Steve Keen's Debtwatch

What are your pre­con­cep­tions about the author of a book with the title The Next Eco­nomic Dis­as­ter: Why It’s Com­ing and How to Avoid It? Aca­d­e­mic? Left­ist? Anti-capitalist? Anti-banker certainly?

Pre­pare to drop them all, because the author is none of the above. Tak­ing the last first, the major­ity of his career has been in bank­ing — and as a founder and CEO.

Last week I made my first over­seas trip on which I ticked the box ‘Aus­tralian res­i­dent depart­ing per­ma­nently’. It’s given me cause to reflect on my career as an aca­d­e­mic econ­o­mist (and part-time jour­nal­ist) in Australia.

The Murray inquiry's observations on financial advice, household debt and super are commendable, but its boneheaded proposal for the government to underwrite RMBS is a concern.

A gov­ern­ment report is always a Parson’s Egg, and I’ll start with the parts of this one that were excel­lent. These were its wari­ness about and obser­va­tions on super­an­nu­a­tion, finan­cial advice and house­hold debt.

The Com­mon­wealth Bank’s response to the Sen­ate inves­ti­ga­tion of ASIC blames incom­pe­tence and indi­vid­u­als for the scan­dals at Com­mon­wealth Finan­cial Plan­ning Lim­ited. Chief exec­u­tive Ian Narev: “Poor advice pro­vided by some of our advis­ers between 2003 to 2012 caused finan­cial loss and dis­tress and I am truly sorry for that.”

The Abbott gov­ern­ment has reacted with pre­dictable dis­dain to attacks over its poli­cies on refugees, home­less, uni­ver­sity stu­dents, unem­ployed, and wel­fare recip­i­ents. And why shouldn’t it? These are com­plaints from peo­ple who nor­mally wouldn’t vote for them any­way, while the poli­cies them­selves appeal not only to “bolted on” Lib­eral vot­ers, but also to dis­af­fected Labor vot­ers. It’s good pol­i­tics, even if the bad press means a tem­po­rary hit in the opin­ion polls.

The Euro­pean Sta­bil­ity and Growth Pact is based on the prin­ci­ple that sta­bil­ity and growth are enhanced when gov­ern­ment deficits are either min­imised or elim­i­nated. I want you to dis­pas­sion­ately con­sider an argu­ment that reaches a dif­fer­ent con­clu­sion. It may sound like some­thing you have heard before from oth­ers and already dis­missed. But bear with me.

I’ve spent the past two weeks in Europe, with speak­ing engage­ments in Italy, Greece and Aus­tria. This was my first visit to Greece, and my first chance to get an admit­tedly super­fi­cial tourist’s view of what a coun­try with Great Depres­sion lev­els of unem­ploy­ment looks like.

This is the talk I gave on this topic in Vienna yes­ter­day. Once I have time, I’ll post the slides and the data.

This is the talk I gave at the Finance, Math­e­mat­ics and Phi­los­o­phy sem­i­nar orga­nized by the Depart­ment of Phi­los­o­phy and the Depart­ment of Physics at Sapienza Uni­ver­sita de Roma. It was an extremely good con­fer­ence, with the spe­cial bonus that I got to meet one of my heroes in non­lin­ear dynam­ics, Ping Chen.

Kingston Uni­ver­sity has adver­tised three fixed-term lec­turer posi­tions with a very tight dead­lline of June 22nd, with inter­views to be held on July 1st. Appli­ca­tions from econ­o­mists with a research area in het­ero­dox eco­nom­ics are welcome.

For queries please con­tact Julian Wells (J.Wells AT kingston.ac.uk), who is the Direc­tor of Studies.