Sixteen years is not a round anniversary, but it is a sweet age, at least in the United States. On this day in 2008, the investment giant Lehman Brothers fell, an entity crammed with unpayable credit that was allowed to fail. Then came austerity and the resulting suffering, and after the pandemic, a sweeter response.
However, the effects of that earthquake are still being felt. It took Spain 63 quarters to digest the situation in terms of employmentBefore the investment bank’s collapse, the unemployment rate was 11.23% of the working population and in the second quarter of 2024 it was 11.27%. In between is the record: 26.94% in 2013, according to the INE. The GDP was also delayed because the country was not able to reach the pre-crisis level until 2017.
The treatment of subsequent crises has been different, as acknowledged by the doctor in Digital Economy from King’s College London, Roy William Cobby, in the special End of the Month program on Radio 5 that was broadcast last Friday on the differences between the recessions from 2008 onwards and the Covid crisis. Cobby says that now there is a different role for the public and the State, “with different responses, but with a general trunk that is sometimes opposite to the previous crisis”.
Professor of Applied Economics at the Complutense University of Madrid, Mario del Rosalwarns that many promises have not been kept. For example, the regulation of large financial institutions, which was “very lukewarm”, therefore, “the danger of something happening again, not exactly the same, but with financial exuberance, as the classics would say, is still there”.
Paradigm shift?
The question is whether minds have changed. Where there were cuts, Now there is more expansionismbut why?
Roy William Cobby says that on some occasions the government has been more papist than the Pope. He does so by commenting on the example of the United Kingdom’s tax authority, an institution that usually calls for austerity, but which in one of its latest reports has even “begged” for more investment.
“If we take into account that in the advanced economy, some of the most important factors are, for example, human capital, then We must invest in education“Cobby notes.
“In the United Kingdom There are schools that are literally falling apart and all this tells us that if there is no investment in infrastructure, that is, if there is no symbiosis between the capacity for entrepreneurship and the contribution of the State, the link is broken,” and that ultimately causes “damage to the very foundation of growth,” explains the expert.
Mario del Rosal does not believe that there is a change in the economic paradigm “because the foundation remains capitalist”, but “in terms of the forms it takes, it has clearly changed”. Another thing is whether that is enough, for example, to achieve the desired European reindustrialisation.
For that to happen, “something would be needed that does not exist,” says the professor from Complutense University. Furthermore, “the European Union rejects it outright: the possibility of States participating in a much broader way, not only in investment needs, but in the planning of industrial policy itself, which is conspicuous by its absence.”
For del Rosal, the Draghi report, released this week and calling for an additional investment of 800 billion euros per year, would therefore fall short.
Roy William Cobby does value the gesture “even from an orthodox point of view”. And he states, “Europe is precisely the continent where this exhaustion of the pre-crisis growth model is most evident”. In the old continent we find a sector that was “thriving” but that finds “strong competition in China”while in other “leading sectors” such as digital platforms, “we also do not have the leadership that the United States has.”
These are some of the ideas that were heard at the end of the month and that can be found in podcast format on Rtve.es and the “RNE Audio” app.
