Alan Kohler wrote at the time in Business Spectator that ‘flee’ was too strong a word for what was happening – housing lending was continuing to fall in both number and value terms, but investors were continuing to borrow strongly and prop up the market. However, he did suggest that a price plateau in housing looked likely.
Jim Stanford, the author of the popular Economics for Everyone (from which the cartoon to the left is taken), and I spoke at a double bill on the global debt crisis for the venerable Sydney institution “Politics in the Pub” last night.
We had a full house for an provocative evening on why the Dismal Science is neither necessarily Dismal, nor anything close to a Science, and why the debt crisis is still with us.
Revere Award for Economics for the 3 economists who warned the world
For Immediate Release
13 May 2010
Keen, Roubini and Baker win Revere Award for Economics
Steve Keen (University of Western Sydney), receiving more than twice as many votes as his nearest rival, has been judged the economist who first and most cogently warned the world of the coming Global Financial Crisis. He and 2nd and 3rd place finishers Nouriel Roubini (New York University) and Dean Baker (Center for Economic and Policy Research) have won the Revere Award for Economics. The award, sponsored by the Real World Economics Review Blog is named in honour of Paul Revere and his famous ride through the night to warn Americans of the approaching British army.
The Keen Walk to Kosciuszko was a fabulous experience—as Matt Carroll (one of the organizers) put it, it was “the best holiday ever”. That’s not to minimize the effort involved: covering 235 kilometres on foot in 8 days is no mean feat. But the combination of great company, personal success for all involved in an impressive physical challenge, lovely scenery, excellent weather, and a cause that united a remarkable group of people, made The Walk far more pleasure than pain.
As we head towards the federal election, the term ‘housing shortage’ will be trotted out again and again by politicians. Their rhetoric will rely on the deeply ingrained received wisdom that Australia has a ‘housing shortage’, and no politician will want to do the hard work of differentiating between a genuine shortage in housing stock (which we don’t have) and a shortage of ‘affordable housing’ which we do have.
And why won’t they acknowledge this distinction? Simply, because admitting that it is only the prices of houses that are dysfunctional, and not simply the supply, would be too much even for their loyal voters.
After Australian house prices rose 20 percent in one year, everyone’s talking a bubble. Channel Ten’s new(ish) avant-garde current affairs program asked for my perspective on the day the RBA yet again increased interest rates.
After leading in with the news and a feature on Neil Roberston, the 26-year-old Australian snooker player who won the World Championship, the story on house prices began 4 minutes and 5 seconds into the video below.
The news that the Rudd Government was rolling back its changes to Australia’s foreign investment rules on housing came as we were still on The Walk. Just prior to starting it, I received a note from Dr John Daffy, with the following letter from him to the PM attached. I asked John whether I could publish his letter on the blog, and he agreed.
Just as the absence of statistics on foreign purchasers means we’ll never really know the impact they had on the market, we’ll probably never know how many individuals like Dr Daffy sent similar letters to their MPs and the PM; but judging from the rapid backflip on that policy, there must have been plenty.
Edward Fullbrook, the editor of the Real World Economics Review that created the Dynamite Prize in Economics and the Revere Award, has just sent out the message reproduced below.
Voting for the Revere Award for Economics for the three economists who first and most clearly anticipated and gave public warning of the Global Financial Collapse and whose work is most likely to prevent another GFC in the future, will close in a few days. Please vote. So far the number of people voting has been disappointing. To stimulate interest, the poll has now been set to reveal to you the current results once you have cast your votes. You can vote for three. To view a timeline and to vote now, click here . It takes only seconds. By voting you reward the deserving.
On Thursday April 15th at 1pm, Steve Keen will begin a walk from Parliament House to Mt Kosciuszko, to fulfill the famous bet with Rory Robertson over house prices.
Keen claimed that, just as Japanese house prices had fallen 40% since its Bubble Economy burst in 1990, so too would Australian house prices. In October 2008, Robertson challenged him to a bet that this would never happen at a debate in the Parliamentary Library, where the loser would have to walk from Parliament House to Mt Kosciuszko.
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