New York Talk: Roo­sevelt Hotel, Fri­day 23rd

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Neat, Plausible, and Wrong: the deluded discipline of economics”

Blog mem­ber Robert Kahn has booked the River­side Suite for 5-8pm. The first hour will be meet and greet; I’ll give a talk with the above title from 6pm. After ques­tions and dis­cus­sion we’ll adjourn to some­where nearby for din­ner (sug­ges­tions welcome–somewhere that has low noise lev­els please since I have very bad hear­ing cour­tesy of a seri­ous case of tin­ni­tus).

Robert has forked out $500 to make the book­ing, so I’d appre­ci­ate atten­dees mak­ing dona­tions to him of about $20–25. With the expected num­ber of atten­dees, that should spread the finan­cial pain evenly.

I’ll put more details up later (I’m head­ing out for din­ner now)–by 4pm New York time on Fri­day.

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.
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  • If you’d like it to be a blog entry instead Lyon­wiss, let me know. I’ve been too flat out with travel and meet­ings to work on any­thing for a while–though I hope to have an entry up by the mid­dle of next week.

  • bret­t123

    I think that Gunny57?s descrip­tion of “clog­ging Steve’s Blog com­ments sec­tions?” very typ­i­cal of those that sleep 24/7 and that can­not see real­ity ”

    Just my 2 cents PJB but I think that is a bit harsh. 

    I like some of your com­ments too but have found myself skip­ping over them lately because they are too long and too numer­ous. If you want to change peo­ples opin­ions per­haps you need to con­cen­trate on qual­ity and not quan­tity. Peo­ple can always go to your blog if they want to find out more about what you believe…which I occa­sion­ally do.

  • Lucy­Lulu

    The first puz­zle is why has there been no real change in pub­lic pol­icy?
    My opin­ion? Because those mak­ing pol­icy per­ceive them­selves as ben­e­fit­ing from the sta­tus quo.

    Look­ing for­ward to your post on MMT, Steve! I do hope you will talk about the “gov­ern­ment deficits lead to pri­vate sav­ings” con­cept.

  • @ Bret­t123 Sep­tem­ber 25, 2011 at 8:22 pm | #

    Gun­ny57:

    … wouldn’t it be more ben­e­fi­cial to space sav­ing and order if you get a blog your­self and start writ­ing instead of clog­ging Steve’s Blog com­ments sec­tions?”

    Do you believe that Gunny57’s com­ment above is/was hon­est, sin­cere and truth­ful?

    I cer­tainly do not because Steve has no restric­tion on post­ing com­ments and there­fore, I could not, can­not be guilty of “clog­ging Steve’s Blog com­ments sec­tions?”

    The fact is, that nobody else was com­ment­ing so it appears that I am the only com­menter, which is cor­rect. But it does not sug­gest or even imply the impli­ca­tion that I am “clog­ging” the site.

    Gun­ny57 also sug­gests that I don’t have my own blog. Do I believe that he is that naive, espe­cially when vis­it­ing his web­site by click­ing on his han­dle, one finds or sus­pects that he is dredg­ing for cus­tomers — er, anony­mously.

    I believe that my posts are qual­i­ta­tive and of “val­ues”, so instead of shoot­ing the Mes­sen­ger, com­ment as to where I am flawed, or incor­rect, er, please.

  • Lyon­wiss

    Lucy­Lulu Sep­tem­ber 25, 2011 at 9:26 pm

    You said: “The first puz­zle is why has there been no real change in pub­lic pol­icy? My opin­ion? Because those mak­ing pol­icy per­ceive them­selves as ben­e­fit­ing from the sta­tus quo.”

    Your sweep­ing answer, if ade­quate, implies change would never occur, whereas it does some­times. Also, you are assum­ing all pol­icy mak­ers are against change because they ben­e­fit from the sta­tus quo. In fact, many pol­icy mak­ers and politi­cians have spo­ken out for change. Why have they been unsuc­cess­ful?

    Apart from Machiavelli’s well-known com­ments about the resisi­tance to change due to self-inter­ested incen­tives, the ques­tion is really about “how”, and rather less about “why”, the sta­tus quo is main­tained, given that politi­cians and pol­icy mak­ers have to respond to demands for change.

  • mahaish

    The first puz­zle is why has there been no real change in pub­lic pol­icy?
    My opin­ion? Because those mak­ing pol­icy per­ceive them­selves as ben­e­fit­ing from the sta­tus quo.

    Look­ing for­ward to your post on MMT, Steve! I do hope you will talk about the “gov­ern­ment deficits lead to pri­vate sav­ings” con­cept.”

    what did sir humphrey say, lucylu

    its folly to increase ones knowl­edge at the expense of ones author­ity,

    just about every finan­cial trans­ac­tion within a west­ern econ­omy goes in and out of a bank account. if they want to fix this mess, gov­ern­ments have to be pre­pared to stick it to the bankers. 

    the first thing that needs to hap­pen is that the share­hold­ers of the trans atlantic bank­ing sys­tem need to have a sig­nif­i­cant deval­u­a­tion of their equity posi­tion or loose their equity posi­tion alto­gether,

    but that seems to be the last thing on the minds of reg­u­la­tors around the world, who seem much more focussed on inter­nal deval­u­a­tions and the auter­ity that comes with it.

    i think sep­tem­ber 2008 when lehmans went down was 1929, and we are at 1932. and again like then, we talk­ing about mass unem­ploy­ment, wage cuts and tax rises around the devel­oped economies. the only piece miss­ing is the wave of pro­tec­tion­ism that also started to take hold, but there are still many many moons to go in this lit­tle tragedy.

    oh, and yes, the yanks also threw out her­bert hoover and his clas­si­cal eco­nom­ics based advi­sors and voted in FDR and his emer­gency bank­ing act. 

    we can have a debate about whether the act was mainly cos­metic in nature, but there was a polit­i­cal reac­tion at the bal­let box 

    the bank­ing sys­tem will be reformed, we just have to wait for the cur­rent gen­er­a­tion of polit­i­cains to be thrown out either by the bal­let box or some­thing worse, by those who can see a gap in the mar­ket for alter­na­tive ideas and a pub­lic depser­ate enough to start lis­ten­ing.

    the tim­ings not right, but it will be.

  • mahaish

    it will be inter­est­ing to see what steve comes up with lucylu re mmt,

    but i will leave you with this pre emp­tive quote,

    As long as Steve oper­ates within con­ven­tional account­ing tra­di­tions and is stock-flow con­sis­tent then endoge­nous money the­ory is fully cap­tured in the hor­i­zon­tal dimen­sion of mod­ern mon­e­tary the­ory.”

    bill mitchell.

  • mahaish

    and just incase some of us think mmt ers arent minkian,

    heres ran­dal wray

    http://www.youtube.com/watch?v=gRE-IDYfi8Y

  • mahaish

    sorry my typ­ing and spelling is ter­ri­ble. i meant myn­skian,

    although im open to the sug­ges­tion it was a freudian slip, given the fact that myn­skians prob­a­bly feel about as endan­gered as a minky whale. 😉

  • koonyeow

    Title: Another Nail in The Cof­fin of Money Mul­ti­plier The­ory

    I’ll let the screen­shot below speaks for itself. Every new quar­terly data will add a new nail in the cof­fin. Even­tu­ally the cof­fin will be full of nails that they can only add nails in the corpse, just like the char­ac­ter in the movie Hell­raiser.

  • Peter­jbolton,
    the prob­lem, with cru­saders, is always the same. They are so engrossed in their “mis­sion from God” that they line up all the “ene­mies”, com­bat­ants , civil­ians, women, chil­dren, and , after a per­func­tory request of ” con­vert or else !” pro­ceed to mass slaugh­ter every­one leav­ing to God him­self the annoy­ing task of sort­ing them with what­so­ever cri­te­ria.

    Behav­ior scarcely con­ducive to win­ning any earth and/or mind, and in the end, deeply coun­ter­pro­duc­tive for the crusade’s objec­tive.

    I admit at being naive, as I was fol­low­ing this debate on an I-Pad at night , and didn’t dis­cover the exis­tence of your blog until few min­utes ago..
    More­over, you choose, in your supremely effronted way, to ignore the lit­tle com­ment I was enjoy­ing some of your com­ments and was just observ­ing they were a bit infla­tioned, opin­ion par­tially shared by Steve…and pro­ceeded to build up a com­plete fan­tasy on who I am , and what my “scopes” would cer­tainly be, with­out hav­ing even a soli­tary clue on who I really am.
    Get­ting per­sonal on some­thing of no rel­e­vance.

    About the “dredg­ing for customers”…All the fel­low blog­gers here can see by them­selves the absolute fan­tasy of that accu­sa­tion, just going to see my post his­tory, and also due to the fact that sin­gle per­sons do not have access of what I do, if not through insti­tu­tions strictly in New Zealand, and “dredg­ing” here would be impos­si­ble and a mar­ket­ing puerile mis­take.

    I came here to learn, from Steve, under­stand more of the real­ity out there, from him, and sup­port him, also finan­cially, as much as I could, to help him to ham­mer some rea­son in the head of elected offi­cials or elect­ing the ones that might have rea­sons to under­stand.
    As sim­ple as that.

    And that also lines up with the fact that I try to do my job in the most eth­i­cal way pos­si­ble, con­sid­er­ing the fidu­ciary duty to my cus­tomers well pre­vail­ing to any other con­sid­er­a­tion, and try­ing to help them to con­serve their sav­ings under­stand­ing and explain­ing them what real­ity is out there…also read­ing and spread­ing Steve’s knowl­edge.

    That is that..and since I do not want to dis­turb fur­ther this space,unless for rel­e­vant com­ments that could con­tribute to the spe­cific post topic, I will decline to fur­ther reply to any fol­low up of this you may chose to post.

    I just wish to warn you, that swish­ing that huge crusader’s sword left and right blindly, you may end up cut­ting a mate, or even hurt yourself…certainly, the cause you are cru­sad­ing for.

    Cheers

  • @ Gun­ny57 Sep­tem­ber 26, 2011 at 10:14 am | #

    Thanks Gunny: A lot of widely ranged assump­tion in that rant. No prob­lem as it is hearty.

    Allow me then to bring you some light — not new light; just some old for­got­ten light.

    I have oft stated that:

    “All that needs to be said, has been said”

    To sup­port that state­ment of a Cru­sad­ing “Mis­sion­ary from God” which BTW I do not con­sider myself: Per­haps you have mis­taken me with Lloyd C. Blank­fein?

    http://londonbanker.blogspot.com/2011/09/testimony-of-marriner-eccles-to.html

    Writ­ten his­tory tells us that the ancient Egyp­tians had to fix ancient Greece’s Eco­nomic mis­man­age­ment at least twice and from more or less exactly the same liq­uid­ity imbal­ances that plague the World today and I would haz­ard a guess that the words of Eccles Tes­ti­mony are an echo of the ancient past. This begs the ques­tion, will we ever learn or do we pre­fer to be masochis­ti­cally wiped out on a reg­u­lar basis?

    The answer is, prob­a­bly not but if we do desire to move for­ward and evolve towards sus­tain­able gov­er­nance, we must all become involved with that gov­er­nance (which is merely just true democ­racy ie of the peo­ple, by the peo­ple, for the peo­ple) and we must become involved at the edu­ca­tional level where Eco­nom­ics is linked directly to gov­er­nance as school­ing course work which should begin at Pri­mary school. 

    I pro­pose that we rid our­selves of this Sta­to­la­try dis­ease com­pletely.

    Law trumped Rea­son
    Power trumped Law
    Only Ethics can trump Power.

    I thank you for your hon­est com­men­tary which I accept at face.

  • Same here…

    Law trumped Rea­son
    Power trumped Law
    Only Ethics can trump Power.”

    Oh so true…!

    Cheers mate!

  • Guardian

    Hi Steve,
    Con­grat­u­la­tions on the fund­ing from the insti­tute for New Eco­nomic Think­ing.

    B.M.

  • alain­ton

    A fuller work­ing paper ver­sion of the Cec­chetti et al paper ‘The Real Effects of Debt’ has been pub­lished here http://www.bis.org/publ/work352.pdf

    The key sec­tion from my per­spec­tive is the one headed ‘why debt mat­ters’

    For a macro­econ­o­mist work­ing to con­struct a the­o­ret­i­cal struc­ture for under­stand­ing the econ­omy as a whole, debt is either triv­ial or intractable. Triv­ial because (in a closed econ­omy) it is net zero – the lia­bil­i­ties of all bor­row­ers always exactly match the assets of all lenders. Intractable because a full under­stand­ing of debt means grap­pling with a world in which the choice between debt and equity mat­ters in some fun­da­men­tal way. That means
    con­fronting, among other things, the intrin­sic dif­fer­ences between bor­row­ers and lenders;…
    As mod­ern macro­eco­nom­ics devel­oped over the last half-cen­tury, most peo­ple either ignored or finessed the issue of debt. With few excep­tions, the focus was on a real eco­nomic sys­tem in which nom­i­nal vari­ables – prices or wages, and some­times both – were costly to adjust…Money, both in the form of the
    mon­e­tary base con­trolled by the cen­tral bank and as the lia­bil­i­ties of the bank­ing sys­tem, is a pas­sive by-prod­uct. With no active role for money, inte­grat­ing credit in the main­stream frame­work has proven to be dif­fi­cult.

    Yet, as the main­stream was build­ing and embrac­ing the New Key­ne­sian ortho­doxy, there was a nag­ging con­cern that some­thing had been miss­ing from the mod­els. On the fringe were the­o­ret­i­cal papers in which debt plays a key role, and empir­i­cal papers con­clud­ing that the quan­tity of debt makes a dif­fer­ence.

    The lat­est cri­sis has revealed the defi­cien­cies of the main­stream approach and the value of join­ing those once seen as inhab­it­ing the mar­gin.
    In response to the chal­lenge, macro­econ­o­mists are now work­ing fever­ishly to put finan­cial sta­bil­ity pol­icy on the same the­o­ret­i­cal foot­ing that exists for con­ven­tional mon­e­tary pol­icy. They are work­ing not only to under­stand the sources of sys­temic risk, but also on how to work­ing (sic) through the impli­ca­tions.
    Like a can­cer vic­tim who can­not wait for sci­en­tists to find a cure, pol­i­cy­mak­ers can­not wait for aca­d­e­mics to deliver the syn­the­sis that will ulti­mately come. Instead, author­i­ties must do the best they can with the knowl­edge they have.’

    It is odd then they decide to treat debt purely empir­i­cally when the answer — that it is to do with the endoge­nous cre­ation of money — is star­ing them in the face. as they note ‘the basic form of debt has remained
    remark­ably con­stant both over his­tory and across coun­tries, empires and legal sys­tems. ’

  • yan­kee­jim

    A ques­tion: I read Harry Dent’s lat­est at Steves sug­ge­ston. Harry points out that the
    ’finan­cial sec­tor’ has the largest indebt­ed­ness of the sec­tors in the US at 17 tril­lion. Hav­ing stud­ied Steve’s Credit Cav­a­liers post and assum­ing banks are the finan­cial sec­tor I now am left won­der­ing why banks need to ‘bor­row’ money and who they bor­row it from? I think I
    mis­un­der­stand some­thing fun­da­men­tal here. Help. yan­kee­jim