Recession depression

Dr. Eric Helleiner lectured at STU last Tuesday. (Shane Magee/AQ)

Dr. Eric Helleiner went to the first G20 summit in 2008 not as a protester, but as an eager spectator, genuinely curious to see what would happen.

Three years later, his face lights up with excitement as he tells the story of his experience at what many people believe to have been one of the pivotal moments in the global debt crisis.

Helleiner, who teaches political science at the University of Waterloo, has reason to believe that the crisis is going to get worse, which was what he talked about during the annual political science lecture at St. Thomas University last Tuesday.

While talking in the Edmund Casey Hall theatre, the London School of Economics alumnus said the lessons learned so far from the debt crisis are incorrect.

The first lesson is for scholars with the belief that no one saw it coming, and the system needs to be overhauled.

“There were a number of economists who predicted the crisis. They did a pretty decent job of it,” he said.

The second lesson is for the policy makers and the public, who believe that the G20 was a big part of why the recession did not become another Great Depression.

“I find it frustrating, because it’s a little too self-congratulatory. The reasons why it was not a Great Depression had very little to do with the G20,” he said.

“It was the result of intelligence and action.”

Helleiner believes the reasons the recession did not become a Great Depression was that the U.S. dollar did not collapse at the height of the crisis.

A critical moment was in July and August of 2008 when China considered pulling its money out of the U.S. This situation was so risky that the U.S. treasury secretary was sent to the Olympics in Beijing to meet with Chinese officials.

“In the 1930s, a lot of people didn’t live in a monetary society. That’s not true today,” he said.

His concern is mainly for people living in cities. Very few people grow their own food, make their own clothes, or supply their own heat today.

All of these products are things exchanged for money, which people have less and less of as the cost of items rises.

The reason Helleiner is concerned we will go into a bigger recession and depression is because the politics around the globe are much less stable than they were three years ago.

Shaun Narine, acting chair for the political science department, said the lecture was both timely and relevant.

“The fact is, this is something that has an enormous impact on all of us. It’s good to know why it’s happening.”

Narine has been trying to arrange for Helleiner to speak for several years now, but his schedule had not worked well with STU’s until now.

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