There is an adage in pol­i­tics that you should nev­er put any­thing to the vote unless you are sure of the out­come before­hand. On that front, the ref­er­en­dum Greeks will vote in this Sun­day is a mis­take, because the vote could go either way. If the major­i­ty votes No, as Syriza hopes, then it—hopefully—will strength­en its hand in future nego­ti­a­tions with the Troi­ka. But if the major­i­ty votes Yes, then Syriza will have to capit­u­late to the Troi­ka and accept its unbend­ing pol­i­cy of aus­ter­i­ty.

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The most recent of the almost dai­ly “Greek Crises” has made one thing clear: the Troi­ka of the IMF, the EU and the ECB is out to break the gov­ern­ment of Greece. There is no oth­er way to inter­pret their refusal to accept the Greek’s lat­est pro­pos­al, which accept­ed huge gov­ern­ment sur­plus­es of 1% of GDP in 2015 and 2% in 2016, imposed VAT increas­es, and fur­ther cut pen­sions which are already below the pover­ty line for almost half of Greece’s pen­sion­ers. Instead, though the Greeks offered cuts effec­tive­ly worth €8 bil­lion, they want­ed dif­fer­ent cuts worth €11 bil­lion.

England’s Chan­cel­lor George Osborne took the Con­ser­v­a­tive Party’s claim to fis­cal respon­si­bil­i­ty one step high­er last week when he announced that they will enact a law which will require British gov­ern­ments to run sur­plus­es “in nor­mal times”:

“in nor­mal times, gov­ern­ments of the left as well as the right should run a bud­get sur­plus to bear down on debt and pre­pare for an uncer­tain future.” (“Man­sion House 2015: Speech by the Chan­cel­lor of the Exche­quer”)

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In a (for me!) brief pre­sen­ta­tion with 7 slides, I explain why ris­ing pri­vate debt nec­es­sar­i­ly caus­es increased inequal­i­ty, and leads to an eco­nom­ic cri­sis when the rate of growth of debt exceeds the rate of decline of wages as a share of nation­al income. Cru­cial­ly, the actu­al break­down is pre­ced­ed by an appar­ent peri­od of tranquility–a “Great Mod­er­a­tion”.

This was a short talk to a pub­lic audi­ence at ESCP Europe in Paris, which was pre­sent­ed in Eng­lish and also trans­lat­ed into French by Gael Giraud, Chief Econ­o­mist of the French Devel­op­ment Agency and the trans­la­tor of Debunk­ing Eco­nom­ics (so the sound­track is in both Eng­lish and French).

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.

My last post sup­port­ing the use of non­lin­ear mod­els (“You Do Need A Weath­er­man”) gen­er­at­ed some thought­ful respons­es, main­ly along the lines of this post by Ari Andri­copou­los enti­tled “A View on the Eco­nom­ic Mod­el Debate from a Non-econ­o­mist (but some­one who builds mod­els for a liv­ing)”. The basic argu­ment is that a full non­lin­ear mod­el of any sig­nif­i­cant eco­nom­ic process would be too com­pli­cat­ed, and that it was bet­ter there­fore to stick with tractable lin­ear mod­els, while keep­ing in mind that the real world is non­lin­ear:

I’ve just come back from the annu­al Insti­tute for New Eco­nom­ic Think­ing con­fer­ence in Paris, where the Pres­i­dent of INET Rob John­son is infa­mous for open­ing every ses­sion he chairs with an apt set of lyrics from the 1960s. I’ve aped Rob here by mis­quot­ing one of Bob Dylan’s great lines “You don’t need a weath­er­man to know which way the wind blows”. In fact, you do.

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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).

Ben Bernanke has recent­ly start­ed blog­ging (and tweet­ing), and his open­ing top­ics were why inter­est rates are so low around the world, and a cri­tique of Lar­ry Sum­mers’ “sec­u­lar stag­na­tion” expla­na­tion for this phe­nom­e­non, and for per­sis­tent low growth since the finan­cial cri­sis. Sum­mers then replied to Bernanke’s argu­ment, and a debate was on.

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The UK Chap­ter of the Inter­na­tion­al Sys­tem Dynam­ics Soci­ety invit­ed me to speak about my Min­sky soft­ware at its annu­al con­fer­ence on March 26. This is my talk, where I poked some fun at econ­o­mists and their igno­rance of sys­tem dynam­ics. The Pow­er­point file and Min­sky files used are down­load­able from here–see below the video.

Pow­er­point File

Use “right-click” and “Save as” to down­load these files, oth­er­wise your brows­er will fill up with XML code (since Min­sky saves in XML for­mat):

Min­sky Sim­plest Bank­ing File

Min­sky For­mat­ting File

Min­sky Loan­able Funds file