Bnet Australia has just posted an interview with me by Phil Dobbie.
The interview is linked here, and I’ve also tried to post it to my podcast feed using a new WordPress plug in.
Can subscribers to the Debtwatch podcast please let me know whether this turns up in their iTunes, etc.? I don’t get any confirmation of whether the posting succeeds or not.
I’ve also embedded the talk here, so if you’d like to hear the interview ASAP, click below. The topics are the usual suspects: whether we’re going to experience a recession (no, it’ll be a Depression), why neoclassical economists and the RBA in particular got it wrong, and so on.
Permanent link to this post (115 words, estimated 28 secs reading time)
The last quarter’s GDP figures, showing that Australia’s GDP contracted by 0.5% in the last quarter, ended the “phony war” debate over whether we’re in recession. The previous quarter’s 0.1% was so close to zero that it’s semantics to question whether we’ve seen six months of negative growth or not: we are in a recession.
Now that we’ve had our Dunkirk moment, it’s time to consider what policy should be, given that avoiding a recession is no longer an option.
A first step there is seeing why we recovered from previous recessions, and asking whether we can pull off the same trick again this time.
April 25, 2009: A recession buster cut, thank you. Willliam McInnes, SMH
The hairdresser was closed. That’s why I ended up at the barber. The last time I went to a barber, the haircut was so bad the perpetrator refused to look me in the eye when I paid. When I got home my mother held her hand to her head and said, “Oh Jesus, what have you done?”…
- The Monster Mash; you gotta laugh, and this sendup of the whole financial crisis to the tune of the old Monster Mash song from the 50’s is a wonderful gem.
- In early March 2009, Jon Stewart at “Comedy Central” put together a masterful rip into the stock market spruikers on the CNBC network, exposing how their so-called expertise was little more than a blind exhortation to join in the euphoric excess of the bubble, and to keep it alive as it died an inevitable death.
It’s both informative and very amusing. Click here to watch it.
The decision of the RBA Board to leave the cash rate at 3.25% today confirmed that its members don’t understand the economy.
There was an inkling of this in the statement by Board member Warwick McKibbin early last month criticising the Rudd Government’s stimulus package (“Reserve bank director opposes package”, SMH February 6):
“A RESERVE Bank board member has expressed concern about the size of the Federal Government’s $42 billion fiscal stimulus package… Professor Warwick McKibbin also accused the Government of playing politics with the economic slowdown and warned that this could shatter fragile consumer and business confidence.
Niall Ferguson has just made the first call for widespread debt rescheduling that I have seen published in a major newspaper–today’s Australian, and I am sure it is reproduced in many newspapers around the world (if your local paper is owned by News Limited, there’s a good chance that you will find it there).
The article is linked here–The great repression–and some excerpts are shown below. Read it and refer your friends to it. Finally the call has gone out that what is needed to get out of this crisis is not more debt, but less.
My railing against the economics profession on this blog might give you the impression that I’m a lone wolf, taking on the economics profession single-handedly. I’m pleased to say that’s not the case; though the rebels are outnumbered by the True Believers in neoclassical economics, there are many academic economists who are critical of the economic orthodoxy.
Recently some highly regarded economists have made this emphatically clear with an eloquent and well argued document entitled “The Financial Crisis and the Systemic Failure of Academic Economics”.
Alex Mitchell is one of the political writers I’ve always enjoyed reading. Today he excels himself in The New Matilda, with a post on other journalists–specifically economic journalists–that really goes for the jugular.
Overall I think Anatole Kaletsky is on the more important track, to destroy the unjustified credibility of the academic neoclassical economists whose theories justified the nonsense that gave us this crisis, and whose inane theories “the bottom feeders” repackaged for popular consumption through the media (see Fabulous attack on neoclassical economics by Anatole Kaletsky for my commentary, and Economists are the forgotten guilty men for the original article). But those bottom feeders also deserve to be whacked over the head too, and Mitchell does this in great style.
Australia’s previous Liberal Party Prime Minister John Howard “came out swinging” last night in support of the policy agenda his government shared with the preceding Labor Party government of Bob Hawke and Paul Keating: “neoliberalism” (for non-Australian readers, the Australian Liberal Party is closer to the US Republican Party or the UK’s Tories than the US vision of the word “Liberal”, while the Australian Labor Party is akin to the US Democratic Party or the UK’s Labour Party).
In Five great reforms are an essential legacy, Howard defends “neoliberalism”, and argues that the financial crisis was actually the result of distortions to the financial system by well-meaning but ill-advised government tampering with the financial system:
As regular readers of this blog know, I argue that the dominant school of thought in economics, “Neoclassical economics”, is not only incapable of explaining this crisis, but actually helped contribute to it by its deluded analyses of finance and money.
I wrote Debunking Economics eight years ago to explain why Neoclassical economics was inherently flawed and should be abandoned. In that book I was merely collating the many compelling critiques that have been developed by economists of this theory over the years, that this school of thought has blithely ignored (I unexpectedly added one of my own, critiquing the theory of the firm, and also discussed flaws in conventional Marxian economics, but that’s by the bye here).
