First and foremost, the crisis has debunked the theory that deregulation of markets will bring greater prosperity. The ‘light touch’ approach is now universally recognized as one of the main causes of the current crisis. Yet the World Trade Organization (WTO) continues to push for the further deregulation of financial markets. It must be stopped. The same applies to even more extreme free trade agreements which the EU, US and others are seeking to negotiate with individual developing countries.
Second, we must point to the underlying imbalance in the global economy. Workers have been denied their fair share in the spoils of globalization. The credit bubble was necessary in order to make up for the shortfall in workers’ earnings. Part of the solution must be to rebalance the global economy by raising wages and removing the root cause of the debt pandemic.
