Google runs a regular seminar series on topical issues, which I spoke at last week. There was a substantial audience (see the quick scan of the audience below) and Google’s staff lived up to their hyper-intelligent and hyper-engaged reputation.
Steve Keen’s Debtwatch PodcastI gave a presentation that combined my standard talk on debt and Minsky, with some exposition of the Circuit and Minsky models, befitting of an audience to whom simulation is no big deal–unlike economics conferences where such approaches are still fringe activities.
The discussion was also extensive, and intertwined with the talk, so it went for a long time–almost two hours. Most of the first hour was my lecture:
Steve Keen’s Debtwatch PodcastAnd most of the second hour was an extensive discussion with Google staff that I had to call an end to because my voice was about to fail:
Steve Keen’s Debtwatch PodcastNext week I hope to post the recent presentation to UNEP of my work with the CSIRO, which will showcase both the dynamic multisectoral monetary model of production I have built, and the CSIRO’s multidimensional-database-driven biophysical model of the economy.
On another note, I have written a feature for the April issue of Dissent (Number 32, Autumn 2010), discussing the usual vexed issue of Australian house prices. As part of it I gave my perspective on why Australia has to date come through the GFC so well, and one aspect of that was being on the receiving end of largess from China’s stimulus.
I noted however that China’s largess may be coming to an end:
China’s stimulus included a lending frenzy that only China could have inspired, since while finance in The West is largely an independent force to which governments kowtow, China is still fundamentally a command society: the best guarantee against criticism when things go wrong is to be able to prove that you carried out instructions to the letter and beyond.
I well remember a tour of China I organized for Australian journalists in 1979, just after the fall of the Gang of Four. An anomalous pair of statistics had turned up just before the tour began: Chinese light industry output had risen 17%, but heavy industry had fallen by 7%: how could these two contradictory things happen, our party of largely economic journalists wondered?
We got our answer from a meeting with the Mayor of Shanghai and an official who title was the “Economic Boss” of Shanghai: the Central Committee of the Communist Party of China had issued a directive to “promote light industry”. So what did they do?
“We stripped heavy industry factories and turned them into light industry”.
In China, if a communist party official tells a bank to lend, it lends. Chinese lending rose 95% in 2009 over 2008 levels, boosting its money supply by over 27%. That has undoubtedly caused unintended consequences that the Chinese government may well now seek to reverse—and its recent decision to increase the reserve ratio is a sign that this reversal may already be in train. If so, our Chinese largess could dry up just as suddenly as it began.
And today we learn that China has instructed its banks to stop lending…
To read the rest of the article, buy Dissent when it comes out in April.
