Category Archives: Debtwatch

The Greek ref­er­en­dum has deliv­ered a stun­ning vic­to­ry for Syriza and its anti-aus­ter­i­ty mes­sage. Despite the banks being closed as a result of the ECB lim­it­ing its pro­vi­sion of ban­knotes, and despite a unit­ed cho­rus of Euro­pean lead­ers warn­ing of dire con­se­quences if the No vote suc­ceed­ed, the Greeks have vot­ed No in over­whelm­ing num­bers. The final result looks like­ly to be a 62% No to 38% Yes rejec­tion of the Troika’s terms. Syriza now has over­whelm­ing sup­port from the Greek peo­ple to oppose the Troi­ka (a result that opin­ion polls got com­plete­ly wrong).

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I was inter­viewed on the BBC News Chan­nel on Tues­day about the Greek cri­sis (see below) and I will be part of a CNBC pan­el “Squawk Box Spe­cial – Greece Decides” dis­cussing the ref­er­en­dum results live as they roll in, from 8.30–9pm Lon­don time on Sun­day.

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).

We are hir­ing two new staff at Kingston Uni­ver­si­ty: one per­ma­nent posi­tion at Asso­ciate Pro­fes­sor lev­el, and one short-term con­tract to cov­er an absent col­league.

If you’d like to work at one of the few plu­ral­ist-friend­ly eco­nom­ics depart­ments in the world, and you’re suit­ably qual­i­fied, please fol­low the links below for more details and to sub­mit your appli­ca­tion. Or if they don’t work–as a cor­re­spon­dent has told me–send an email to jobs@kingston.ac.uk ask­ing for details.

Asso­ciate Pro­fes­sor posi­tion

Short-term lec­tur­er posi­tion

The dead­line for appli­ca­tions is tight: they are due by June 26.

This is a talk I gave in Tel Aviv, Israel at the invi­ta­tion of the Rethink­ing Eco­nom­ics Stu­dent Forum there (which is a mem­ber of the Inter­na­tion­al Stu­dent Ini­tia­tive for Plu­ral­ism in Eco­nom­ics), and at the Pales­tine Eco­nom­ic Pol­i­cy Research Insti­tute in Ramal­lah, Pales­tine. I cov­er the defin­ing fea­tures of Neo­clas­si­cal Eco­nom­ics, con­trast these with Post Key­ne­sian Eco­nom­ics, and sim­u­late a debt defla­tion using the Open Source mod­el­ling pro­gram Min­sky.

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: