Steve Keen's Debtwatch

Recent eco­nom­ic data from both the UK and US should have tak­en the wind out of the sails of those in the Anglos­phere who – despite clear­ly con­tra­dic­to­ry evi­dence from main­land Europe – con­tin­ue to argue that fis­cal tight­en­ing is need­ed for eco­nom­ic growth is to recov­er.

The UK, which has fol­lowed a fis­cal aus­ter­i­ty path right from the elec­tion of the Con­ser­v­a­tive-Lib­er­al coali­tion gov­ern­ment in mid-2010, record­ed a 0.3 per cent fall in the last quar­ter of 2012, while the US record­ed a 0.1 per cent fall (main­ly on the back of declin­ing gov­ern­ment expen­di­ture). Get­ting the gov­ern­ment sec­tor out of the way and let­ting the pri­vate sec­tor rip clear­ly isn’t going accord­ing to script, even when you can’t blame Brus­sels for the pol­i­cy.

One of the beau­ties of the mod­ern age is that doc­u­ments that once would have been either inac­ces­si­ble, or tak­en years of sleuthing to locate, are now read­i­ly down­load­able from the Web. One such set of doc­u­ments is the tran­scripts of the meet­ings of the Fed­er­al Open Mar­ket Com­mit­tee (FOMC) in 2007, all of which have now been released.

Every­one who wants to under­stand why we’re now mired in a per­ma­nent eco­nom­ic slump should read these documents—not because it will explain the slump itself, but because it con­firms that those who were sup­posed to ensure that such calami­ties didn’t occur were clue­less about the approach­ing cri­sis. Jim Cramer famous­ly rant­ed pre­cise­ly the same mes­sage at the time, and copped a lot of flak about it, but he was dead right—and the tran­scripts prove it.

Last week, sev­er­al news­pa­pers ran a sto­ry in which the Labor Oppo­si­tion crit­i­cised the New South Wales Lib­er­al gov­ern­ment because the num­ber of first home buy­ers had plunged after the first home owner’s grant was end­ed for exist­ing homes. A pho­to of act­ing Oppo­si­tion leader Lin­da Bur­ney look­ing out stern­ly and sin­cere­ly accom­pa­nied the arti­cle, as she intoned in The Syd­ney Morn­ing Her­ald’s text that the Lib­er­als had aban­doned first home buy­ers:

“The act­ing Oppo­si­tion Leader, Lin­da Bur­ney, said this deci­sion and the axing of stamp duty exemp­tions for first home buy­ers of exist­ing homes from Decem­ber 31, 2011, meant the New South Wales gov­ern­ment had ‘aban­doned first home buy­ers’.

A friend just copied me the attached image. Apro­pos of cur­rent events. I can’t resist shar­ing it.

I am now in an indus­tri­al dis­pute with the Uni­ver­si­ty of West­ern Syd­ney over two mat­ters: a charge of “Seri­ous Mis­con­duct” which they lev­eled at me dur­ing the unsuc­cess­ful cam­paign to stop UWS abol­ish­ing our Eco­nom­ics degree; and their fail­ure to act on my appli­ca­tion for a Vol­un­tary Redun­dan­cy with­in the time required by UWS’s Enter­prise Agree­ment.

There will be a hear­ing at the Fair Work Com­mis­sion at 2.30pm at 80 William Street Syd­ney. I would be delight­ed to see read­ers of this blog there. This fea­ture by Michael Jan­da on the ABC’s The World Today gives a good overview of the dis­pute.

As a pub­lic fig­ure, I’m quite accus­tomed to see­ing my name and face in the media. But it was still quite a sur­prise to load The Syd­ney Morn­ing Her­ald’s site on Mon­day last week and see my crag­gy vis­age star­ing back at me from the front page:

The rea­son was Peter Martin’s arti­cle “A Keen eye on the glob­al econ­o­my: how our fore­cast­ers fared”, which report­ed the results of the Mel­bourne news­pa­per The Age’s annu­al sur­vey of eco­nom­ic fore­cast­ers.

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This arti­cle begins with a tweet from the US eco­nom­ic blog­ger Noah Smith, who posts at Noah­pin­ion:

Here we go, I thought – yet anoth­er main­stream attack on my non-main­stream eco­nom­ics. But why on earth would he see Min­sky – my sim­u­la­tion pro­gram for mod­el­ling the econ­o­my as a fun­da­men­tal­ly mon­e­tary sys­tem – as basi­cal­ly absurd? Because “DSGE mod­el­ling is so much bet­ter”, per­haps? Or because there are so many oth­er good sys­tem dynam­ics pro­grams already, why pro­duce anoth­er one?

In the last four decades, there have been only a hand­ful of cen­tral bank and Trea­sury papers that I thought gen­uine­ly added to human knowl­edge. The eco­nom­ic-ori­ent­ed depart­ments with­in gov­ern­ments have in gen­er­al been even more dom­i­nat­ed by neo­clas­si­cal ortho­doxy than aca­d­e­m­ic depart­ments – and for good, bureau­crat­ic rea­sons.

The usu­al sus­pects are talk­ing up the prospects for Aus­tralian prop­er­ty prices as the New Year approach­es, with per­mab­ull and Aus­tralian Prop­er­ty Mon­i­tors senior econ­o­mist Andrew Wil­son fore­cast­ing 3–5 per cent growth nation­al­ly, and BIS Shrap­nel man­ag­ing direc­tor Robert Mel­lor call­ing for between 2 and 8 per cent growth for Syd­ney.

Such calls range from just equal to, to well above, the expect­ed rate of con­sumer price infla­tion. So they’re a return to the usu­al prop­er­ty mantra that house prices always rise faster than con­sumer prices because of the “fun­da­men­tals” of (a) a ris­ing pop­u­la­tion and (b) tight sup­ply.

A mature age stu­dent who will com­mence doing a PhD with me in 2013 has need of work pri­or to com­menc­ing his degree.

He has a back­ground in finance, risk mea­sure­ment, and anti-mon­ey laun­der­ing. He has also worked as a secu­ri­ty guard, and traf­fic con­troller, and is will­ing to con­sid­er any oth­er tem­po­rary work.

Please con­tact me at debunking@gmail.com if you have or know of a posi­tion, whether full-time, part-time, tem­po­rary or per­ma­nent.