A Tale of Two Cities: Financial Meltdown and the Atlantic Divide

Abstract

The 2008 financial meltdown was a genuinely global affair. By the time it was over, the global banking system had lost up to $4.1 trillion of its value, the world fiscal deficit had risen from 2 percent to over 10 percent, and economies worldwide had seen a spike in unemployment that totaled at least 50 million (Skidelsky, 2009, pp. 13–16). These enormous numbers stand comparison to those generated by the depression of the 1930s, and like that depression, the one which began in 2008 threw a long global shadow. But the shadow was not the same everywhere. It was deepest where the crisis originated and the meltdown first occurred – in the United States and the United Kingdom. And even where it was deepest, there we can still see significant variations of gray. The purpose of this chapter is to chart and explain both the shadow and the variation.

Actually three cities — Washington and New York, and London. London is the site of both governmental power and City institutions. In the US, the centers of government and finance are geographically separate, hence the importance of the ‘Washington-New York nexus’. The title is Dickens’ fault. A fuller version, with chronological appendix, is at http://www.davidcoates.net/ publications/non-fiction/american-politics-and-society/.