[Steve_American]

Everyone here needs to grok this incredibly informative talk about the GFC/2008.
Not my usual MMT stuff, anyone can accept this I think.
It is about 54 min. long followed by another 35 min. Q&A period.
Maybe it is just me but I find it useful to run it at 3/4 speed with the subtitles on.
There is a transcript button you can access, but it is auto generated and so very often gets the words wrong.

What I learned was --- the crash would have bankrupted the major European banks but the US Fed. Res. took the illegal and extremely generous step of providing (not free, but almost) those banks and the the ECB and other national banks [Bank of England, etc] with literally many trillions of dollars.
. . . The lesson of the Great Depression was that deflation is much worse than inflation even hyperinflation. For example, Hitler won the election & gained power during the deflation of the Depression but he failed and went to prison when he tried during the hyperinflation period 10 years earlier. The EU is led by Germany and Germans are far more worried by inflation than depression and deflation that their austerity has imposed on some Europeans. The Yellow Vests are the result of this wrongheaded German attitude. Etc. Etc.
You all need to invest your time in this video. I can't say this strongly enough.

This is a production by the National History Center in cooperation with the Woodrow Wilson Center’s History and Public Policy Program in Washington DC

In September 2008 the Great Financial Crisis, triggered by the collapse of Lehman brothers, shook the world. A decade later its spectre still haunts us. As the appalling scope and scale of the crash was revealed, the financial institutions that had symbolized the West’s triumph since the end of the Cold War, seemed – through greed, malice and incompetence – to be about to bring the entire system to its knees.

Crashed is an original analysis of what happened and how we were rescued from something even worse – but at a price which continues to undermine democracy across Europe and the United States. Gnawing away at our institutions are the many billions of dollars which were conjured up to prevent complete collapse. Over and over again, the end of the crisis has been announced, but it continues to hound us – whether in Greece or Ukraine, whether through Brexit or Trump.

Adam Tooze is the author of Wages of Destruction, winner of the Wolfson and Longman History Today Prize. He is the Kathryn and Shelby Cullom Davis Professor of History at Columbia University. He formerly taught at Yale University, where he was Director of International Security Studies, and at the University of Cambridge. He has worked in executive development with several major corporations and contributed to the National Intelligence Council. He has written and reviewed for Foreign Affairs, the Financial Times, The Guardian, the Sunday Telegraph, The Wall Street Journal, Die Zeit, Sueddeutsche Zeitung, Tageszeitung and Spiegel Magazine, New Left Review, and the London Review of Books.

The Washington History Seminar is co-chaired by Eric Arnesen (George Washington University) and Christian Ostermann (Woodrow Wilson Center) and is sponsored jointly by the National History Center of the American Historical Association and the Wilson Center’s History and Public Policy Program. It meets weekly during the academic year. The seminar thanks the Society for Historians of American Foreign Relations and the George Washington University History Department for their support.

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[Steve_American]

Why is this info so important?

Well, one way is because the Germans learned the wrong lesson from the inter war years [1919 to 1939].
They learned to fear hyperinflation, but the real lesson is to fear deflation.
I assume that in every nation at all times the number of people with an income usually from working is greater than the number of unemployed.
In hyperinflation the workers have an income and they have clout to get wage increases so they can survive. They are not helpless.
However, in deflation many workers lose their jobs and so they have no income and there are no jobs to get. They are helpless.
When helpless people are concentrated in cities, history shows, they riot to get food to eat. This is more destructive than the effects of hyperinflation.

When the EU was formed the Germans made sure that their fears were the ones that were locked into the rules. [Here the rules seem to be like the US constitution.] It helped them that this was after the inflation of the 70s and so economists were changing over to neo-liberalism or supply-side economics. The mistake was to freeze this economic theory into the rules before it had been properly tested by reality.
. . . Now it is 28 years and 2 or 3 recessions later. Now, we can see the the promised trickle-down has never happened. Now, we have seen that private debt can explode in the face of the lenders and this can crash the whole economy. Now, we can see that not every nation can export more than it imports at the same time, by definition. [And also, this is not just because some are living about their means. Their nation is poor.] And also, the stupid lender is just as or more at fault as the desperate borrower. Now, we can see that every sovereign nation must have a way to keep its money inside the nation and not let it all leak out in some way, i.e. by a trade deficit or profits being taken out by foreigners.
. . . The EU must be reformed to remove the Neo-liberal rules from its constitution". Because it requires that the leaders of every member nation must all agree at the same time on the change it seems likely that the best or only way to reform the EU is to break it up and start over. I don't like this result but it may be the only way forward.

Another way is ---
Now, we can see that the IMF and World Bank rules are evil. They make stupid loans to desperate nations and then impose austerity on the nation's people that don't help the situation and just make it worse. That is, the nation can't get enough money form its people to pay back the loans. The people don't have that much money to start with. So, if there are not more exports than imports then the nation can't earn the money to make the payments. But, the rich nations have no intention to import more than they export, not ever. [Except the US, but that is a different story.] So, how can the poor nation export more to pay off the loan?
. . . Economists just ignore these questions because the answers don't help their patrons, i.e, the world's rich people and rich nations. Not even MMTers will discuss this. I have tried to get replies and I get no reply or gibberish.
. . . OTOH, there are a very few economists who are calling for a lot more debt forgiveness. They can it "debt jubilee". I think they are basing this on the reality that most money is fiat now so forgiving debts in a fiat currency doesn't necessarily mean the lender loses his ass. Sort of a QE program for paper/assets held for loans to poor nations or people in poor nations that can't ever be paid off. I think, maybe.