Nov24
HARDtalk interview in 25 minutes: 3.30PM Sydney time
on November 24th, 2011 at 3:07 pmPosted In: Debtwatch
The HARDtalk interview, which was held over from Monday due to the renewed uprising in Egypt, will go to air in about 20 minutes time. If you don’t have cable access to the BBC World Service, you can watch it via Livestation, as I will be doing:
Dear Steve, love your work, it seems you are getting some traction. Have you seen the work by Jay forrester, using system dynamics to understand the Economy. There is a video on google videos with a lecture he gave into two parts for the 16th MIT Killian award. You will be very interested in thensecond lecture about 60 minutes in!
I know his work very well, and one major objective of mine is to help port his approach to modeling into economics. However I haven’t watched tha specific video. What’s at that point that I should check out?
He beautifully illustrates that depressions are systemic features of an economic system run on the prevailing implicit beliefs!! You would be very pleased!
Hi Steve,
Just watched the clip. Nice job dodging her various ambush attempts in the interview. However, there are several problems with your writeoff idea.
It doesn’t matter how charismatic Obama is. He would never be able to implement an idea like this for several reasons:
The rightwingers would scream “socialism”. They’d call for his impeachment. The MSM (most of whom have backed him up until now) would all turn against him. And other stuff as well.
Another problem. How do you implement this on a practical level that would be fair to everyone? Does this mean a new govt. agency (a “debt relief czar”)? How do you determine what’s a “legitimate” debt and what isn’t (for lack of a better phrase)?
Did you know that here in the States debtor prisons are making a comeback? Various debt consolidation firms sound like they’re they’re the perfect solution. But they’re not. Also, bankruptcy isn’t the instant cure that many think it is. Bankruptcy doesn’t protect you from paying off student debt. You have to wait at least twenty years before you can apply to have it forgiven. This in a Depression economy.
Some politicians here are repeating the Bush II “be patriotic and shop” line he used after 9/11. Do your part for the Homeland. But also, if you’re struggling, that’s your fault.
Is bankruptcy easy to file for in Australia? Someone told me that if I emigate to Australia and have a great credit history, that doesn’t matter. I have to start at zero and build up a new one to be eligible for various things (everything from applying for jobs to buying a car and more).
This should be carried out. However, short of mass riots in the streets here, it won’t for a long time.
I’ve got it here: http://news.bbc.co.uk/1/hi/programmes/hardtalk/9641873.stm
Did the camera start rolling half way through?
Steve you were also name checked in this article in the Guardian: http://t.co/UhrseOer Did you meet with Laurie Elliott when you were over here?
Yep. Had a nice chat with Larry which he wrote a blog post on. I’m waiting now for a review of the book.
I caught the interview this morning on Newsradio. I thought you explained “how we got here” very well, but “how do we get out of it” – not so well. The Gov’t gives money to everybody? – I just can’t see that happening – anyway I am one of the few people that are debt free and actually have SAVINGS, I would be concerned that the value of these savings would be blown away.
Mike
That’s precisely why I spoke of a “modern Jubilee” Bankster. I think News Rado may only have played an excerpt–and it wasn’t easy to portray the concept well even in the full interview, given the format of HARDtalk.
Well Mr Keen I second Bankster you explained well “How we got here”
As a HARD saver group we will never allow a debt jubilee that is hidden money printing.
No free lunches Mr Keen something you don’t understand, someone has to pay who will it be the savers,pensioners and taxpayer?
Good example of your debt jubilee is Greece 50% haircut on bonds who pay for that Mr Keen savers pensioners and the taxpayer?
Interest rates have soar in Europe since your debt jubilee making matters worst who in their right mind is going to put one dollar into the bond market of Europe now?
That is your problem with a debt jubilee higher interest rates and no confidence in the banking system.
Or will the elite wall street crowd and university educated students eventually be told to honour their debts, there will be no debt jubilee funded by Mr Soros and adbusters if us HARD savers speak out.
Sj,
What Steve said was if there was no debt jubilee then be prepared for another Japan only worldwide. Steve also said to the interviewer that it was inappropriate to use Greece as a case study.
I watched it on iplayer and then listened on newsradio around 4am. I thought Steve handled the questions extremely well. Especially when he explained that it had to be a more modern version of a jubilee because of the interconnectedness of the monetary system which exists today.
I’ve listened to quite a few people talk about the current situation and IMO he’s one of the few who ever comes up with solutions. As Steve says this is a systemic failure and it needs to be handled as such. The consequences of another Hitler or another war or both far outweigh whether a few of us are savers or spenders.
For the record I to am a saver, but I can assure you that I doubt I’m going to fret about the fact that some ****head down the road who isn’t gets a payout and I don’t. There’s a bigger picture here rather than you or I.
What is the big picture Clive?
Road To Serfdom in Nazi economics view and no freedom of the individaul to have a independent view and state the obvious that debt jubilee will make matters worst.
Greece as a case study is the real world Clive not some naive academic complex model that will not work.
Lets all hold hands and be happy little campers and be wipe out as savers because it’s a good idea to stop hitler is naive delusional herd thinking.
A Hitler is quite possible if you try a debt jubilee because it will only cause higher interest rates and great poverty for the masses.
The Road To Serdom by F.A. Hayek please read chapter 10.
Why The Worst Get On Top.
Quote “It is a corollary of this that if we wish to find a high degree of uniformity and similarity of outlook we have to descend to the regions of lower moral and intellectual standards where the more primitive and common instincts and tastes prevail,It is as it were the lowest common denominator which unites the largest number of people”
Lowest common denominator is rotten greedy high debt individauls not wanting to honour their debts!
So savers and productive successful people are seen as the enemy, yet they are the backbone of a rich well balance society.
Sj
“No free lunches Mr Keen something you don’t understand, someone has to pay who will it be the savers,pensioners and taxpayer?”
True. The debt jubilee is a really silly poorly thought through idea by Steve. One that he should drop. The consequences of Euro countries being encouraged to walk away from their debt is plain for all to see
Any debt write off will smash pension funds, taxpayers or savers and benefit irresponsible spenders. The ECB should step in if required and Greece should honour their debt. As should all debtors unless the law at the time of incurring the debt allows for a write off (or down).
“IMO he’s one of the few who ever comes up with solutions”.
Complete rubbish.
The obvious solution for monetary sovereign countries (have their own central bank and floating currency) is more Govt debt from higher Govt deficits from spending or tax cuts.
For Euro countries its the ECB buying bonds as appropriate. This solution has been suggested many times but unbelievable ignorance about debt (esp the difference between Govt debt and non Govt debt) is stopping this simple solution being implemented.
“For the record I to am a saver, but I can assure you that I doubt I’m going to fret about the fact that some ****head down the road who isn’t gets a payout and I ”
Maybe have a vote then. and those who vote yes to a write off should pick up the full cost
Those that don’t should not suffer any loss in any way. From increased tax or losses from pension funds or other investments
RJ, “The obvious solution for monetary sovereign countries (have their own central bank and floating currency)” and that’s worked well so far has it?
“For Euro countries its the ECB buying bonds as appropriate. This solution has been suggested many times but unbelievable ignorance about debt (esp the difference between Govt debt and non Govt debt) is stopping this simple solution being implemented.”
Buy? with what? It doesn’t matter which way you look at it, it all ends up government debt in the end. Steve’s idea is just far more effective at getting people to spend again. What’s a tax cut going to do for the 20+% unemployed in many parts of Europe?
Yes I know it’ll get business rolling again. Business in the US is loaded with cash they are paying down debt and cutting staff and stock. The problem for business is no ones buying because they the consumers are paying down debt or they are unemployed.
Sj “The Road To Serdom by F.A. Hayek please read chapter 10.” Ah yes, Hayek …can’t say I’ve bothered to read his stuff at all ….got a little too close to all those boys in Chicago, consequently to much of Milton Friedman rubbed off on him, polluted his Austrian thinking.
“Lowest common denominator is rotten greedy high debt individauls not wanting to honour their debts!”
No don’t agree. The lowest common denominator is the person who forgets that: “but for the grace of god go I”
Sorry Sj, you and Rj seem to have this simplistic idea that every individual that gets into debt in a depression got there by his or her own making and should be punished. Nothing could be further from the truth, talk to some people that have lived through one.
Rj, OK with me, have the vote, one of the great things about Australia is that there are still enough people left in this country that are big enough to accept that some people made mistakes and rather than punish them for it they are willing to help out. Perhaps it goes back to our convict roots. Sharing was the norm.
Watch your language RJ. And your number of posts per day.
Finally caught the HardTalk interview last night. Given the limitations of the format I thought Steve did a great job.
If only more people understood just how money is created, and how it is “merely” an abtract human-construction, and thus controllable, the idea of a jubilee would not seem so threatening.
I would be good to see the jubilee idea developed into a practical policy proposal.
Straight after HardTalk was a the first of a new 2 part program “Radical Economics”
[http://www.bbc.co.uk/programmes/p00lz2n5] spruiking Hayek and of course ignoring debt and of course ignoring the social and political consequences of his purist capitalism.
Well Mr Keen it’s a new day so I will only make one comment a day.
As a HARD saver group we would like to know more details on how you are going to make this debt jubilee happen and the suckers who are going to pay for it?
Clive no victims here nobody forced borrowers by a gun to go into big debt so they can have a new 4 bedroom home two bathrooms,new BMW, and overseas holidays.
Take responsibility borrowers and listen to your wise grandparents and live within your means, because I can tell you this Clive we savers are not paying for a debt jubilee so lowest common denominator can have the good life of the rich and famous without paying for it.
As for Hayek his great wise book Road To Serfdom has been blame by the extreme left for all the GFC problems.
If you read the book, Hayek is against central banks setting interest rates and bail outs.
Instead we had super low interest rates set by our own RBA and the FED which cause a massive increase in debt levels.
Mr Keen was screaming for lower interest rates all the time, while in a free market by Hayek interests rates would be higher to stop people going into unsustainable debt.
Central banks keep interest rates below the rate of real inflation while the free market under Hayek would never let that happen.
Sj,
‘I can tell you this Clive we savers are not paying for a debt jubilee‘
First up just who is we I’d consider myself a hard saver but please don’t put me in your camp. There may not be any forced victims as you say at present but the housing crisis has only begun in Oz. If the world economy tanks like many think it will, it will be Mums and Dads and family out of work and a mortgage around their neck. Some of those people may never have missed a payment in their lives. Are they the lowest common denominator?
Perhaps I’m a little hard on Hayek but anybody that rubs shoulders with that Chicago mob immediately makes the name Pinochet spring to my mind.
‘Mr Keen was screaming for lower interest rates all the time, while in a free market by Hayek interests rates would be higher to stop people going into unsustainable debt.‘
Perhaps I’m reading different stuff on this site than you are. Wasn’t it ‘Mr Keen’ who was very critical of Greenspan’s low interest rates fuelling a housing bubble. Wasn’t it ‘Mr Keen’ who said that if Greenspan had of been constrained the level of debt may not be at the levels it is today.
If it’s the present you’re referring to and you believe that a competent economist should raise interest rates in the middle of debt deflation then there’s even less chance I’ll read Hayek.
‘Central banks keep interest rates below the rate of real inflation while the free market under Hayek would never let that happen‘
The free market? That’s the same free market that’s had a pretty good run of it for the last 30 years. That’s the same free market that wants to cut free education, free health care, subsidised pharmaceutical, pure research at universities, rape and pillage national parks……
Yes I know them well, those free market capitalists, they’re the first ones to come cap in hand to the very government they continually try to shrink and condemn for it’s so called socialist ways. What are they asking for? bailouts of course.
But hey, what the hell would I know.
Sorry Clive I can only make one comment a day!
We both have different perspectives on Hayek higher interest rates and Mr Keen lower interest rate policy of today.
Mr keen was very aggressive and critical towards the RBA when interests rates increase I remember a picture of a gun saying RBA will blow themselves up with debtdeflation.
Of course that never happen and debt increase by over 30% because of low interest rates policy and Mr Keen walked to the highest mountain in Australian.
As for the free market of Hayek it was never try!
Long Term Capital should never have been bail out and Mr Greenspan super low interest rate policy was never Hayek free market ideas.
Hayek ideas of no central planning of interest rates, which means sacking all the RBA Board and saving us taxpayers millions of dollars a year on overpaid salaries.
The suckers who buy overvalued houses then realise that cost of living is sending them bankrupt, can blame the debt jubilee of inflation.
No free lunches Clive something you bleeding heart savers don’t understand.
Clive you are in the bleeding heart emotional savers camp and SJ is the HARD rational savers camp.
So with respect it’s time that both of us different savers take a break.
Good luck.
“Mr Keen was screaming for lower interest rates all the time, while in a free market by Hayek interests rates would be higher to stop people going into unsustainable debt.”
Money is needed for two reasons
Consumption and
Savings for retirement or general savings
To save for retirement. A person must have the money first. This money is transferred to a pension fund which then invest this money. The money never disappear unless it in invested in Govt bonds. Otherwise it just transfer from saver to pension fund to investment seller etc.
For one person to obtain money. Another person, company or the Govt MUST increase their debt holding. As money can only increase with an equal increase in debt.
Money = a financial asset which = a financial liability.
How then would you finance pension saving. My view is the Govt must step in and run larger deficits. And issue bonds (at the required interest rates) for pension funds to hold to stop monetary inflation.
Only ignorance (and many economists are as bad as everyone else) of the difference between Govt debt and non Govt debt stops this occurring.
Govt debt in a monetary sovereign country is completely different to non Govt debt. We collectively understood this once but have now forgotten.
Thanks Sj, Remember if you and I are cashed up and have minimal debt then provided we don’t loose our jobs or if we do, we still have enough money to get through a crisis then neither of us should take much of a hit.
I see where you are coming from with some of the irresponsible spending that has taken place, but as I mentioned above, if the crisis escalates some quite responsible people will be taken down with it. That concerns me greatly. Perhaps I am a bleeding heart.
I don’t think Mr Keen or anyone else has all the answers to this problem. I’m sure Steve would be the first to admit that. Steve knows his ideas will be thought of as radical and that he would cop some flack, however being the sort of person he appears be I’d say he’s thought this through fairly well before hand.
I’m more inclined to listen someone who saw the crisis coming and recognises what the causes were, than the other mob who still refuse to believe that debt can be problem.
How anyone can believe that anything that has so much human interaction as an economy can be in equilibrium at any time, quite frankly, amazes me.
Best of luck
In many ways I agree with Steve Keen’s vision, I talked about it in terms of “The Great Reset” , as one of the many revolutions that gave shape to our societies.
Whether we turn left or right, we are now in an impossible situation, a kind of “no out area”. See it as a natural disaster, a catastrophe. Under such circumstances a rational solution is impossible.
Everyone points to everyone and no one takes responsibility for their own behavior, in fact, because nobody can be held responsible for their own behavior.
In giving shape to societies we can walk many paths, inevitably, some of them are wrong. Many societies had been there, none of them reached the thousand years.
The radical method Steve Keen talks about may be one of the possible solutions. In modern terms: Reset and start over again.
For about Europe: If the Euro failes, Europe might fail. Resentments like those played in the Balkan can give rise to great sufferings in Western Europe. That is one of the other radical methods.
Greetings from The Netherlands.
Title: koonyeow Discredited (a.k.a. koonyeow Not Keeping His Word, Which Is ‘Farewell’. Shame on Me)
For those of us who are outside of UK, a kind soul has uploaded the full interview to YouTube:
http://www.youtube.com/watch?v=rGkmgnprrIU
@ Koonyeow November 28, 2011 at 5:34 pm
Everyone assumes Japan is a fate worse than death, because of its high-debt low-growth recent past. But there is evidence that the misery of Japan is grossly over exaggerated. According to The Economist, the low-growth in Japan is demographically related. In the past decade, unemployment rate is half that of US or Euro area and its per capita GDP is higher than either region:
http://www.economist.com/node/21538745
The world might need to grow more slowly economically like Japan, but still improving its standard of living, consistent with the realities of limits to growth. The mindless mental habit of constant equilibrium growth dies hard. It is the assumption underlying the current “problem”.
Hence, it is not clear to me that we even understand what the real problem is now (apart from the obvious). We do know that governments did a lot things during the Great Depression which might have prolonged it, as Steve said people at that time thought that the end of the crisis was around the corner (due to government measures being taken), similar to what’s happening now.