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.
A Twitter follower accused me of being “a little nasty” with my last blog post (see Figure 1). He was right, and I don’t apologize.
I’ve spent 40 years trying to highlight just how limited the dominant ideas in economics are. But even I didn’t fully appreciate how tiny the intellectual gene pool behind these ideas was.
Then, as I started to write a post on the economic issues in the Bernanke-Summers debate, I re-read Summers’ original secular stagnation post and realized that, not merely were the ideas coming from a single perspective, most of the major proponents of these ideas came not only from the same University (MIT), and even the same seminar (Class 14462, conducted by Stanley Fisher).
There are many ways that you can divide the world into two groups. Men and women, for example—with the former being about 50.2% of the population and the latter 49.8%. Or those that like math and those that don’t—where there are no accurate figures, but I’d hazard a guess at a 10% to 90% split.
The Financial Crisis of 2007 was the nearest thing to a “Near Death Experience” that the Federal Reserve could have had. One ordinarily expects someone who has such an experience—exuberance behind the wheel that causes an almost fatal crash, a binge drinking escapade that ends up in the intensive care ward—to learn from it, and change their behaviour in some profound way that makes a repeat event impossible.
A Twitter correspondent reminded me of this interview from two years ago in Ireland, where the topic was predominantly the Euro, the Maastricht Treaty, and the likelihood of a political break in Europe due to austerity.
The discussion has quite a bit of relevance to what is happening in Greece now–and what may happen in Spain later this year. Hence I thought it was worth re-posting it.
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