Steve Keen's Debtwatch

When this year’s bud­get was deliv­ered, Trea­sury fore­cast that the unem­ploy­ment pic­ture for the next few years was pos­i­tive:

Aus­trali­a’s medi­um-term prospects remain strong, with the econ­o­my expect­ed to grow at an above-trend rate over the next two years, unem­ploy­ment fore­cast to fall and the bud­get still on track to return to sur­plus in 2012–13.

While the high Aus­tralian dol­lar and lega­cy effects from the glob­al finan­cial cri­sis are weigh­ing par­tic­u­lar­ly heav­i­ly on some sec­tors, the over­all growth out­look is strong.

Sus­tained high prices for our min­er­al resources under­pin record invest­ment inten­tions in the min­ing sec­tor and strong fore­cast growth in com­mod­i­ty exports.

Pow­er­point file for this lec­ture: Debt­watch Sub­scribers; CfE­SI sub­scribers

This lec­ture con­cludes my 11 lec­ture course on behav­ioral eco­nom­ics & finance and endoge­nous mon­ey. In it I give an overview of the Depres­sion we are now in, and com­pare it to that of the 1930s. I also cov­er the fail­ure of neo­clas­si­cal econ­o­mists to see this cri­sis com­ing: the remark­able thing was not that I and a hand­ful of oth­ers saw this cri­sis com­ing, but that so many neo­clas­si­cal econ­o­mists had no idea it was approach­ing. I explain why they failed to see it (by ignor­ing pri­vate debt and believ­ing in a fan­ta­sy of eco­nom­ic equi­lib­ri­um), dis­cuss the empir­i­cal dimen­sions of this cri­sis in com­par­i­son with the Great Depres­sion, and present my explic­it­ly mon­e­tary macro­eco­nom­ic mod­el.

A read­er just alert­ed me to this hilar­i­ous spoof of Manki­w’s “Ten Prin­ci­ples of Eco­nom­ics” from ear­ly 2007:

I’d give Mankiw a hard­er time than this guy does–and the open­ing joke would need to be updat­ed (for the post-eco­nom­ic cri­sis world) that macro­econ­o­mists have pre­dict­ed 9 of the last 3 booms–but it’s still a very good laugh.

The come­di­an is Yoram Bau­man, The Standup Econ­o­mist. I might check his web­site out after this.

I’ve just been sent fur­ther details of my itin­er­ary while in Dublin:

I will be trav­el­ling for the next two and a half weeks, with the fol­low­ing activ­i­ties planned:

• Argenti­na, Novem­ber 7–9. Con­tact: Alber­to Muller; amulle AT infovia.com.ar.

1. Mon­day 7, meet­ing with econ­o­mists at the Uni­ver­si­ty of Buenos Aires; time and place to be deter­mined.
2. Tues­day 8, at 7 pm, a sem­i­nar on the inter­na­tion­al cri­sis with the Insti­tu­to Argenti­no para el Desar­rol­lo Económi­co (IADE), at the Cen­tro Cul­tur­al de la Coop­eración,  on Aveni­da Cor­ri­entes; with a non simul­ta­ne­ous trans­la­tion into Span­ish by Pro­fes­sor Michel Teubal.

Sev­er­al cor­re­spon­dents have just told me that some of Greg Manki­w’s stu­dents at Har­vard are stag­ing a walk­out from his first year class. They’ve writ­ten an open let­ter to Mankiw to explain why:

An Open Letter to Greg Mankiw

I applaud them for this move. Manki­w’s var­i­ous eco­nom­ics texts are among the most sim­plis­tic of the many neo­clas­si­cal text­books that parade this flawed par­a­digm as a flaw­less jew­el of human rea­son­ing. I’m delight­ed that his stu­dents have tak­en the rebel­lion against this par­a­digm to one of its key pro­mul­ga­tors.

The last two days have seen the lat­est month­ly data on cred­it growth in Aus­tralia from the RBA, and the lat­est quar­ter­ly data on house prices from the ABS. Togeth­er they con­firm trends that I’ve iden­ti­fied on numer­ous occa­sions between the accel­er­a­tion of mort­gage debt and the change in house prices (see Hand of Gov report on the Aus­tralian Hous­ing Bub­ble, A much more neb­u­lous con­cep­tion, The Chop­ping Block, Updat­ed Cred­it Accel­er­a­tors, House Prices and the Cred­it Impulse, This Time Had Bet­ter Be Dif­fer­ent: House Prices and the Banks Part 1 & Part 2).

In the first half of this lec­ture, I dis­cuss the econ­o­mists who influ­enced Minsky–Marx, Fish­er, Schum­peter and Keynes–as a pre­lude to out­lin­ing Min­sky’s Finan­cial Insta­bil­i­ty Hypoth­e­sis. (PPT File: Debt­watch Sub­scribers; CfE­SI Mem­bers).

In the lec­ture I inad­ver­tent­ly slan­dered Eugene McCarthy while explain­ing the McCarthy­ist “Com­mu­nist Witch Hunt” days in the USA to my stu­dents. It would have been career sui­cide for Min­sky to acknowl­edge that he had read Marx by cit­ing him in an aca­d­e­m­ic paper. I meant Joe McCarthy of course.

Hav­ing out­lined Min­sky’s Finan­cial Insta­bil­i­ty Hypoth­e­sis, I explain the math­e­mat­i­cal mod­el I devel­oped of it, on the foun­da­tion of Richard Good­win’s “Growth Cycle” mod­el of cap­i­tal­ism.  (PPT File: Debt­watch Sub­scribers; CfE­SI Mem­bers)

I’ve just had a great inter­view with a new Rus­sia Today show, Cap­i­tal Account. The pro­gram’s pro­mo is:

At the the inter­sec­tion of mar­kets, pol­i­tics and the glob­al econ­o­my is Cap­i­tal Account with Lau­ren Lyster. Broad­cast­ing live out of RT Amer­i­ca’s stu­dios in Wash­ing­ton DC, Cap­i­tal Account brings you in-depth analy­sis and dis­cus­sion of the most impor­tant finan­cial and eco­nom­ic news from a per­spec­tive you won’t find in the main­stream media.

From my expe­ri­ence in this inter­view, the pro­gram lives up to its pro­mo. For those of you with cable in the USA, Cap­i­tal Account airs week­days at 4:30pm (East­ern) on Rus­sia Today.