The View | The crisis in markets shows how our financial and political leaders have failed since 2008

Oil prices and equity markets continue their slide and investors are seeking an explanation for events that could be ushering in a recession. And analysts can only try to provide a strictly financial explanation to the confusing data. It’s more useful to see the market action unfolding as a parallel morality tale between two countries: America and China. It could come to symbolise the manifest failures and intractable corruption of both countries’ public policies and the private sector.

Structural, systemic corruption has reached an egregious height. Corruption in the US financial system is not in the form of individual fraud or crime, but is perpetuated by an entire bipartisan political class. Their failure to reform the banking industry has prolonged the recession and set up overpriced equity markets for the next crisis.

In China, the misunderstanding of regulation versus control along with widespread business corruption are proving perniciously difficult to balance and handle. It has lead to regulation by selective law enforcement and haphazard policymaking. Information from the Chinese market and economy remains opaque, making it inaccurate and unreliable at the worst possible time.

In the US, regulatory and market infrastructure reform by the entire political class was predicated that the economic crisis was entirely the result of private sector greed and misconduct. They failed to address the main causes of the 2008 economic crisis, which are returning along with an economically influential China.

What is amazing is not only did America barely survive a financial and monetary meltdown, but continued to fight and finance an expensive war on two fronts in Iraq and Afghanistan. Other historical superpowers would have collapsed or retreated, leaving themselves vulnerable to invasion.

Although America has diminished itself, it remains a military, economic and technological superpower. And the only reason the US monetary system hung together through the last eight years is that it is a reserve currency and the preferred currency for trading important commodities such as oil. That is what previous empires lacked- the ability to make other economies share the pain, thus rendering them into modern day, financial vassal states.

The current decline shows that the economic recovery since June 2009, channelled trillions of dollars that didn’t benefit the real economy. Instead, they inflated the prices of financial assets. Artificially supported stock and bond markets became the proof of a healthy economy.