The upside of the GFC

The GFC will long be remembered as a calamity. Is there any upside that can be salvaged from the crisis?

For many, the collapse in global asset prices, freezing of credit markets and the fear that characterised the 2007/08 economic crisis – since given the unoriginal moniker of The GFC – was a cataclysmic event. We shouldn't underestimate the impact the GFC has had on millions who have lost jobs, homes and livelihoods.

But it is probably now time to ask; was there an upside? Are there any good things to come from the calamity?

In American and the UK, where the brunt of the pain was borne, there has arguably been a change in the collective psyche. Conspicuous consumption hasn't gone away in either country, but it is now frowned upon in both.  After decades of relentless expansion, salaries at the very top are now subsiding and risk aversion is again rife.

Plenty has been written about those profound changes, less has been said about changes of a more frivolous sort.

Crises are a boon for film makers and the GFC is no different. Wonderful films have been made in the post-GFC world. The final Batman movie, for example, is an epic comment on the grim new reality. Films such as Arbitrage, Killing Them Softly, Too Big to Fail, Company Men and Margin Call are all fine efforts to understand the crisis.

The mess in the rest of the world also highlights the novelty of economic life in Australia. It’s been more than 20 years since the last recession and the lessons being learnt by the rest of the world aren't necessarily being learnt here. As Charlie Munger is fond of saying, it’s better to learn from the mistakes of others rather than from your own.

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