The uncontrolled financial system

I found a brilliant quote from Thomas Jefferson, one of the founding fathers of the USA, in Ade Fauzan's facebook note today. Jefferson said:

"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered."

He said that in 1802 and we can't see better evidence than the financial crisis we are facing now.

But the question is: how?

If you let the "markets" become the only rule of the game in town that control the whole aspects of human lives, then crises obviously will follow. History shows that since the World War II until the 1980s, when markets were still 'embedded' (as Karl Polanyi said in his famous book 'The Great Transformation'), we only witnessed one significant economic crisis. That was when the US started to 'float' its currency and disbanded the Bretton Woods system resulted from huge budget deficit following the Vietnam war.

However, since the international financial institutions (IFIs), specifically the IMF, started their 'neoliberalisation' project, the world have witnessed dozens of economic or financial crises.

In my lifetime, which is 'merely' thirty years up to now, I have experienced two economic meltdowns. The first was the East Asia crisis in 1997-1998 and now the global financial crisis. The former has brought tremendous impacts that we all can still feel the effects, while the latter is still happening and no one can say when it's going to end.