One blog participant brought a post by George Monbiot to my attention. I frequently comment that the financial regime initiated after WWII omitted key ideas that Keynes proposed–in particular, a new currency for international trade and controls on the behaviour of surplus nations as well as those running deficits. Monbiot provides the historic detail of these proposals and their defeat. It is well worth a read.
It had to happen: neoclassical economists are now advising that the anticipated recession will be much milder if only workers would accept wage cuts.
This is getting a bit like Star Wars, but I promise–this will be the last post in this series. In the previous two, I constructed a model of a pure credit economy in which the money supply and economic activity can expand smoothly of time.
In the previous post, I outlined my basic model of a pure credit economy, in which a single initial loan allowed a continous flow of economic activity (at a constant level) over time. The basic flowtable of that system was:
This is an unplanned post that partly pre-empts what I’ll be writing in the February Debtwatch Report, where I will explain in full my theory of money creation in a pure credit economy. So this is somewhat out of sequence, and will undoubtedly be badly explained compared to what I put together for February.
Click on the cover to buy the eBook
Debunking Economics was first published in 2001 by Pluto Press (Australia) and Zed Books (UK). There has been renewed interest in it since I began warning of the impending financial crisis, and I decided to release the book in electronic format to make it more accessible (the hard copy can still be purchased, if your bookshop will order it, from Zed Books UK, or online from Amazon).
Two days ago the FBI indicted Bernie Madoff, principal of Bernard L. Madoff Investment Securities LLC, on securities fraud. Though the case has yet to run, in the indictment the FBI reported that Madoff confessed that his was “basically a giant Ponzi Scheme” that may have lost some extremely high net worth individuals over US$50 billion.
University of Texas Economics Professor James Galbraith is a son of the great US Institutional economist John Kenneth Galbraith, and a leading non-orthodox economist in his own right. He has developed highly innovative methods to measure economic inequality that are well documented here; he is a strident critic of conventional economics; and he has been as active in the USA as an analyst of and commentator on this financial crisis as I have in Australia. His many interviews on the topic are linked from this site.
Several people have commented on the speech by Glenn Stevens (for international readers, Stevens is the Governor of Australia’s central bank, the Reserve Bank of Australia) yesterday in which he commented, inter alia, that:
Ross Gittins finally comes aboard the debt-deflation train, with an article in today’s (December 8 2008) Sydney Morning Herald entitled “It’s not inflation that did us in, it’s the borrowing”. For non-Australian readers, Ross has been a regular economic commentator for Sydney’s leading newspaper for about forty years.