The naivety of the UK economic debate

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I was inter­viewed by Chris Menon from Every Investor last week and asked to com­ment on the eco­nom­ic poli­cies of the two major par­ties in the UK elec­tion. Chris’s intro­duc­tion to the inter­view is below; click here to see the inter­view itself.

In an exclu­sive inter­view with Every Investor, Pro­fes­sor Steve Keen from Kingston Uni­ver­si­ty has warned that politi­cians who pro­mote aus­ter­i­ty eco­nom­ics are naïve.

The econ­o­mist, who was one of the few who pre­dict­ed the Great Reces­sion, warned last year that the US and UK economies wouldn’t make a sus­tain­able recov­ery due to the prob­lem of high lev­els of pri­vate debt – pub­lic debt being more a symp­tom than a cause of this eco­nom­ic malaise.

In this inter­view he gives a detailed expla­na­tion as to why the aus­ter­i­ty-heavy eco­nom­ic pol­i­cy of the Con­ser­v­a­tives (and the Lib­er­al Democ­rats), and the aus­ter­i­ty-lite ver­sion from Lab is naïve and will lead not to eco­nom­ic growth but to eco­nom­ic stag­na­tion.

Indeed, while not endors­ing any polit­i­cal par­ty, he does acknowl­edge that the eco­nom­ic poli­cies of the SNP and Greens make more sense.

This is a video that needs to be watched. It will give you insights that most pro­fes­sion­al econ­o­mists appear to lack. (Hence, their evi­dent sur­prise at news that the UK and US are slow­ing down).

It should also encour­age investors to be in ‘risk-off’ mode, which seems very sen­si­ble giv­en like­ly mar­ket volatil­i­ty that will fol­low the elec­tion and the grave eco­nom­ic news that we can expect this year.


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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.