Play the ball and not the man

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The import of Ger­ard Hen­der­son­’s dia­tribe in today’s SMH is that the media has done a “soft” job on  my views, which have only gained noto­ri­ety because of the extreme pre­dic­tion I have made—about the forth­com­ing eco­nom­ic down­turn qual­i­fy­ing as not mere­ly a reces­sion, but a Depres­sion. It seems I’ve only got atten­tion because of my extreme views, while the media has let the side down by doing a “tabloid” job only and not sub­ject­ing my views to scruti­ny.

In fact, as many in the media know, I have gained atten­tion because of my Debt­watch Report, which will be two years old as of the next issue (No. 28, to be pub­lished in Novem­ber the day before the RBA meet­ing). The jour­nal­ists who have report­ed my views—including of course Ker­ry O’Brien, who gets spe­cial atten­tion from Ger­ard in his mockumentary—have read my analy­sis for two years now. I saw no sign of any atten­tion to the analy­sis behind my pre­dic­tions in Hen­der­son­’s piece—apart from pos­si­bly a “just in case” con­ces­sion towards the end where he not­ed that “His pre­dic­tions of a debt-induced decade-long depres­sion … may be cor­rect.”

In that case, the com­men­ta­tor who deserves the appro­bri­um for “tabloid” jour­nal­ism is Hen­der­son him­self, and not the ABC nor the Dai­ly Tele­graph, nor Six­ty Min­utes. They, after all, read my research, have quizzed me exten­sive­ly about it, and made the deci­sion based on inves­tiga­tive jour­nal­ism that my views deserved cov­er­age.

For this, I applaud them—for stand­ing up for the prin­ci­ples of the Fourth Estate. Stan­dard eco­nom­ic com­men­tary has been dom­i­nat­ed by the cheer­lead­ers for the poli­cies which have led to this cri­sis, while the author­i­ties them­selves and the aca­d­e­m­ic pro­fes­sion of eco­nom­ics itself have turned a blind eye to any argu­ments that ques­tioned the mantra in favour of dereg­u­lat­ed finance.

I know this from exten­sive expe­ri­ence. I have made five appli­ca­tions for ARC fund­ing to inves­ti­gate the dynam­ics of debt-defla­tions and Depres­sions in the last ten years; all have been unsuc­cess­ful (includ­ing one time when I topped UWS researchers on the ARC’s then pub­lished ref­er­ees’ point scores, after which sev­en UWS researchers received funding—but I was not one of them).

I made a sub­mis­sion to the Wal­lis Com­mit­tee in July 1996, in which I warned that secu­ri­ti­sa­tion of loans could lead to a cri­sis exact­ly like the Sub­prime cri­sis that has now unfolded—and of course my com­ments were ignored.

I wrote to the RBA in June 1998 offer­ing to hold a sem­i­nar on the “Finan­cial Insta­bil­i­ty Hypoth­e­sis”, which is the foun­da­tion of my argu­ment that we are like­ly to expe­ri­ence a Great Depres­sion. The offer was declined.

As has often been said, offi­cial chan­nels are often clogged to make sure infor­ma­tion and crit­i­cism does­n’t get lis­tened to. When I saw the debt that Aus­trali­a’s spec­u­la­tive bub­ble in real estate (and belat­ed­ly shares) had got us into, I decid­ed to turn to the jour­nal­is­tic pro­fes­sion to raise the alarm. To their cred­it, since I made a good case and the empir­i­cal evi­dence was com­pelling, jour­nal­ists lis­tened to me.

So Ger­ard, maybe you should do some inves­tiga­tive jour­nal­ism now too. Go to my blog www.debtdeflation.com/blogs, where you will find Debt­watch Reports going back to Novem­ber 2006, and aca­d­e­m­ic papers on debt defla­tion pub­lished as long ago as 1995 (maybe even read Debunk­ing Eco­nom­ics). And if you’d like to take a real risk and play the ball rather than the man, I’m more than will­ing to give a sem­i­nar on debt defla­tion at your Syd­ney Insti­tute.

Over to you.

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About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.