Tomás Ó Flatharta

Looking at Things from the Left

Coronavirus is not responsible for the fall of stock prices – International Viewpoint – online socialist magazine

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When the air is replete with inflammable materials, any given spark can cause a financial explosion, at any time.

Éric Toussaint of CADTM examines a worldwide stock market collapse.

Eric Toussaint is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the international spokesperson of the CADTM (Committee for the Abolition of Illegitimate Debt) , and sits on the Scientific Council of ATTAC France. 
He is the author of Debt System (2019), Bankocracy (2015); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago; “Debt, the IMF, and the World Bank, Sixty Questions, Sixty Answers”, Monthly Review Press, New York, 2010. He has published extensively in this field. He is a member of the Fourth International leadership.

The mainstream media, in an oversimplification, claimed that this worldwide stock market collapse was caused by the coronavirus and this explanation is widely echoed on social networks. However, it is not the coronavirus and its expansion that is the cause of the crisis, the epidemic has only triggered it. All the ingredients for a new financial crisis have been present for several years, at least since 2017-2018 (see dating back to November 2017; dating from April 2018). When the air is replete with inflammable materials, any given spark can cause a financial explosion, at any time. It was hard to predict where the spark was going to come from. The spark sets the fire but it is not the root cause of the crisis. We are yet to know whether the sharp stock market crash of late February 2020 will “escalate” into a huge financial crisis but there is a real possibility. The fact that the stock market crash coincides with the effects of the coronavirus epidemic on the productive economy is no accident, but to say that the coronavirus is the cause of the crisis is untrue. It is important to see where the crisis really comes from and not be fooled by explanations that put up a smokescreen over the real causes.
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