Financial Implosion and Stagnation

Financial Implosion and Stagnation; Back to the Real Economy“, (coauthored with Fred Magdoff, Foster listed first), Monthly Review vol. 60, no. 7 (December 2008), pp. 1-29. DOI: 10.14452/MR-060-07-2008-11_1

“The first rule of central banking,” economist James K. Galbraith wrote recently, is that “when the ship starts to sink, central bankers must bail like hell.” In response to a financial crisis of a magnitude not seen since the Great Depression, the Federal Reserve and other central banks, backed by their treasury departments, have been “bailing like hell” for more than a year. Beginning in July 2007 when the collapse of two Bear Stearns hedge funds that had speculated heavily in mortgage-backed securities signaled the onset of a major credit crunch, the Federal Reserve Board and the U.S. Treasury Department have pulled out all the stops as finance has imploded. They have flooded the financial sector with hundreds of billions of dollars and have promised to pour in trillions more if necessary—operating on a scale and with an array of tools that is unprecedented.

  • Reprinted in Michael Chossudovsky and Andrew Gavin Marshall, ed., The Global Economic Crisis: The Great Depression of the XXI Century (Montreal: Global Research, 2010), pp. 72-101.
  • German translation published as a Supplement der Zeitschrift Sozialismus, no. 2, 2009 (separate pamphlet).
  • Spanish translation in Monthly Review, Selecciones en Castellano, no. 10 (2009), 37-70.
  • Italian translation by Elisabett Horvat, in Quale Stato (Anthologia Della Crisi Globale)no. 1-2 (January-June 2009),
  • Portuguese translation in Monthly ReviewPortuguese-Language Edition, no. 8, 2008.
  • Turkish translation appears in Kapitalizmin Finansal Krizi, edited by Prof. Dr. Abdullah Ersoy (Ankara, Turkey: Imaj Publishing, 2011), 330 pp.


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