Flattr this!

Google runs a reg­u­lar sem­i­nar series on top­i­cal issues, which I spoke at last week. There was a sub­stan­tial audi­ence (see the quick scan of the audi­ence below) and Google’s staff lived up to their hyper-intel­li­gent and hyper-engaged rep­u­ta­tion.

Steve Keen’s Debt­watch Pod­cast 

| Open Play­er in New Win­dow

I gave a pre­sen­ta­tion that com­bined my stan­dard talk on debt and Min­sky, with some expo­si­tion of the Cir­cuit and Min­sky mod­els, befit­ting of an audi­ence to whom sim­u­la­tion is no big deal–unlike eco­nom­ics con­fer­ences where such approach­es are still fringe activ­i­ties.

The dis­cus­sion was also exten­sive, and inter­twined with the talk, so it went for a long time–almost two hours. Most of the first hour was my lec­ture:

Steve Keen’s Debt­watch Pod­cast 

| Open Play­er in New Win­dow

And most of the sec­ond hour was an exten­sive dis­cus­sion with Google staff that I had to call an end to because my voice was about to fail:

Steve Keen’s Debt­watch Pod­cast 

| Open Play­er in New Win­dow

Next week I hope to post the recent pre­sen­ta­tion to UNEP of my work with the CSIRO, which will show­case both the dynam­ic mul­ti­sec­toral mon­e­tary mod­el of pro­duc­tion I have built, and the CSIRO’s mul­ti­di­men­sion­al-data­base-dri­ven bio­phys­i­cal mod­el of the econ­o­my.

On anoth­er note, I have writ­ten a fea­ture for the April issue of Dis­sent (Num­ber 32, Autumn 2010), dis­cussing the usu­al vexed issue of Aus­tralian house prices. As part of it I gave my per­spec­tive on why Aus­tralia has to date come through the GFC so well, and one aspect of that was being on the receiv­ing end of largess from Chi­na’s stim­u­lus.

I not­ed how­ev­er that Chi­na’s largess may be com­ing to an end:

China’s stim­u­lus includ­ed a lend­ing fren­zy that only Chi­na could have inspired, since while finance in The West is large­ly an inde­pen­dent force to which gov­ern­ments kow­tow, Chi­na is still fun­da­men­tal­ly a com­mand soci­ety: the best guar­an­tee against crit­i­cism when things go wrong is to be able to prove that you car­ried out instruc­tions to the let­ter and beyond.

I well remem­ber a tour of Chi­na I orga­nized for Aus­tralian jour­nal­ists in 1979, just after the fall of the Gang of Four. An anom­alous pair of sta­tis­tics had turned up just before the tour began: Chi­nese light indus­try out­put had risen 17%, but heavy indus­try had fall­en by 7%: how could these two con­tra­dic­to­ry things hap­pen, our par­ty of large­ly eco­nom­ic jour­nal­ists won­dered?

We got our answer from a meet­ing with the May­or of Shang­hai and an offi­cial who title was the “Eco­nom­ic Boss” of Shang­hai: the Cen­tral Com­mit­tee of the Com­mu­nist Par­ty of Chi­na had issued a direc­tive to “pro­mote light indus­try”. So what did they do?

We stripped heavy indus­try fac­to­ries and turned them into light indus­try”.

In Chi­na, if a com­mu­nist par­ty offi­cial tells a bank to lend, it lends. Chi­nese lend­ing rose 95% in 2009 over 2008 lev­els, boost­ing its mon­ey sup­ply by over 27%. That has undoubt­ed­ly caused unin­tend­ed con­se­quences that the Chi­nese gov­ern­ment may well now seek to reverse—and its recent deci­sion to increase the reserve ratio is a sign that this rever­sal may already be in train. If so, our Chi­nese largess could dry up just as sud­den­ly as it began.

And today we learn that Chi­na has instruct­ed its banks to stop lend­ing

To read the rest of the arti­cle, buy Dis­sent when it comes out in April.

Bookmark the permalink.