City in danger of returning to pre-economic crisis
City in danger of returning to pre-economic crisis
Tuesday 15th September 2009
On the anniversary of the collapse of Lehman Brothers researchers have today warned of a "real danger" the economic crisis is failing to be addressed urgently enough.Think tank, the Institute for Public Policy and Research (ippr) has said policymakers have failed to address problems at the root of the recent economic crisis and unless urgent action is taken, it may not be the last crisis of its type.
The researchers have particularly pointed to the "rapid return to the City's bonus culture" as an indication lessons had not been learnt. Yesterday, Trade Union Congress (TUC) general secretary Brendan Barber also highlighted his concerns regarding bonuses, saying bankers were "back at the bonus trough".
The ippr warns in 'How to make capitalism better' policy-makers must seize the opportunity to create the "blueprint for tomorrow's capitalism".
Tony Dolphin, senior economist said: "Alarm bells should be ringing with the early signs of a 'back to business' attitude in the City (as illustrated by the return of big bonuses) and little evidence that policymakers are taking measures to ensure the next economic recovery is better balanced than the last one.
"Unless policymakers take action to create the blueprint for a more stable and sustainable model of capitalism, and one that delivers better outcomes for all not just a small elite, there is a real danger of another economic crisis in the future."
As such, the ippr has called for: greater international coordination of economic policies in the major economies, economic growth in the UK based more on exports and investment and less on debt-fuelled consumption, a financial system that operates for the benefit of the whole economy, recognition that there may be better measures of progress in an economy like the UK than the growth in national income, or GDP, and that reducing inequalities can make for a happier society.
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