Debunking Economics eBook available

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Debunk­ing Eco­nom­ics was first pub­lished in 2001 by Pluto Press (Aus­tralia) and Zed Books (UK). There has been renewed inter­est in it since I began warn­ing of the impend­ing finan­cial cri­sis, and I decided to release the book in elec­tronic for­mat to make it more acces­si­ble (the hard copy can still be pur­chased, if your book­shop will order it, from Zed Books UK, or online from Ama­zon).

I have gone with the (free) Mobipocket Reader format–which runs on PCs and PDAs as well as eBook Read­ers like Amazon’s Kin­dle. The eBook priced at US$10 (about a third of Amazon’s paper­back price).

If you’d like to pur­chase a copy, click here to access the Mobipocket store. For those of you who haven’t yet vis­ited it, I have a web­site ded­i­cated to the book that pro­vides addi­tional detail on some parts of the book, my lec­tures for free down­load, and much else.

About Steve Keen

I am a professional economist 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 debts accumulated in Australia, and our very low rate of inflation.
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94 Responses to Debunking Economics eBook available

  1. carbonsink says:

    Accord­ing to Craig James we will be in the midst of a housing-led recov­ery by the 2009. How is this pos­si­ble with Japan in deep reces­sion, China expe­ri­enc­ing a rapid slow­down, the U.S. a bas­ket­case, and Europe not much better?

    Is it really pos­si­ble for Aus­tralia to grow its econ­omy by build­ing houses for each other while the rest of the world is in deep reces­sion? It seems highly implau­si­ble to me, so why do the likes of Craig James make such ridicu­lous forecasts?

    Comm­Sec econ­o­mist Craig James said the econ­omy would emerge from the global slow­down in the mid­dle of next year, dri­ven by higher con­struc­tion. He said interest-rate cuts and first-home buyer grants would cause house prices to rise 5 per cent, and the Fed­eral Government’s infra­struc­ture pro­gram and grants to coun­cils would drive work on roads, rail­ways, hos­pi­tals and schools.

    Mr James esti­mated the cash rate would fall from 4.25 per cent to 3.25 per cent by June, bring­ing more good news to home own­ers whose loans had vari­able inter­est rates. But he said if the econ­omy per­formed well, inter­est rates might rise again.

    The Reserve Bank will start mak­ing noises mid-year about lift­ing inter­est rates, given the strength in our domes­tic econ­omy and improve­ments in economies over­seas,” he said.

  2. Steve Keen says:

    Dear Car­bon­sink,

    What an incred­i­ble “pre­dic­tion” by James! I’ve whacked a link to it in my “Brick­bats” page. I hope I get a chance half way through next year to quiz him on that call and its (expected) lack of con­nec­tion with reality.

    plp15, I believe I have the begin­nings of such a theory–which I am now toy­ing with call­ing “New Mon­e­tarism” as a delib­er­ate dig at neo­clas­si­cals who blithely chris­ten their waf­fle “New Key­ne­sian­ism” (unlike most of them, who have read lit­tle or no Keynes, I’ve read a lot of Mil­ton Fried­man [and far more of Keynes], and I would take great plea­sure in tak­ing over that term from his abuse of it). You’ll see some of that in the Feb­ru­ary Post, and it’s scat­tered through the papers on the The­ory page here.

    But there is a long way to go!

  3. clive says:

    Accord­ing to Sat­ur­day 28 Dec Finan­cial Review. Page 31 ‘Finan­cial Cri­sis Quiz’ The ques­tion is:
    ’The cur­rent slow­down has been com­pared with the Great Depres­sion. How much did the US econ­omy con­tract then from peak to trough?
    The answer is 27 per­cent, with a note say­ing ‘The worst scep­tics are pre­dict­ing the cur­rent down­turn will cause a con­trac­tion in the US of about 5 per­cent so the com­par­i­son is a big stretch’.
    I’m no econ­o­mist but the speed at which good debt has become bad debt, the range of finan­cial instru­ments that prob­a­bly hadn’t been dreamed of in 1929, and the addi­tion of Japan, China and India that prob­a­bly weren’t even part of the equa­tion then, makes me think this may have a chance of being even worse. Add to that the level of debt being dou­ble what it was then. The cur­rent health of the US econ­omy as com­pared to then and things tend to look bleak. My view is that many have said ear­lier on that China will help to bail us out, I’m now think­ing that this is just going to make it an even big­ger bang. So far many of the experts seemed to not see the inter­con­nect­ed­ness of every­thing or they just see it as a pos­i­tive rather than more fuel to the fire. I also feel that some younger peo­ple fail to see that many of the west­ern economies really have been just con­sum­ing crap for the last 40 years and China and India have been pro­duc­ing a lot of it. Much of our retail sec­tor has been based on that and the shock there will be mas­sive.
    Steve what’s your views on the peak to trough of the US and the truly global nature of this reces­sion (China India).…am I right that they played only a small role in the 29 crash.

  4. dojufitz says:

    I had an argu­ment at work with a mort­gage slave over home prices in Melb.
    I said they were unaffordable…he reck­oned they always dou­ble every 7 years.…

    I said yes in dol­lar terms but what about when priced in gold?

    So i googled the info -

    These are aver­age home prices in Mel­bourne -
    2005 — $352000 cost in Gold at that time — 698oz
    2008 — $425000 cost in Gold at this time — 340oz
    So Houses have gone up in price but half the amount of Gold buys you the same house.…that is value vs price.….

    Will 2009 be 181oz of Gold?
    2010 — 90oz of Gold?
    2011 — 45oz?

    Who knows?

    But i would rather have gold and sil­ver right now than huge debt on a mortgage.

    Please Dr Keen if you have the data show house prices ver­sus gold.…it would be interesting.

  5. prudentsaver says:

    I think the US house­builder stocks, have bot­tomed out. Reit stocks, looks like they are bot­tom­ing out. It’s not based on fun­da­men­tals or any­thing, it’s just how it looks, house­builder stocks now, as like nas­daq stocks in 2003.

    As I have said before, Steve, I think your CPI adjusted dow jones charts, is wrong, this is how I think the cor­rect pic­ture is shown, through Q fac­tor or replace­ment value of the com­pa­nies, from bill gross’s arti­cle. He thinks the dow can go to 4500, bring­ing it like the 1932 level, I think it will rather hap­pen through infla­tion, with the same q ratio, but a higher dow.
    http://www.pimco.com/NR/rdonlyres/0384C0F7-6909-400D-9F1E-34BD574F01A6/6714/Chart1IO2.jpg

    It also cor­rospond to the dow / gold ratio. it’s this effect that deflate the stocks through infla­tion, more than your charts give credit to, through the last years, that also means house prices are not that high, CPI infla­tion, espe­cially food just needs to catch up.

    gold stocks, and gold are in a bub­ble, the same with agri­cul­ture. and alter­na­tive energy. oil have cor­rected. The way I see it the US trea­sury bond mar­ket have been in a bub­ble since Japan started sup­port­ing the US in the early nineties, but it accel­er­ated since 1995, giv­ing boost to ser­ial bub­bles is the us econ­omy caused by the low inter­est rates, nas­daq, hous­ing, chi­nese stocks, fer­til­izer stocks, and lastly trea­suries itself, the bub­bles have been shorter and shorter in dura­tion. The stan­dard for­mula is that when some­thing dou­bles in 6 months it’s near the burst­ing phase, that’s what’s hap­pened with trea­suries now. japan have and later china, have in real­ity used parts of europe, aus­tralia, uk, US, as a sur­ro­gate mother to grow their export economies. print­ing money to keep our inter­est rates low. when that stops, japan have stopped, but I think china will to, it’s like the sand will crum­ble, and inter­est rates, will want to rise to a level like in the mid sev­en­ties. Coun­tries like thai­land have not been used the same way. I think China can really shift a lot of their atten­tion towards other asian economies. Like Peter Schiff write in his book, the US had a great econ­omy dur­ing WW2, but peo­ple really could not spend that much, with price and wage con­trols but they had jobs..etc, sim­i­lar to china now..and there was think­ing in the US that end­ing the war was bad for their econ­omy, sim­i­lar to how china feels to end­ing sup­port­ing the us, and sub­si­diz­ing the US at a cost to their own cit­i­zens. Of course it’s wrong, and they will ben­e­fit, but I think that is how they feel. Back to the gold bub­ble, I think gold now, are in rela­tion to what nas­daq was in late 1998, a sell off in trea­suries, that I see hap­pen­ing early next year, will flow into gold, and “mostly every­thing”, espe­cially infla­tion hedges. The US in my opin­ion have almost noth­ing in com­mon with japan. A trend that is inter­est­ing is that when the trea­sury bub­ble began in 1995, sil­ver started to weaken, thai­land and other asian coun­tries started to weaken in their stock mar­kets, paper assets, mostly the US, uk, aus­tralian, stock mar­ket, hous­ing mar­kets, etc started to strenghten, china started to strenghten. I think the log­i­cal con­nec­tion to this bub­ble is that the US, europe, aus­tralia, have sucked up the sav­ings of
    asia, and hav­ing went more into hous­ing, and paper assets more than real stuff, that the asians could have bought, it have mod­er­ated infla­tion, when the trea­sury bond bub­ble burst, I think that trend will reverse. since sil­ver, and the thai stock mar­ket is priced in dol­lars, those mar­kets will increase,together with our infla­tion because of the crum­bling debt mar­kets, paired with spi­ral­ing inter­est rates upwards.

    here the chart to back these the­o­ries up.

    http://finance.yahoo.com/echarts?s=HL#chart6:symbol=hl;range=my;compare=ttf+^ftse;indicator=volume;charttype=line;crosshair=cross;ohlcvalues=0;logscale=on;source=undefined

  6. tommyt says:

    Hello steve, I have read­ing with graet inter­est the many ideas posted here and am delighted to finally under­stand what I did not under­stand i.e. the expan­sion of the Aus­tralian econ­omy and what I sus­pected (from liv­ing on this earth for a while)would be the ‘train wreck’ about to hit (I could smell it!!mainly because of the great debt fig­ures pub­lished every­where (if you were looking).I have been more inter­ested (not hav­ing an eco­nomic or math­e­mat­i­cal understanding)in the psy­chol­ogy and polit­i­cal response and overt arro­gance of the ‘polit­i­cal class’(not to men­tion the ‘Can­berra Ora­cle’ the ‘Gov’!). Today that most con­ser­v­a­tive of newspapers,The ‘SMH’, in it’s EDITORIAL NO LESS,QUOTED:”…during a 17 year boom,now about to end,when AUSTRALIANS ACCUMULATED AN UNPRECEDENTED AMOUNT OF.….BUT ALSO AN UNHEALTHY AMOUNT OF PERSONAL DEBT.…“This might be the “I told you so state­ment from this news­pa­per which will ‘hit us’ next year I sus­pect! As far as psy­chol­ogy goes it is ever so subtle.Me sus­pects they are finally get­ting the message,Steve!

  7. Steve Keen says:

    Hi Clive,

    I’m pre­dict­ing a damn sight more than a 5% fall in the USA–and already fore­cast­ers (a highly reli­able group of course!) are pre­dict­ing a decline at a 6% annu­alised rate for the cur­rent quarter.

    In terms of a peak to trough change in real USA GDP, that I think will eas­ily exceed 10%. Whether it will be of the order of the 27% fall in the 1930s… Well I wouldn’t say fore sure. but I wouldn’t rule it out either–since we’re start­ing with at least twice as much debt (com­pared to GDP) as back then.

    China played an insignif­i­cant role back in the ‘30s, but Ger­many played an alto­gether dif­fer­ent one. Let’s hope the downturn’s impact on China doesn’t rival what hap­pened in Ger­many in the 1930s.

  8. clive says:

    Thanks Steve. Looks like another case of opti­mism get­ting in the way of the fun­da­men­tals.
    On a lighter side had a Ger­man friend of mine who left there before the war and was old enough to remem­ber the depres­sion. What I remem­ber him say­ing was that almost overnight their was a swing from defla­tion to hyper­in­fla­tion. His story goes.…(Whether this is myth or not I’m don’t know), he tells how when he was paid he took his money home in a wheel bar­row, on the way home he stopped to pur­chase some milk. He picked up arm fulls of notes to buy the milk and entered the shop. When he came out of the shop some­one had stolen the wheel bar­row and left the pile of notes strewn all over the foot path.…this accel­er­ated his move to AUS

  9. carbonsink says:

    Steve,

    Con­tin­u­ing the “don’t worry, be happy theme”, today we have Christo­pher Joye in Busi­ness Spec­ta­tor with The great house price myth

    He makes the rea­son­able point that house price falls have so far been restricted to the $1M+ mar­ket which doesn’t affect 95% of Aus­tralians, but he com­pletely under­plays the effect that ris­ing unem­ploy­ment will have in com­ing months/years.

    He also blames the media for “poor report­ing” and sen­sa­tion­al­ism, which I assume means, not report­ing that every­thing is fine.

    Again, I strug­gle to under­stand how Aus­tralia will escape a thump­ing global reces­sion sim­ply by cut­ting rates and hand­ing out a thou­sand bucks per kid.

    We seem to be expe­ri­enc­ing a highly delu­sional period in Aus­tralia where busi­nesses (par­tic­u­larly trade-exposed busi­nesses) are already feel­ing the pinch, but haven’t yet cut staff. Employ­ees know their employ­ers are strug­gling, they know they are car­ry­ing unsus­tain­able debts, but the RBA and Kev have put so much cash in their pock­ets, the urge to splurge has proven irresistible.

  10. David Short says:

    Hi all

    I am a retired physi­cist, inter­ested in eco­nom­ics, as well as too many other things.

    In the two weeks since Steve Keen’s post, I think about three of the 80-odd respon­dents wel­comed the elec­tronic repub­li­ca­tion of the book, and one of these, Gor­don, indi­cated his inten­tion to do the hard work of read­ing it. But there seems to have been no dis­cus­sion of the book’s content.

    When Mar­garet Throsby inter­viewed Steve recently on ABC Clas­sic FM, I wanted the book ASAP. Finally a sec­ond­hand book­seller gave me a paper­back copy for $60, when his embar­rass­ment about the cost to him led to seek only a $5 mar­gin. Per­haps Mar­garet drove up the market!

    While wait­ing for the book, I read Steve’s papers on endoge­nous cre­ation of money. These papers writ­ten for aca­d­e­mic audi­ences were remark­ably read­able to some­one out­side of the field. This was due to such civilised fea­tures as explain­ing terms clearly and min­imis­ing spe­cial­ist jargon.

    Then on read­ing Steve’s paper on the non-conservation of money [see the papers in the The­ory part of this blog], the light dawned. Good dou­ble entry book­keep­ing to account for trans­ac­tions of firm, worker and banker, includ­ing the money-creating fiat of the lat­ter, yielded a model anal­o­gous to two mod­els I had stud­ied as a physi­cist. Money in each account was anal­o­gous:
    (a) In the first model, a micro-scale case, to a store of elec­trons or holes in the crys­tal struc­ture of a min­eral, and
    (b) In the sec­ond model, a macro-scale case, to a store of water or other mate­r­ial in the landscape.

    In case “a” the devel­op­ers used the same numer­i­cal tech­nique [generic ODE solver] as Steve appears to use to solve the anal­o­gous equa­tions in eco­nom­ics. Even more inter­est­ingly, in case “b” the devel­oper shared Steve’s inten­tion to use macro-scale data, rather than much up-front ide­ol­ogy, in devel­op­ing a dynamic model of a com­plex sys­tem that was oth­er­wise rather intractable.

    At a later date, I would like to ask Steve ques­tions about details of numer­i­cal tech­nique, per­haps in another forum.

    Return­ing to the book, the mind that wrote the sur­pris­ingly read­able aca­d­e­mic papers also wrote the book. For now, I shall com­ment on Chap­ter 1. This out­lines the con­tent of the book, which com­prises both a detailed expo­si­tion of main­stream (neo­clas­si­cal) eco­nom­ics, and a detailed debunk­ing of the same. The pur­pose is to spare the reader the task of find­ing and read­ing “dozens of books and hun­dreds of jour­nal arti­cles”. Antic­i­pated read­ers include eco­nom­ics stu­dents, pro­fes­sional econ­o­mists (includ­ing the main­stream vari­ety, to give them a good sum­mary of what they are up against) , and “the intel­li­gent lay reader”.

    Despite acknowl­edg­ing the dif­fi­culty of the reader’s task, the author has a vision of of the lay reader mas­ter­ing the sub­ject. We don’t have to find and inter­pret the myr­iad of books and papers. And there is help­ful advice to treat the book as a ref­er­ence work, and thus start with parts that are rel­a­tively easy or of par­tic­u­lar inter­est to the indi­vid­ual reader.

    My related sug­ges­tion is to under­take the “sig­nif­i­cant intel­lec­tual exer­tion” with relaxed per­se­ver­ance, read­ing or pon­der­ing a lit­tle and often, rather than with anx­ious strug­gle. Dur­ing this exer­tion our spir­its can be refreshed, by Steve’s vision for what lay read­ers can achieve, and by his “guar­an­tee that main­stream econ­o­mists will hate the irrev­er­ent tone of this book”.

    Please get on with the read­ing, folks, and come back with ques­tions and com­ments about the book.

  11. iconoclast says:

    car­bon­sink,

    back in late Novem­ber, when Chris Joye was ped­dling his views on another blog site, I wrote a rebut­tal to his views. The link to it is here http://economics.com.au/?p=1891#comment-133644

    I never got a response to my view on why his analy­sis was miss­ing the point.

  12. OldSkeptic says:

    The prob­a­bil­ity of Aus­tralia escap­ing this is zero. At least a reces­sion com­pa­ra­ble to 91–93 is def­i­nite, worse … highly probable.

    How bad will depend on (1) Luck (2) Govt, espe­cially Fed­eral Govt, inter­ven­tion .. but it has to be smart intervention.

    Luck we can do noth­ing about, but sadly the Fed­eral Govt is in ga-ga land. Not only do they not have a plan C, I doubt they have even talked about a Plan A (what will they do about all the pri­vately owned infra­struc­ture if the hold­ers go under?).

    Unfor­tu­nately, for those who hoped oth­er­wise, this is a dyed in the wool neo-liberal Govt, and as such sees every­thing through that very dis­torted prism. Bit of a nip and tuck here, say the right things and every­thing will go back to BAU. House prices will rise again, debt will increase, but under the neo-liberal model pri­vate debt has no mean­ing. Only pub­lic debt is a no-no.

    They will go into deficit, but will try to ‘bal­ance the books’, by some nasty cuts in areas they think will have lit­tle polit­i­cal impact. The usual can­di­dates will be rounded up, sci­ence and research, ABC, ‘hid­den’ infra­struc­ture, rail, Abo­rig­i­nal spend­ing, etc.

    How they have dealt with car­bon trad­ing and Fed­eral edu­ca­tion spend­ing, CSIRO, CDEP, etc, sums them pretty much up.

    So its going to be a rocky road ahead for all of us … well unless you are a big pol­luter of course.

  13. al49er says:

    This is a repeat as I acci­den­tally posted it in an ‘old section’

    To ‘GSM’ re your post of Dec 22nd.

    Thank you very much for your link to the “Global Europe Antic­i­pa­tion Bul­letin”.
    – have a look people.

    As I men­tioned before hav­ing believed for a long time, from the ’soci­o­log­i­cal’ per­spec­tive, that things had to go ‘ass up’, and then to find the likes of our home grown Steve Keen, the US’s Peter Schiff (and others)put all the flesh and detailed expla­na­tion in fore­casts dat­ing back a num­ber of years, has been a fan­tas­tic revelation.

    This site for which ‘GSM’ pro­vided the link is yet another fan­tas­tic resource with a great deal of detail and appar­ently very accu­rate run­ning fore­casts back to 2006 and earlier.

    I do not have a spare €200’s for a sub­scrip­tion and am more than happy with Steve’s very excel­lent post­ings, fore­cast­ing and pro­posed papers on the cor­rect struc­ture for future sys­tems, along with some very infor­ma­tive post­ings by fel­lows to this site.

    I remain stunned notwith­stand­ing the very few
    ‘com­ing outs’ among jour­nal­ists — and for the life of me I can­not under­stand, how ‘the peo­ple in power’, gov­ern­ments, busi­ness, reg­u­lar­tory bod­ies etc — some­one, any­one, even the mid­dle level office boy — hasn’t twigged and began work to shine a light in the dark ivory towers.

    On the oth­er­hand it is not quite so sur­pris­ing to me to see the the gen­eral pop­u­lace ‘remain obliv­i­ous’, given that I have always sub­scribed to the belief that at least 85% of the pop­u­la­tion are polit­i­cally igno­rant and bereft of any inter­est to read, research and learn the truth, not only of what is going on in the world around them, but how it is being pow­ered and manipulated.

    So we have Kevin and Wayne et al, feed­ing out just the sort of rem­edy the plebs are look­ing for : — “here go and spend some money”
    whilst no doubt behind-the-scenes, say­ing to one another in the Ivory Cas­tle,
    “yes this is def­i­nitely the way to go, we do not want to spook the peas­ants with the truth (about which we don’t have much flamin idea in any event) and because Aus­tralia is ’spe­cial’ we will be some­what pro­tected from all of this ‘pass­ing nas­ti­ness’ and have a ’soft landing’”

    It is all sim­ply so incred­i­ble — it is almost sur­real.
    2009 will cer­tainly prove
    “we live in inter­est­ing times”

  14. tommyt says:

    Thanks AL 49er for your post!! yes very ineter­st­ing times! what will our chil­dren have to say? our grankids, when they are in a state of ‘siege’ from other ‘think­ing economies on our doorstep? Me thinks the tourism indus­try will be huge and we will all be ‘turn­ing bed sheets’!As you rightly said, most cit­i­zens don’t give a you know what! BUT don’t for­get the media, as the organ of com­mu­ni­ca­tion is no where to be seen!!EXCEPT for com­mu­ni­ca­tors like steve!Thanks

  15. Effit says:

    Per­haps another eco­nomic jour­nal­ist besides Ross Git­tins is chang­ing his thinking?

    http://petermartin.blogspot.com/2008/12/ive-been-wrong.html

    Thanks to you all for your blogs. My knowl­edge is grow­ing all the time!

  16. GSM says:

    Some­thing com­ing through from many MSM com­men­taters these days is the “Hoocoodan­ode” meme. Why didn’t econ­o­mists and major invest­ment houses see this GFC com­ing? Peter Martin’s blog men­tioned above reeks of it.

    This of couse is arse cov­er­ing in the extreme– as I’m cer­tain ALL these well known com­menters bought the spiel hook line and sinker — choos­ing to ignore the great sca­mathon they knew was being per­pe­trated by these snake oil salese­men and feed­ing large at the cor­per­ate trough doing so. Whilst the Ponzi econ­omy deliv­ered good num­bers, their job was easy– just report the good news. Now it’s all turned to crap and exposed as filthy DEBT , “Hoocoodan­ode?- cer­tainly not Moi if the boffins got it wrong”.

    Which just about sums up eco­nomic MSM in Aus­tralia– entirely bloody use­less and no worth at all.

    Best to keep that in mind when deal­ing with any invest­ment options going for­ward. They have no clue at all other than what the snakes in suites tell them. In that realm I also put Craig James, Evans at West­pac et al. All of them media prima donna’s talk­ing their book and deliv­er­ing a spin.

  17. Steve Keen says:

    The “Hoocoodan­ode meme” is a great way to describe that. Rather than admit­ting that their grasp of how the econ­omy works must be wrong, they begin by say­ing that it was unpredictable–nobody could have seen it com­ing. And to cover peo­ple like myself to whom the GFC was obvi­ously immi­nent, they describe us–as Ana­tole Kolet­sky did in the Busi­ness Times–as “Jehovah’s Wit­ness econ­o­mists who had been pre­dict­ing the end of the world every year for the past decade.“
    In real­ity a Post Key­ne­sian or Aus­trian view of eco­nom­ics made it easy to see this one com­ing. It’s the neo­clas­si­cal (or at best what Joan Robin­son once called “bas­tard” Key­ne­sian) vision of how the econ­omy oper­ates that pre­vented them see­ing this com­ing.
    I hope real­ity will set in when they find at social occa­sions all over the world that the group that was least aware this was on its way were “pro­fes­sional (neo­clas­si­cal) economists”.

  18. Effit says:

    I’ve been re-reading notes (that I had mis-laid) that I took at a Sym­po­sium in May 2008 ‘The Sub-Prime Mort­gage Melt­down’ where Steve was a speaker and also included a speaker from the Reserve Bank and one from Trea­sury along with var­i­ous other academics.

    Funny how the aca­d­e­mics got it right in predicting/warning what was about to hap­pen – whereas the Reserve Bank speaker seemed to ‘sit on the fence’ and the Trea­sury speaker seemed to think noth­ing would touch Aus­tralia, and any­way it was all over really.

    His speech had the finan­cial cri­sis all in the past! I could quote reams from it, but just a few will do. ‘While the imme­di­ate cri­sis is fad­ing…’ And ‘…while plenty of prob­lems remain, the global finan­cial sys­tem is not hurtling towards destruc­tion.’ And ‘… there must have been pow­er­ful off­set­ting forces which pro­tected the Aus­tralian finan­cial sys­tem from seri­ous injury’. Ouch! I won­der if he would feel embar­rassed now if he ever re-read his speech? He’s prob­a­bly become one of the “Hoocoodan­ode” meme that are bob­bing up all over the place now.

  19. clive says:

    Inter­est­ing arti­cle by George Mon­biot… how the US Killed Keynes’s Pro­pos­als at Bret­ton Woods

    http://www.monbiot.com/archives/2008/11/18/clearing-up-this-mess/

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