to the fallout of the Lehman collapse, but one which was perhaps not well anticipated was the rise in populism that we are currently witnessing as a principal political fall-out.
It was entirely to be expected that the collapse of Lehman, and the associated meltdown of the US subprime mortgage housing market, would shake faith in the global financial system, and the insouciant assumption made by the world’s central bankers and leading macro-economists before the crisis that financial markets largely functioned well and could be expected to sort out any crises on their own, without the heavy hand of government intervention and heavy regulation.
What was perhaps less obvious was that with the global financial crisis, would follow eventually, a backlash against the global trade regime, and the globalisation project, tout court. It is perfectly logically consistent, and consistent with conventional economics, to support free trade and yet be opposed to unrestricted capital flows, due to the inherent and excessive volatility they create: indeed, economists as otherwise contrary as Jagdish Bhagwati and Joseph Stiglitz agree on this latter point."
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