I was recent­ly informed that a Span­ish trans­la­tion of Debunk­ing Eco­nom­ics is now avail­able via Ama­zon Spain, under the title “La Economía Desen­mas­cara­da”

There’s one review so far:

The main­stream eco­nom­ic idea that banks are just inter­me­di­aries between savers and investors is a fan­ta­sy, but giv­en that fan­ta­sy, their argu­ment that the lev­el and rate of change of pri­vate debt are not macro­eco­nom­i­cal­ly sig­nif­i­cant (except at the “Zero Low­er Bound”) is cor­rect. But in the real world, the role of the lev­el and rate of change of pri­vate debt is cru­cial. I illus­trate this by build­ing a Min­sky mod­el of Loan­able Funds and con­vert­ing it to the real world of Endoge­nous Mon­ey. Then I explain how cred­it growth plays an essen­tial role in aggre­gate demand and income, and how this is con­sis­tent with the tru­ism that Expen­di­ture equals Income.

As I explained in my last post, banks can’t “lend out reserves” under any cir­cum­stances, which under­mines a major ratio­nale that Cen­tral Bank econ­o­mists gave for under­tak­ing Quan­ti­ta­tive Eas­ing in the first place. Con­se­quent­ly, the hope that Bernanke expressed in 2009 is “To Dream The Impos­si­ble Dream”:

To dream the impos­si­ble dream
To fight the unbeat­able foe
To bear with unbear­able sor­row
To run where the brave dare not go

For­mer Chair of the Fed­er­al Reserve Ben Bernanke lis­tens while US Sec­re­tary of the Trea­sury Jacob Lew speaks at the Brook­ings Insti­tu­tion July 8, 2015 in Wash­ing­ton, DC. AFP PHOTO/BRENDAN SMIALOWSKI (Pho­to cred­it should read BRENDAN SMIALOWSKI/AFP/Getty Images)

I began anoth­er post crit­i­cal of Joe Stiglitz’s analy­sis with the caveat that I like Joe. I’ll add to that that I respect his intel­lect too, both because he’s very bright—you don’t win a Nobel Prize (even in Eco­nom­ics!) with­out being very bright—and because com­pared to some oth­er win­ners, he is very capa­ble of think­ing beyond the lim­i­ta­tions of the main­stream.

But there are some main­stream con­cepts that are so deeply embed­ded in even high­ly intel­li­gent, flex­i­ble thinkers like Joe, that they con­tin­ue think­ing in terms of them, when a bit of real­ly seri­ous thought would show that the con­cepts are in fact non­sense.

The great tragedy of the glob­al eco­nom­ic malaise is that it is caused by a short­age of some­thing that is essen­tial­ly cost­less to pro­duce: mon­ey.

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I like Joe Stiglitz, both pro­fes­sion­al­ly and per­son­al­ly. His Glob­al­iza­tion and its Dis­con­tents was vir­tu­al­ly the only work by a Nobel Lau­re­ate econ­o­mist that I cit­ed favourably in my Debunk­ing Eco­nom­ics, because he had the courage to chal­lenge the pro­fes­sion­al ortho­doxy on the “Wash­ing­ton Con­sen­sus”. Far more than most in the eco­nom­ics main­stream—like Ken Rogoff for exam­ple—Joe is capa­ble of think­ing out­side its box.

But Joe’s lat­est pub­lic con­tri­bu­tion—“The Great Malaise Con­tin­ues” on Project Syn­di­cate—sim­ply echoes the main­stream on a cru­cial point that explains why the US econ­o­my is at stall speed, which the main­stream sim­ply doesn’t get.

I’ve attend­ed two con­fer­ences in two days where both the pow­er and the impo­tence of the Euro­pean Cen­tral Bank (EBC) have been on vivid dis­play.

Its polit­i­cal pow­er is con­sid­er­able, both in form and in sub­stance. At both sem­i­nars, the ECB speak­er—ECB Board mem­ber Peter Praet at the first, and ECB Pres­i­dent Mario Draghi at the second—spoke first, and then left. In form, the ECB has no need to defend its poli­cies because it is unim­peach­able in its exe­cu­tion of them. In sub­stance, it does not even con­sid­er­ing engag­ing with its subjects—I use the word deliberately—in open and robust dis­cus­sion.

Paul Krugman’s lat­est col­umn—“Check Out Our Low, Low (Nat­ur­al) Rates” (which he didn’t flag as “Wonk­ish”, even though it is so in spades—noted that the “nat­ur­al real rate of inter­est” was falling, and that this jus­ti­fied the low inter­est rate set by the Fed­er­al Reserve.

And this made me think about Karl Marx.

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Actu­al­ly they’ve done no such thing. But they do effec­tive­ly assume that it’s unnec­es­sary all the time.

This tran­scen­den­tal truth became appar­ent to me in the reac­tions I have had from main­stream econ­o­mists to a lec­ture I gave to my Kingston stu­dents this month (which is post­ed on my YouTube chan­nel and blog).

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One of the very enjoy­able aspects of being in Lon­don is speak­ing reg­u­lar­ly with Simon Rose on the busi­ness-ori­ent­ed inter­net radio Share Radio. I know I can talk under wet cement; I think Simon could man­age to talk after it had set sol­id. We have a great time ban­ter­ing about top­ics eco­nom­ics, and I hope it’s of inter­est to the audi­ence as well. Here’s the lat­est install­ment, with some ear­li­er ones avail­able here.

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