Steve Keen's Debtwatch

The great poly­math and human­i­tar­i­an Hugh Stret­ton died this week­end. I can do no bet­ter than to repro­duce anoth­er great Aus­tralian’s trib­ute to him.

The fol­low­ing is from Geoff Har­court.

Hugh died last Sat­ur­day at the age of 91 after a long ill­ness. I had known him since 1958 when I first came to Ade­laide where he was the much-admired Pro­fes­sor of His­to­ry. In lat­er years we became firm friends, though I con­tin­ued to regard him with awe and admi­ra­tion. He was a giant intel­lect, eas­i­ly Australia’s most deep and pro­gres­sive thinker, and a remark­ably kind and humane man who lived up to his ideals in many prac­ti­cal ways.

Rene­gade Inc., the media group that pro­duced the Four Horse­men doc­u­men­tary about the finan­cial cri­sis, is run­ning a Kick­starter Cam­paign to raise US$45,000 to under­write its next doc­u­men­tary.

Click here to go to Kick­starter and donate.

The Four Horse­men doc­u­men­tary has been an inde­pen­dent media suc­cess, with over three mil­lion views on YouTube. It has also shown at more than three hun­dred Q and A ses­sions in sev­en­teen coun­tries. Ross and Megan Ashcroft, the prin­ci­pals of Rene­gade Inc., want to pro­duce a doc­u­men­tary for the post-crisis–or rather per­ma­nent crisis–world in which we now live. They also plan to fol­low this up with an inde­pen­dent media plat­form, to give the pub­lic some­thing oth­er than the super­fi­cial pap that dom­i­nates the media cov­er­age of eco­nom­ics, pol­i­tics and cul­ture today.

This is the talk I gave at the FT/Alphaville con­fer­ence in Lon­don last week. A num­ber of peo­ple asked me to send the PPT to them, and I got buried in oth­er work and the emails are long lost in my Gmail queue. So if you’d like to down­load the pre­sen­ta­tion file, please click here. My apolo­gies to those cor­re­spon­dents to whom I haven’t replied direct­ly.

To run the Min­sky mod­el, down­load Min­sky from here and install it.

After yes­ter­day’s remark­able vic­to­ry in the Ref­er­en­dum, I was inter­viewed on the BBC News Chan­nel. Some­one has post­ed a record­ing from the BBC News Chan­nel stream on YouTube.

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).