More on Keen vs. Krugman
David Burchell provides his interpretation of the Keen vs. Krugman debate on RadioNational Counterpoint with Michael Duff and Paul Comrie-Thomson.
David Burchell provides his interpretation of the Keen vs. Krugman debate on RadioNational Counterpoint with Michael Duff and Paul Comrie-Thomson.
David Burchell:
It sounds as if Burchell has his cosmologies mixed up. Copernican cosmology underpins Modernism. Ptolemaic cosmology underpinned pre-Modernity, the Middle Ages.
And yes, the moral, political, social and economic structure that the Copernican model informs, and which has been the dominant cosmology since the 17th century, is very much under siege. Copernican cosmology calls for a highly ordered, hierarchical, predictable and unchanging universe with the sun at the center and the planets orbiting about. Each planet obeys immutable physical laws of motion which determine its path and its orbit (it’s place), and to break out of that path or orbit would be unthinkable. Perhaps the ethos is best captured by the Victorian era economist Alfred Marshall whose economic philosophy Robert Heilbroner describes as follows:
However, as Stephen Toulmin goes on to explain in Cosmopolis: The Hidden Agenda of Modernity, the indomitable human will has once again asserted itself:
David Burchell:
Here I strongly disagree with Burchell’s assertion that the relationship with China has nothing to do with banking.
The best and easiest-to-understand explanation of how banking and the real economy are inextricably intertwined in regards to China was given by Adam Curtis in his latest film, All Watched Over by Machines of Loving Grace.
The explanation begins here in Part 1, “Love and Power” at minute 50:48
http://topdocumentaryfilms.com/all-watched-over-by-machines-of-loving-grace/
Demon est deus inversus.
David Burchell said:
Burchell gives us a bowdlerized version of Keynes, sanitized of Keynes’ earlier comments concerning what Keynes called the “murder of Vienna” in which a Carthaginian peace was agreed upon following WWI, and Germany mandated to pay a sum of reparations so huge that it would force her into the most vicious practices of international trade in order to earn the pounds and francs and dollars.
Keynes’ opposition to the massive debt being heaped upon Germany was so strong that he resigned his position as Deputy for the Chancellor of the Exchequer and began a polemic against it:
Roosevelt had only intensified the practice of bailing out the banks that began under Hoover. But with Roosevelt it was a Faustian bargain (something Krugman seems to be in denial of), and the massive spending that was lavished on the banks to keep them afloat came with strings attached: regulation and supervision, and a humiliating public flogging.
Frederick Lewis Allen explains in Since Yesterday:
It would be interesting to know if Keynes actually believed in his heart of hearts that public spending offered a way out of the deflationary debt trap, or if he was merely placing a scientific imprimatur upon policies that had already been decided by political exigencies. I ask this because of something Allen says in Since Yesterday:
along with something Robert Heilbroner said in The Worldly Philosophers:
What we have to get comfortable with is the idea that the one reality is everywhere and at all times……at least two fold in character. And that wisdom is both understanding that and taking responsibility for balancing oneself and the systems you’re a part of.
Keynesianism was in the final analysis the culturally allowable “solution”. The real solution is not a redistributive elitist economic and monetary system, but a Distributist SOCIAL credit one designed for the greater freedom of everyone AND the system. And the wise and rapid resolution of the current crisis is an acceleration of debt reduction by pay off thereof.
If I were to describe this interview as superficial I flatter both the content and the knowledge of both interviewer and interviewee have on the topic.
There is no mention of growth in private debt other than whatever could be implied by “bad loan practices”.
Wow, I just found this. Regulators don’t want people to know the risks in the banking system in Australia, now this is interesting:
http://www.smh.com.au/national/financial-institution-risk-list-kept-secret-20111226-1pahf.html
I openly wonder, is this because, if this info were available:
a – people would be able to make informed decisions about their investments and banking services?
b – analysts such as keen and others would be able to suitinise the data and assess likely trajectory of the banking system, debt dynamics and broader economic implications with more accuracy?
The response from both the RBA and APRA (laywer) are not exactly comforting in the current economic climate. Especially when Australia’s alledged net liabilities are factored in:
“As at March 7, 2012, Australia’s gross foreign liabilities stood at $2.067 trillion….On the other side of the ledger, Australia’s gross foreign assets allegedly amount to $1.212 trillion. If that’s accurate, and if my maths is correct, our liabilities exceed our assets by about $40,000 for every man woman and child in the country.” from http://www.abc.net.au/unleashed/4017474.html. (note: I have not reveiwed the veracity of these figures).
It seems, more and more, in the current climate it is too risky for financial istitutions to provide information to citizens.
Thoughts anyone?
I agree with RickW. I heard it live and initially thought Paul Comrie-Thomson might as well have interviewed my elderly mother. On re-listening to it perhaps its not that bad. But Paul CT is no Lauren Lister and David Burchell is not pretending to be more than an educated man on the street. I hoped for a little more from someone from Steves own university.
“It seems, more and more, in the current climate it is too risky for financial institutions to provide information to citizens.
Thoughts anyone?”
Pardon my cynicism, OzLeroy, but I believe it was Henry Ford who quipped,
It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.
http://www.brainyquote.com/quotes/quotes/h/henryford136294.html#Q4dCsXMmAg1BM056.99
OzLeroy,
I would be more worried if immediately after the crisis the regulators did not have a list of risks to the Australian financial system.
They are also right to keep it from the public, who in general receive their information from general media, who will always turn a small thread of information into an exciting story for the sensation hungry general public.