The Crisis Next Time: Planning For Public Ownership As An Alternative To Corporate Bank Bailouts

The next financial crisis is all but inevitable. While its exact timing and severity cannot be predicted, both the accelerating frequency of crises in recent decades and the continued consolidation of the banking sector in an increasingly financialized economy suggest that we should be prepared for a crisis sooner rather than later. In the Great Financial Crisis of 2007-2008, the US federal government intervened at an unprecedented scale to bailout our largest commercial banks after they became entangled in the mess of risky financial products built on top of an unsustainable housing bubble. The effect of these massive bailouts was, in the end, to preserve the status quo: the modest attempts made to regulate the financial sector to protect consumers and avert further devastating financial crises have largely been rolled back, and the banks that were then “too big to fail” are today even bigger.
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