Steve Keen's Debtwatch

A wild fort­night of tur­bu­lence in the exot­ic world of finan­cial…

AUSTRLIAN/GLOBAL RELATED NEWS LINKS:

Sharp drop for econ­o­my, IMF warns (http://www.theage.com.au/business/sharp-drop-for-economy-imf-warns-20110920–1kjn6.html)

, The Age, 20 Sept

First and fore­most, the IMF has down­grad­ed GDP fore­casts, ‘warn­ing of a new glob­al reces­sion that would hit com­mod­i­ty prices and dri­ve mil­lions world­wide into unem­ploy­ment.’ Now sug­gest­ing growth to be “anaemic” in advance economies (1.6%). ‘How­ev­er, this assumes Euro­pean pol­i­cy­mak­ers con­tain the cri­sis in the euro area periph­ery, that US pol­i­cy­mak­ers strike a judi­cious bal­ance between sup­port for the econ­o­my and medi­um-term fis­cal con­sol­i­da­tion, and that volatil­i­ty in glob­al finan­cial mar­kets does not esca­late’ the fund said.

The Occu­py Wall Street cam­paign is now in its 17th day–making it eas­i­ly the longest polit­i­cal protest of the Glob­al Finan­cial Cri­sis. Unfor­tu­nate­ly, even I was­n’t aware of it when I was in New York two weeks ago, a few days after it start­ed, since it received very lit­tle cov­er­age from the media pri­or to the arrest of about 700 pro­test­ers on the Brook­lyn Bridge.

Now it’s entrenched, and grow­ing. What­ev­er its ulti­mate out­come, it is an impor­tant event in this cri­sis, as the first glim­mer of a pop­u­lar revolt against the Ponzi cul­ture of Wall Street.

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.