Quotessence
Home / Books / The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy

The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy

Book by Yanis Varoufakis · 5 quotes · Cdo, Wall Street, 2008 Financial Crisis

Filter quotes by topic

AllCdoWall Street2008 Financial CrisisCapitalismCold WarFinancial CrisisManufacturing ConsentMccarthyismNeoclassical EconomicsPrivate MoneyRed ScareThird World Debt CrisisTruman DoctrineUs ImperialismVolcker Shock

The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy Quotes

“All dynamic societies founded their success on two production processes that unfolded in parallel: the manufacturing of a surplus and the manufacturing of consent (regarding its distribution). However, the feedback between the two processes grew to new heights in the Age of Capital. The rise of commodification, which also led to the flourishing of finance, coincided with a subtler, more powerful, form of consent. And here lies a delicious paradox: consent grew more powerful the more economic life was financialized. And as finance grew in importance, the more prone our societies became to economic crises. Hence the interesting observation that modern societies tend to produce both more consent and more violent crises.”

CapitalismFinancial CrisisManufacturing Consent
Book:The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy
Create image

“Not all of the New Dealers, it must be said, bought into the Truman Doctrine and the Marshall Plan. For instance, Henry Wallace, the former vice president and secretary of agriculture, who was fired by Truman for disagreeing with the Cold War’s imperatives, referred to the Marshall Plan as the ‘Martial Plan’. He warned against creating a rift with America’s wartime ally, the Soviet Union, and remarked that the conditions attached to the Soviet Union’s invitation to be part of the Marshall Plan were intentionally so designed that Stalin would be obliged to reject them (which, of course, he did). A number of academics of the New Deal generation, among them Paul Sweezy and John Kenneth Galbraith, also rejected Truman’s cold-warrior tactics. However, they were soon to be silenced by the witch-hunt orchestrated by Senator Joseph McCarthy and his House Committee on Un-American Activities.”

Cold WarMccarthyismRed ScareTruman Doctrine
Book:The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy
Create image

“The CDOs that sliced up and then spliced together disparate debts belonging to a heterogeneous multitude of families and businesses were put together on the basis of certain formulae, whose purpose was, supposedly, to calculate their value and their riskiness. These formulae were developed by financial engineers working for Wall Street (e.g. for J. P. Morgan, Bank of America, Goldman Sachs, etc.). To render the formulae solvable, certain assumptions had to be made. First and foremost was the assumption that the probability that one slice of debt within a CDO would go bad was largely unrelated to the probability of a similar default by the other slices in the same CDO. That is, it was assumed that what happened in 2007–08 was…impossible! That it was unnecessary to factor in the possibility of some crisis, during which Bob lost his house for reasons that increased the chances that Jane would lose her job and eventually also default on her mortgage.”

Wall StreetNeoclassical Economics2008 Financial CrisisCdo
Book:The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy
Create image

“Notice the irony: in a world ideologically dominated by monetary conservatism, and ringing with long sermons about the perils of printing money, the effective money supply had been turned over to privateers [private banks] bent on flooding the markets with money of their own making [ex. CDOs, which act as stores of value + means of exchange]. How did this differ, really, from handing the Fed’s printing presses over to the mafia? There is not much difference, is the honest answer.”

Wall StreetCdoPrivate Money
Book:The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy
Create image

“Indeed, a persuasive case can be made that [the Minotaur] played a major part in the defeat of America’s greatest foes – the Soviet Union and its satellites, as well as those non-aligned Third World regimes that had become too uppity in the 1960s. Key to this triumph was not so much the successful pursuit of the arms race, but rather the humble US interest rates – those very same rates whose phenomenal rise under Paul Volcker had assisted the Global Minotaur’s birth.”

Us ImperialismThird World Debt CrisisVolcker Shock
Book:The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy
Create image