The world wasn't facing a 'normal' business cycle recession in 2008 - we were experiencing a once-in-a-generation financial crisis that would have created misery akin to the Great Depression had central banks and governments not intervened. Anyone who thinks that would have been acceptable is crazy.
I agree that mistakes have been made, but in relation to central banks, if you think that cutting interest rates and launching QE was the wrong thing to do, then identify what the specific course of action should have been and back it up with research that says why. Everything I've read indicates the world avoided a catastrophe because of decisive action by central banks. If you can't present an evidence-based alternative, your argument is weak and meaningless.
The world has not avoided a catastrophe - merely pushed the date of it out and worsened the intensity of the endpoint. Perhaps an extended depression will be the outcome as the list of OECD members that have passed the point of no return (no ability to ever repay their debt) is now over 5 with the US soon to cross that threshold. A company that keeps getting extended credit by its banks but does not restructure will eventually go bankrupt - only it becomes a much larger bankruptcy.
Example: US health system/Obamacare - it is illegal in the US for a hospital to talk with other hospitals about what they pay the Pharma and Prosthetics companies for their supplies. It is legal for the Pharma and Prosthetic companies to discuss what they charge.
One CFO who left a large hospital (more than 1,000 hips/shoulder replacements a year) joined a brokerage house as a researcher (salary multiplied 5x) and produced an expose of this. Result - rules/non-disclosure documents changed to create personal liability for hospital staff if they EVER disclose the costs despite leaving hospital employment.
One example he produced (and verified independently by firm's legal team) was of the other competing major transplant/replacement hospital in that same major US city - price they paid for roughly same volume of prosthesis purchases was many times that of his hospital.
Pretty much every Pharma and Prosthetic's company both employs lobbyists in every OECD country and from some digging I did in early 2000s - makes political donations to all major political parties.
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Govt debt levels have increased several fold across the OECD with the money printing and subsequent purchasing of the same Govt's debt issues has not achieved growing real GDP increases in fact the real GDP (on a developed economy basis) has never been weaker.
Deficit spending continues unabated and in Australia's case what should have been a mild recession with a healthy weeding out of poor businesses would have been offset by the China-supply boom.
Instead, Australia is on one of the worst trajectories for Govt debt build-up and continues to have expanding problems. Did you know that the bulk of BER spending occurred not in 2007 or 2008 but later? That the cost for the school halls (a NSW blackout hall designed for High Schools only) went up 40% the day after the BER was announced? An investigative reporter put in an FOI request for the last half dozen or so signed before the BER was announced. Did a like-for-like comparison of site specific costs etc.
I even received a fax (by error) meant for one of the chief contractors from a 'consultant' after a meeting held at our local Primary school with myself and two other reps that raised serious 'probity' issues. Attempted follow-ups with local Fed Member, Fed Education Minister (JG) and State Education Minister - were never returned strangely enough. Then the asbestos contamination and exposure of the school community for 6 weeks was uncovered (literally) by myself - only Workcover intervened finally. Media reports got the school name wrong (how unusual for EVERY outlet to get it wrong). Corrections published the following week. Did I mention that many of the firms involved in the BER were substantial donors to all major parties...
For example looking at Myth vs Reality - the claimed spending to achieve the "Gonski education" outcomes is NOT what the Gonski report actually mentioned. In fact the figures so often tossed around were what Julia Gillard's team arrived at. Gonski himself has decried the plan that was espoused.
Govt policy is too often beholden to the 'donors' - both legal and illegal, named and un-named.
Example:
- Why has the NSW Liberal Party continued to REFUSE to name the illegal donors that put under $1m into the ACT based 'money washing' fund as alleged by the NSW Electoral Commission?
- Why has the State Attorney General not commenced legal proceedings as required under the Act? (Yes I suspect I know why as it is his own party but the question SHOULD have been asked yet neither the media nor other political parties have asked it, curious during the Fed Election is it not?
- With negative campaigning in the last 4 weeks by the ALP why was this alleged 'illegal' funding not raised? <Well again I know, but question needs to be asked - previous digging into their respective donation histories showed approx 5 of 10 biggest donors were the same to both sides year in and year out - curiously enough all 5 are now made illegal to donate to both parties>
Most people understand the simple financial theory on 'spend less than you earn'.
Spending 'other peoples' money' which can coincidentally lead to highly paid roles/directorships on shelf companies etc once out of politics or out of the bureaucracy - seems to lead to bad outcomes for the community quite often but VERY large fees for the arrangers.
Example: The NSW Govt is using a discount rate of just under 10% for present valuing the State Govt liabilities (cash flows) on the West Connex project over a 30 year time frame yet for the same time frame is using just over a 3% discount rate for the unfunded superannuation liabilities.
Both liabilities appear in the same section of the NSW State Govt Balance Sheet and have exactly the same accounting definitions and standards for calculation - yet one is roughly 3 times the size of the other. One effectively massively understates the cost of West Connex and the other perhaps slightly overstates the unpaid Super liability.
Both should use the same rate.
One has generated tens of millions in 'fees' for the arrangers (same old crew) and the other (by using a significantly lower rate) has increased the privatisation value of all the related super businesses (and of course the related fees..)
