1. Lost in the GFCWhy Mainstream EconomicsCannot Get Out of the Bind

2. Mainstream EconomicsNeoclassical Economics: OptimizationMonetarist Economics: Currency & InflationKeynesian Economics: Regulatory RoleNeoliberalism: the Synthesis 3. How Have Each Defined theCrisis?Competitive Shifts > UnemploymentIndebtedness > Capital ShortageUnsustainable Deficits > AusterityRegulatory Failure > Market Failure 4. Contrarian EconomiesAustralia & Canada: Dodged the BulletBrazil, Russia, India, China: Second WorldAsian Dragons: Inspired by Dr. Sun Yat SenBotswana: Defying the Commodity CurseMondragon, Spain: Cooperative Experiment 5. Anatomy of the USSPM CrisisGovernment Spurred Market for Low IncomeEarning First Home OwnersFinancial Markets Lobbied & GotGovernment Guarantee IncentivesRating Agencies Relaxed StandardsUtilized the Secondary Market to Sell Loans forCash & Pass the Risks of Default of HighGrade PaperLent to NINJAs (no income, no job, no assets) 6. Anatomy of the USSPM CrisisGovernment Spurred Market for Low IncomeEarning First Home OwnersFinancial Markets Lobbied & GotGovernment Guarantee IncentivesRating Agencies Relaxed StandardsUtilized the Secondary Market to Sell Loans forCash & Pass the Risks of Default of HighGrade PaperLent to NINJAs (no income, no job, no assets) 7. USSPM Breaks from RealityWhen you lend in cash, you must be repaid incash, not the promise of higher asset values.Real estate prices rose because of thegreater availability of credit, not highereconomic valuesCommissions, not value for the customer, arewhat drive sales.Government is the lender of last resort &magically becomes everyones problem. 8. EU CrisesSpeculative driven real estate industry bailedout by the government & therefore ataxpayers burdenForeclosing: a double edged sword ofdeteriorating assets & displaced homedwellersGreece: Failed privatization where liabilities &obligations remained the governments duty &responsibilityCyprus: Killing the goose that laid the goldeneggs by taxing deposits. 9. AustraliaMore Taxes But Higher DeficitsJob Losses Due to DecreasingCompetitivenessRising Cost of Home Affordability/Australias Version of a Financial HavenParochialist Xenophobia 10. Under the IcebergDerivativesFuturesSwapsOptionsHybridsGlobal:US: Figures below are from 2Q 2008Total derivatives: $182.2 TInterest rate contracts: $145.0 T (80%)Currency contracts: $18.2 T (10%)According toBank for International Settlements"$516 trillion at the end of June 2007"Not to mention, margin trading. 11. First StepsUSSPM/Real Estate BustsLend to the borrower, not to the bankCompel the bank to sell or lease the toxicassets to those who need them, marked tomarketFailed PrivatizationCo-oprivatize/Mutualize 12. First Steps: AustraliaEnable Worker Takeovers of UncompetitiveIndustriesCut on number of taxes & start collecting oneconomic & site rent sans loopholesCase for the KimberleysOpen immigration for mega projectsQLD-NSW WaterwayHigh Speed Railway 13. UnfortunatelyThe system works more on vestedinterests & feeding visceral fears inorder to obtain political support Hence, the likely scenarioLong drawn out economic doldrumsMore regional conflictsBetter showbiz to help people forget 14. However ...The Best Way to Predict Your Future Isto Create It. ~ Abraham Lincoln