Steve Keen's Debtwatch

This is a reminder that the sec­ond edi­tion of Debunk­ing Eco­nom­ics will be launched tomor­row at the Uni­ver­si­ty Col­lege Lon­don in the Gus­tav Turk lec­ture the­atre, from 6–8pm. The launch will include talks by myself and Ann Pet­ti­fors on the eco­nom­ic cri­sis and the state of eco­nom­ic the­o­ry.

Copies of the paper­back will be avail­able for pur­chase at the launch for £12. I will of course sign copies that are pur­chased at (or brought to) the event.

The The­atre is rel­a­tive­ly easy to find. Enter UCL by the Gow­er Street entrance, and then walk to the right hand cor­ner of the quad­ran­gle.

Satya­jit Das, the author of Traders, Guns, and Mon­ey, has just released a new book — Extreme Mon­ey: The Mas­ters of the Uni­verse and the Cult of Risk. Satya­jit is the gen­uine insid­er-turned-informer: some­one who actu­al­ly designed, under­stood and trad­ed the com­plex CDOs and so on that helped make the world econ­o­my what it is today. As a per­son with the intel­li­gence to know that what the finance sec­tor was ask­ing math­e­mat­i­cal­ly gift­ed indi­vid­u­als like him to design, and the ethics to find this appalling, he “jumped” ship long ago, and is now one of the best crit­ics of the finan­cial sec­tor alive today.

Not only did the glob­al finan­cial cri­sis catch the vast major­i­ty of econ­o­mists com­plete­ly unawares, they instead expect­ed tran­quil and even buoy­ant times just as the biggest eco­nom­ic cri­sis since the Great Depres­sion began. My favourite such obser­va­tion is from the OECD’s Eco­nom­ic Out­look for June 2007—in which the Chief Econ­o­mist sug­gest­ed that, “the cur­rent eco­nom­ic sit­u­a­tion is in many ways bet­ter than what we have expe­ri­enced in years … Our cen­tral fore­cast remains indeed quite benign.” But there are count­less oth­er such utter­ly wrong prog­nos­ti­ca­tions about the econ­o­my, from the pro­fes­sion that is sup­posed to be the font of wis­dom on the econ­o­my.

This is just a heads up to the 12,675 reg­is­tered users on this site that you are about to receive an email from me ask­ing for your res­i­den­tal address.

This is intend­ed just for the frac­tion of indi­vid­u­als who have reg­is­tered at or upgrad­ed to a mem­ber­ship lev­el that enti­tles them to an eBook or hard­copy ver­sion of the sec­ond edi­tion of Debunk­ing Eco­nom­ics, which will be launched and avail­able on Octo­ber 4th (in the UK–its avail­abil­i­ty in oth­er coun­tries depends on ship­ping times). How­ev­er there is no way for me to select just that sub­set for emails from with­in Word­Press (if any Word­Press guru knows oth­er­wise, please tell me how!), so all of you will receive the request (assum­ing that the plu­g­in works as adver­tised).

“Neat, Plausible, and Wrong: the deluded discipline of economics”

Blog mem­ber Robert Kahn has booked the River­side Suite for 5–8pm. The first hour will be meet and greet; I’ll give a talk with the above title from 6pm. After ques­tions and dis­cus­sion we’ll adjourn to some­where near­by for din­ner (sug­ges­tions welcome–somewhere that has low noise lev­els please since I have very bad hear­ing cour­tesy of a seri­ous case of tin­ni­tus).

Robert has forked out $500 to make the book­ing, so I’d appre­ci­ate atten­dees mak­ing dona­tions to him of about $20–25. With the expect­ed num­ber of atten­dees, that should spread the finan­cial pain even­ly.

I’ve done a demo­li­tion der­by on Neo­clas­si­cal eco­nom­ics in the pre­vi­ous 6 lec­tures; for the next 6, I’ll build a real­is­tic alter­na­tive. First stop is the impor­tance of the endo­gene­ity of mon­ey in utter­ly revis­ing macro­eco­nom­ic analy­sis. In the first half of this lec­ture, I out­line the basic propo­si­tions in endoge­nous mon­ey, and some of the dis­putes that have arisen in the very ear­ly days of this the­o­ry. By way of anal­o­gy, the state of endoge­nous mon­ey the­o­ry today would be a bit like the ear­ly days of the Coper­ni­can mod­el of the solar sys­tem: the fun­da­men­tal idea is cor­rect, but many of the argu­ments that peo­ple make about it reflect con­fu­sion about a new con­cept.

One year after the start of the great­est eco­nom­ic cri­sis since the Great Depres­sion, the edi­tor of the jour­nal Amer­i­can Eco­nom­ic Review: Macro­eco­nom­ics claimed that “the state of macro [the­o­ry] is good”. How could he be so delud­ed? Macro­eco­nom­ics has been dis­tort­ed by appalling schol­ar­ship and a mis­guid­ed belief that macro­eco­nom­ics and micro­eco­nom­ics should be con­sis­tent. The best crit­ics of this, iron­i­cal­ly, include the econ­o­mist most respon­si­ble for the state of macro­eco­nom­ics, John Hicks and the archi­tect of Neo­clas­si­cal growth the­o­ry, Robert Solow.

Pow­er­point Slides (for Debt­watch Sup­port­ers & Above) Part 1

Late last year, the research and bro­ker­age firm CLSA com­mis­sioned me to write a report on the Aus­tralian hous­ing mar­ket. CLSA was found­ed 25 years ago  by jour­nal­ists who were dis­sat­is­fied with the qual­i­ty of exist­ing jour­nal­ism in finance–which then, like today, was often more pub­lic rela­tions than inves­tiga­tive jour­nal­ism. The com­pa­ny ded­i­cat­ed itself to inde­pen­dent research, and that tra­di­tion has been main­tained through own­er­ship changes that now see it oper­at­ing as a sub­sidiary of Cred­it Lyon­nais SA.