Business

Adam Tooze: The 2008 Global Crisis: Approaches To A Future History

The year 2008 will forever be associated with the collapse of Lehman Brothers, the subprime mortgage crisis, the Great Recession, and the election of Barack Obama. But taking an overly America-centric view of this time drastically reduces its global financial, economic, political, and geopolitical ramifications. While popular movies and books such as Inside Job, The Big Short, and Too Big To Fail have captured aspects of the drama of 2008, business historian Adam Tooze says it is not too early to write the broader history of a global crisis that many have identified as an epochal break in the post-Cold War era. In this lecture, Tooze sketches the outline of a future history.

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Adam Tooze
Image source: YouTube Video Screenshot

Adam Tooze is the author of The Wages of Destruction: The Making and Breaking of the Nazi Economy, The Deluge: The Great War, America and the Remaking of the Global Order, 1916-1931, Crashed: How a Decade of Financial Crises Changed the World and Statistics and the German State, 1900-1945: The Making of Modern Economic Knowledge (Cambridge Studies in Modern Economic History).

Adam Tooze: The 2008 Global Crisis: Approaches To A Future History

Transcript

Thank you so much for that kind introduction and thank you so much for your fabulous hospitality in this wonderful place and thank you to all of you for coming to to hear me this evening. It's a real pleasure to be back in Berlin and to be introducing this work that I've been thinking about for the last couple of years. Can everyone here at the back is the sound good. Good. So ten years ago what would become the global financial crisis had already had already begun. We were still some way from its peak which was the autumn of 2009 but the scale of the likely havoc by the spring was already manifest. I think this week the 14th 16th of March 2018 is the 10 year anniversary of the bailout of Bear Stearns the Scrapy investment bank which was the first Wall Street big name to go down. It was the week that Martin Wolf the esteemed economics commentator declared already in March 2000 tonight that the dream of the free market economy had died and far worse was obviously to come in the hard pressed American housing market. Prices turned down already in the summer of 2006 as Shiller's index suggests here this is the American house prices all the way back to the Civil War you can see the spike. You can see the break in Spain and Ireland and the U.K. the slump began over the summer of 2007 18 months later by the winter. Almost 800000 Americans were losing their jobs every single month. Eight hundred thousand people a month. It was bankers with cardboard boxes who hope the TV screens.

But it was the most vulnerable the were the worst hit amongst African-Americans unemployment rocketed to more than 16 percent amongst X Factor African-American men. The rate was over 20 percent amongst badly educated black teens in a city like New York. The unemployment rate hit 50 percent. By late 2009 10 in Europe and Asia it was those in export orientated industries that were hit first. In Mexico it was the Mecca Durras in the Gulf region the Asian migrant workers who keep the petro states going were airlifted home in the tens of thousands as the oil price collapsed in this astonishing graph here. The crisis was always political. It was the dominant topic of the 2008 election in the U.S. of which this is also the anniversary year. In fact Angela Merkel is the only incumbent to have survived the crisis Kohl of the Western political class. But it was also a subject of international politics Europeans pointed the finger at America and its fear of capitalism. To quote Robin Cook Germany's tough talking speedy Finance Minister Pierre Steinbrueck was particularly vociferous in this respect. The United States he said. And let me emphasize the United States is solely to be blamed for the financial crisis. They are the cause for the crisis and it is not Europe and it is not the Federal Republic of Germany. This isn't being impolite or undiplomatic he added. It's just the facts as a result of the crisis Steinberg went on. The United States will lose its status as the superpower the global financial system and many agreed the age of dollar dominance was coming to an end.

President Sarkozy chimed in not previously known for his anti-Americanism it previously understood. I think as an Atlanticist in French politics in the summer of 2009 there was deep anxiety that the financial crisis triggered by the collapse of securitized mortgages would spill over into a total crisis of American power. Would China sell off its trillions of dollars in assets leading to a general implosion. That didn't happen and why it didn't happen and why we were into expected I think is a great question for afterwards if I may plant a question. But by September 2008 the new fear was of something even worse. Which is a crisis that would take the entire world with it. Ben Bernanke who's not known for his overstatement has gone on record several times to say that he thinks that the crisis of September 2000 tonight was the worst in global history including the Great Depression and no one better placed to know than him. In September 2008 in that crucial meeting with Congress on the 18th of September these were his words kind of an astonishing phrase. If we don't do this we may not have an economy on Monday. In other words the chaos and the disintegration will be such that all cohesion will be lost. The effects however were deeply uneven. It could feel incredibly loud and incredibly close in the sense that Bernanke is expressing here in these days.

If you speak to any of the witnesses and survivors of the bailout in New York and Washington in this period it is like talking to people suffering from a traumatic experience but it could also sound like a distant echo and someone who noticed this was yoking Harlem so you can imagine my delight when I discovered this coincident he had happened to be at the Yale Law School that forgiving the course of lectures on religion and politics. His theme of time and on his return he was interviewed by Thomas asked Jolla of the site and as harbormaster reported his impressions everywhere he looked in America. There had been Hoppa esque melancholy flickering across TV screens on endless repeat abandoned.