ABC Sydney´s "The Business Programme" asked Ann Pettifor for an interview on the current situation in international finance.
Ann made a strong case that nothing is being done to fix the structural imbalances in the global financial system, in particular the high debts that have accrued in advanced economies across all sectors – government, business and households.
Pettifor argues that governments should create the economic activity that is now lacking, including via infrastructure projects. "We need monetary and fiscal policy to work together, rather than monetary policy working alone", she says. Central banks were delinquent in their risk management duties leading-up to the financial crisis, and have essentially escaped accountability in its aftermath. As such, they are repeating past mistakes. And while central banks can continue to pump liquidity into the financial sector via their quantitative easing programmes, there are not enough people in the real economy looking to borrow and invest, which means the extra liquidity is flowing straight into asset values, causing dangerous bubbles.
Click here to watch the full interview. Your comments are welcome.