According to a widespread view, the financial crisis of 2008 was not solved but made permanent.

The central banks slipped into the role of political fire extinguishers and ensured that the global economy did not fall apart with loose monetary policy.

The mixture of extremely low interest rates and trillion-dollar securities purchases ensured that states and banks remained liquid and stimulated the economy.

Thomas Thiel

Editor in the Feuilleton.

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The central banks have grown into a new political role that endangers their independence and threatens to overwhelm them.

Because what was intended as a short-term crisis response measure continued for years.

That was fine with politicians, because they could borrow cheaply and the short-term monetary policy crisis interventions spared them unpopular measures.

Indebted states were artificially ventilated via the central bank and political upheavals were prevented.

The Corona crisis caused the need for money to skyrocket again.

In this way, time was bought and a political solution avoided.

All this went well as long as there was no inflation.

Now that it is rising and an energy crisis is added to the provisionally capped crises, politics seems to be facing disclosure.

The economy can no longer be stimulated by low interest rates and highly indebted countries can no longer be supported by buying bonds.

The euro crisis is threatening to repeat itself, and a dispute has flared up again over the ECB's new crisis instrument.

The problem with the political expansion course of the central banks was that this avoided a consolidation of the financial market.

The central bank grew into the role of the ultimate guarantor of market liquidity and even into the shadow banking sector.

Securities of dubious character that previously would have been left alone were bought up, and assets that actually had no real equivalent value were stabilized.

Some see this as a victory for the financial lobby: assets rose again in the period that followed.

However, the central banks acted out of necessity to prevent at least a partial collapse of the financial system and the resulting social upheaval.

Suspended market economy

In terms of justice theory, that was a problem.

Banks and states were able to keep their bad securities and the associated property claims in the market.

This benefited financial market players, share and real estate owners and, in the eurozone, heavily indebted countries disproportionately.

It is difficult to measure to what extent others indirectly benefited from this.

The research on the distributional consequences is quite manageable.

The benefits for property and stock owners now seem to be reversing as interest rates rise.

In an article in the social science journal "Leviathan" (2022/Issue 2), the economic sociologist Christoph Deutschmann adds another point: the money creation by the central banks means that the market fails as an indicator of scarcities and unsustainable property claims.

The market economy is more or less suspended, and economic imbalances that used to be corrected by crises are now kept alive artificially with "political money".

This means that the market-economy regulation for the balance between the financial sector and the real economy is lost.

Politicians constantly have to strike a balance without having a reliable indicator, and central banks are still growing into a political role they shouldn't have.

According to Deutschmann, market equilibrium has long since been lost.

One sees it in the fact that the supply of capital created by the banks is not matched by a corresponding demand.

The inflation of the financial sector compared to the real economy, which has already led to the financial crisis, is continuing and leading to further bubble formation.

The political production of money does not change this, because a considerable part of the fresh money circulates in the financial sector without any equivalent value in the real economy, where it contributes to further questionable wealth accumulation.

Without the political subsidy, many of these property claims would have become obsolete.

This sham economy is now apparently going under the wheels.

Will politicians soon have to decide on those painful reforms that have so far been avoided?