Author Archives: Steve Keen

Ordi­nar­i­ly I’d sim­ply post a link to a media report in either my Gems or Brick­bats page. But this quote from Microsoft CEO Steve Ballmer shows that he real­ly under­stands what is going on now, in a way that no oth­er per­son in author­i­ty seems to have done as yet. The full report can be found at:

Microsoft resorts to first lay­offs, cut­ting 5,000

Ballmer’s per­cep­tive analy­sis of what is going on is:

I have just moved the blog to a new ISP after my pre­vi­ous provider IXWeb­host­ing proved to have intractable prob­lems with mal­ware.

The new host­ing is being pro­vid­ed pro bono by Cyanide Web Host­ing, which I great­ly appre­ci­ate.

Some posts may have been lost in the process, but that was prefer­able to putting up with a site that dis­trib­uted virus­es to all and sundry. So if you have made a post and it has­n’t turned up here, please re-sub­mit.

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.

A link to my site from anoth­er blog alert­ed me to anoth­er post, from the oppo­site end of the spec­trum, which is a cert for my “Brick­bats” page–both for its con­tent and its tim­ing. On Jan­u­ary 19, 2007, Ger­ard Bak­er of The Times edi­to­ri­alised that “His­to­ri­ans will mar­vel at the sta­bil­i­ty of our era”. An excerpt for you:

It had to hap­pen: neo­clas­si­cal econ­o­mists are now advis­ing that the antic­i­pat­ed reces­sion will be much milder if only work­ers would accept wage cuts.

When I saw this cri­sis was immi­nent in Decem­ber 2005, one major fac­tor that moti­vat­ed me to go pub­lic with my analy­sis was the cer­tain­ty that, when the cri­sis hit, neo­clas­si­cal econ­o­mists would either blame it on wages being too high (”the abo­li­tion of Work Choic­es caused the Depres­sion!”), or would sug­gest that wages should be cut to reduce the imbal­ance between the sup­ply of and demand for labour.

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.

Of course, that’s not the real world. As we know from the bit­ter expe­ri­ence of the finan­cial cri­sis that is this blog’s rai­son d’e­tre, finance char­ac­ter­is­ti­cal­ly desta­bilis­es an oth­er­wise healthy econ­o­my. Part of the rea­son for that is the exis­tence of Ponzi Financing–something that the recent Bernie Mad­off scan­dal has thrown into $50 bil­lion high relief.