A modern money view of the global financial crisis

The paper argues that it is important to recognise the sub-prime crisis for what it is—an "epiphenomenon". The underlying drivers of the crisis have been twofold, with each factor a product of the neoliberal regimes implemented as a direct result of an unprecedented shift in power from labour to capital since the early 70s. On one hand we have witnessed real wage repression within the advanced industrial economies (despite notable productivity growth). On the other hand, national governments have embraced fiscal conservatism. The resulting policy of fiscal withdrawal has sucked real wealth out of national economies. This modern money view of the crisis is contrasted with the Braudelian analysis of Giovanni Arrighi.