In the Year of Our World Cup 2014, the ongoing global financial crisis seems to have receded significantly from the forefront of public consciousness. The United Kingdom has officially emerged from the longest economic slump in a century; the United States' economy grew 4% in the second quarter of this year; and even the comatose Japanese economy is reckoned by some to be 'out of the death spiral'. A summer of truly sensational football, in combination with the compelling (if sobering) events in the Middle East, have combined with this promising economic outlook to push any thoughts of fiscal meltdown onto the back burner.
But an excellent and provocative article from a recent edition of the International New York Times merely underscores just how fragile the global recovery might be. Gretchen Morgenson's outstanding A failed effort to gauge big banks' edge (4th August 2014) reported on a new study authored by the Government Accountability Office ('GAO') in Washington D.C. This study – which was commissioned by two senators, one Democrat (Sherrod Brown, Ohio) and one Republican (David Vitter, Louisiana) – and its associated hearing on 31st July 2014 reached some deeply troubling conclusions:
Six years after the obvious inception of the financial crisis, some institutions remain 'too big to fail', and too 'complex' and 'unwieldy' to be unwound in the event of a fresh round of problems.
Being 'too big to fail' is actually an advantage for these institutions: as Morgenson succinctly expresses, 'Stated simply, there is an enormous value in a bank's ability to tap the taxpayer for a bailout rather than being forced to go through bankruptcy.'
According to Professor Anat R. Admati of Stanford University – who testified at the study's hearing – 'perverse' subsidies remain a systemic feature, engendering 'a conflict of interest between the banks and the rest of society'.
Why this matters to students who are looking to enter or perhaps already active in today's jobs market should already be clear from recent experiences: if a new crisis rears its ugly head, several major financial institutions are likely to require the fiscal equivalent of emergency surgery. Billions of dollars – perhaps much, much more – will be siphoned off into the rescue effort. The interconnected of global markets means that many if not all countries will be affected – including states whose populaces are already reeling from the best part of a decade of selective austerity, quantitative easing and cost-push inflation.
As the data continues to show, getting a good, well-compensated job commensurate with one's skills is already hard in a world of food banks, zero-hour contracts and industrial-scale layoffs. In order to stand a chance of thriving in an environment of genuine scarcity, students need to equip themselves with additional materials and skills that will make them stand out from the crowd – and if necessary, enable them to forge their own futures with minimal assistance from anyone else.