Steve Keen's Debtwatch

Swags for Home­less, the Aus­tralian entre­pre­neur­ial char­i­ty that has designed a bril­liant portable bed for home­less peo­ple, has entered a movie “Home” into the Focus Foward short film con­test.

The film is now a semi-final­ist, and your vote can help it get to the Sun­dance Fes­ti­val, and pos­si­bly even win the $100,000 prize. Swags would use the expo­sure and the prize mon­ey to estab­lish oper­a­tions in the USA–a coun­try that has a des­per­ate need to make the life of its many home­less less mis­er­able.

Out­go­ing Ohio Con­gress­man Den­nis Kucinich arranged for me to give a brief­ing at Con­gress today on the Fis­cal Cliff, and how the down­turn of 1937 could be a fore­taste of what will hap­pen if the Cliff comes to pass.

I argue that an attempt by the gov­ern­ment to reduce its debt now may trig­ger a renewed bout of delever­ag­ing by the pri­vate sector–and this is what appeared to hap­pen in 1937, when con­fi­dence that the worst of the Depres­sion was over led to the gov­ern­ment reduc­ing its deficit.

My pre­sen­ta­tion at the Rosa Lux­em­bourg Foun­da­tion in Berlin today on how Neo­clas­si­cal eco­nom­ics mis­un­der­stands the role of pri­vate debt in a cap­i­tal­ist econ­o­my. I show how to use my Min­sky pro­gram to mod­el both the Neo­clas­si­cal “Loan­able Funds” vision of lend­ing and the empir­i­cal­ly-informed Post Key­ne­sian “Endoge­nous Mon­ey” mod­el.

I’m also about to start a Kick­starter cam­paign to raise addi­tion­al funds to devel­op Min­sky. Please “watch this space” and be ready to help pro­mote this cam­paign and help fund it. Min­sky as it stands has been writ­ten by one pro­gram­mer in about 800 hours. I want to be able to hire 3 pro­gram­mers for a min­i­mum of 2 years to ful­ly devel­op the pro­gram.

I gave the talk below to the Cam­bridge Soci­ety for Eco­nom­ic Plu­ral­ism yes­ter­day. This stu­dent-formed soci­ety is attempt­ing to open eco­nom­ics to debate–something which, despite the enor­mous schisms that exist with­in eco­nom­ics, is in prac­tice sad­ly lack­ing.

Econ­o­mists of one school of thought (such as the Neo­clas­si­cal) don’t lis­ten to or debate with those from oth­ers (such as the Post Key­ne­sian or Austrian)-as you can see from Cochrane’s dis­mis­sive remarks about non-Neo­clas­si­cal eco­nom­ics in the Play­boy arti­cle on eco­nom­ics. Even with­in schools (such as the Neo­clas­si­cal), dif­fer­ent fac­tions bare­ly com­mu­ni­cate with each oth­er-as you can see by perus­ing some of the “Fresh­wa­ter, New Clas­si­cal” ver­sus “Salt­wa­ter, Old Hick­sian” (whoops, sor­ry, they think they’re “New Key­ne­sians”) blog entries.

This is the pre­sen­ta­tion I gave at the UN ESCAP meet­ing on the qual­i­ty of growth today in Bangkok.

The key theme is the need to make ener­gy the basis of the mod­el of pro­duc­tion, as argued by Bob Ayres and col­leagues.

The old­er I get, the more cyn­i­cal I become about gov­ern­ment inter­ven­tion in the econ­o­my.

That state­ment might appear to be either a recan­ta­tion of every­thing I’ve ever argued, or a sign of the usu­al tale of left-wingers mov­ing to the right, and right-wingers to the left, as life expe­ri­ence tem­pers youth­ful exu­ber­ance. It’s nei­ther (well, okay, maybe it’s a bit of the lat­ter), because my devel­op­ing posi­tion reflects the com­plex­i­ties of a mixed econ­o­my.

An IMF work­ing paper has received a lot of atten­tion recent­ly – and not for the usu­al rea­sons. Where­as the IMF is usu­al­ly crit­i­cised for being dog­mat­ic about free mar­ket eco­nom­ics and effec­tive­ly behold­en to the banks, this paper is being both praised and crit­i­cised for want­i­ng to rad­i­cal­ly reform them.

This clear­ly isn’t offi­cial IMF pol­i­cy, but the fact that it has been released by the IMF is note­wor­thy, and the paper deserves care­ful atten­tion. It is an enor­mous paper, not just in length (56 pages of text) but also in the range of top­ics cov­ered, and it will take at least three posts to do it jus­tice. In this one, I’ll focus on its analy­sis of today’s mon­e­tary sys­tem.

By Philip Soos

Recent­ly, Aus­tralian prop­er­ty ana­lyst Ter­ry Ryder, in an arti­cle on Prop­er­ty Observ­er, voiced com­plaints about hous­ing bub­ble advo­cates. His issue is “wait­ing for some­one who sub­scribes to the bub­ble the­o­ry to actu­al­ly define it. So far, nobody has. The term implies that some­thing has been over-inflat­ed and will burst.” Of course, Steve Keen has already done so in his volu­mi­nous and crit­i­cal work reach­ing back for over a decade.

If you were told the fol­low­ing graph showed two indi­ca­tors of Australia’s eco­nom­ic health, and one of them had to be addressed urgent­ly, which one would you expect politi­cians and econ­o­mists to try to bring under con­trol first?

If you picked the blue line, you’ve obvi­ous­ly not a politi­cian. The blue is the ratio of pri­vate debt to GDP in Aus­tralia; the red line is the ratio of gov­ern­ment debt to GDP (debt to the bank­ing sec­tor only; both series come from RBA table D02). The red line is the one that both sides of pol­i­tics in Can­ber­ra are obsessed about; the blue one they both ignore.

I’m not the only econ­o­mist cam­paign­ing to bring about a new, empir­i­cal, real­is­tic economics–far from it. In fact there is an asso­ci­a­tion ded­i­cat­ed to this end with over 10,000 sub­scribers: the World Eco­nom­ics Asso­ci­a­tion.

As is often the case, the for­ma­tion and man­age­ment of the WEA has rest­ed on the shoul­ders of one per­son: Edward Full­brook, the UK-based schol­ar who kept the PAECON move­ment alive after its birth with the French stu­dent “Protest Against Autis­tic Eco­nom­ics” revolt back in 2000. With­out his ener­gy and com­mit­ment, that spark lit by the French stu­dents might have petered out. Thanks to Ed’s efforts, the WEA is flour­ish­ing, and has almost as many mem­bers of the Amer­i­can Eco­nom­ic Asso­ci­a­tion. The WEA’s pur­pose is: