Steve Keen's Debtwatch

I had a cou­ple of impromp­tu inter­views with over­seas inter­net media groups this week–Dominic Fris­by inter­viewed me on my expec­ta­tions for 2011 on his “Fris­by’s Bulls and Bears” pro­gram, and Michael Surkan inter­viewed me for the inter­net radio/podcast progam The Opti­mistic Bear. I’ve excerpt­ed the intro­duc­tions from the two web­sites below; to hear the inter­views them­selves, click on the main links below.

The Frisby interview

In part VIII of our of shows look­ing at 2011, Dominic Fris­by talks to Aus­tralian econ­o­mist Steve Keen of Debtdeflation.com.

As not­ed in the last post, I’m rush­ing to get a sec­ond edi­tion of Debunk­ing Eco­nom­ics pub­lished this year, so I’m try­ing to fin­ish the man­u­script by the end of this month. As a result I’ll be cir­cum­spect on posts for the next few weeks, but there are a few I have to put up–including the ses­sions at the AEA.

My own ses­sion was orga­nized by Fred Mose­ley and (click on the names to down­load the papers) had David Colan­der, Paul David­son, myself and Ami­ta­va Dutt as speak­ers, with Ben­jamin Fried­man, Robert Gor­don and Kevin Hoover as dis­cus­sants.

My good mate Max Keis­er tracked me down in Den­ver last week, where I’d just attend­ed the 2011 Amer­i­can Eco­nom­ic Asso­ci­a­tion Annu­al Con­fer­ence. The inter­view starts 13 min­utes into the video embed­ded below, but as always Max and Sta­cy Her­bert are high­ly infor­ma­tive and enter­tain­ing in the pre­vi­ous 13 min­utes, so I do rec­om­mend watch­ing the entire pro­gram.

I’m cur­rent­ly work­ing on a sec­ond edi­tion of Debunk­ing Eco­nom­ics–which is why I’ve been mak­ing so few posts of late–but I will also short­ly post some video and audio from some of the ses­sions I attend­ed at the AEA.

I’ve just been alert­ed by Bank­ing Day (a sub­scriber-only ser­vice) that West­pac–via its sub­sidiary St George–is now allow­ing poten­tial bor­row­ers to treat their rental pay­ments as “evi­dence of gen­uine sav­ings” when apply­ing for a home loan.

This is of course por­trayed as  good thing in the press release that announced the development–issued by the bro­ker Loan Mar­ket (see the press release at the end of this post). It will, they state, enable Aus­tralians who cur­rent­ly can’t afford to buy a home–because they can’t save a deposit–to do so. All good news.

The RBA and most con­ven­tion­al mar­ket econ­o­mists see 2011 as the year in which our biggest chal­lenge will be “man­ag­ing pros­per­i­ty”. The min­ing boom will keep the mon­ey flow­ing, and the econ­o­my will just have to cope with the struc­tur­al change that results.

There’s no doubt that Chi­na’s demand for our min­er­als has gen­er­at­ed enor­mous rev­enue for the coun­try, by giv­ing us the best terms of trade in the last half cen­tu­ry, and turn­ing our trade bal­ance into sur­plus.

Tom Pal­ley has writ­ten an excel­lent opin­ion piece for the Finan­cial Times on why Oba­ma is fail­ing, and he request­ed that I repro­duce it here. How­ev­er, to read it, I’d pre­fer if you clicked on the link in the title of Tom’s piece below. That will take you to the Finan­cial Times blog itself–the more hits that pieces like this are seen to get in the con­ven­tion­al media, the bet­ter (to encour­age this, there are some links in the Finan­cial Times piece that I haven’t repro­duced in this repost).

If you have seen my sub­mis­sion to the Sen­ate inquiry into com­pe­ti­tion in the bank­ing sec­tor, you would know that I’m less than impressed by its premise–that what­ev­er the prob­lems are, they can be solved by a hefty dose of com­pe­ti­tion.

It seems I’m not the only cyn­ic. Three oth­er notable blog­gers

• http://www.housesandholes.blogspot.com/
• http://delusionaleconomics.blogspot.com/ and
• http://www.unconventionaleconomist.com/

have estab­lished a par­al­lel inquiry, which is offer­ing a $1,000 prize for the best sub­mis­sion.

They have estab­lished the fol­low­ing blog:

http://sonofwallis.blogspot.com/

And they note that they have estab­lished their “Son of Wal­lis” inquiry because of:

Inquiry into com­pe­ti­tion with­in the Aus­tralian bank­ing sec­tor

Sub­mis­sion by Asso­ciate Pro­fes­sor Steve Keen, School of Eco­nom­ics & Finance, Uni­ver­si­ty of West­ern Syd­ney; www.debtdeflation.com/blogs

The Aus­tralian Sen­ate’s Stand­ing Com­mit­tee on Eco­nom­ics has estab­lished an inquiry into com­pe­ti­tion in the bank­ing sec­tor, and I was invit­ed by the Com­mit­tee to make a sub­mis­sion. Click here for the PDF of my sub­mis­sion. The RBA’s sub­mis­sion is linked here. All sub­mis­sions to the inquiry are avail­able here.

You might be able to tell from the sub­ject that this is not my usu­al debt-ori­ent­ed post. Instead, it’s sheer frus­tra­tion with mal­func­tion­ing com­put­er tech­nol­o­gy. I don’t know whether the cause is the Dell Stu­dio 17 itself, or Win­dows 7, but I have just endured over a dozen “Blue Screen of Death” crash­es since about 1pm today (New York time–it’s cur­rent­ly 4pm), and this has tak­en the tal­ly of crash­es with this machine to well over a thou­sand since the first one occurred when I was mak­ing a live pre­sen­ta­tion to the U (short inter­rup­tion here–the bug­ger crashed twice in the last 5 min­utes and I am now edit­ing this in safe mode!) UNEP (Unit­ed Nations Envi­ron­ment Pro­gram), back in Sep­tem­ber of 2009.

I’ve giv­en sev­er­al talks on this gen­er­al top­ic recently–at the ASSA (Acad­e­my of Social Sci­ences of Aus­tralia) annu­al sym­po­sium “Fam­i­ly for­tunes in the after­math of the glob­al finan­cial cri­sis”, The Gold Sym­po­sium, the Aus­tralian Investors’ Asso­ci­a­tion “Bulls vs Bears” Sym­po­sium, and final­ly at the Local Future 2010 Con­fer­ence on Sus­tain­abil­i­ty: Ener­gy, Econ­o­my & Envi­ron­ment in Grand Rapids, Michi­gan.

I was giv­en one and a half hours to present at the Local Future event, which gave me the oppor­tu­ni­ty to present a com­pre­hen­sive treat­ment of the dynam­ics of cred­it mon­ey and the “Glob­al Finan­cial Cri­sis” (to use the Aus­tralian moniker for it) or “Great Reces­sion” (as econ­o­mists in the US refer to it). At the oth­er talks, I had to skip over sub­stan­tial parts of my argu­ment to fit with­in short­er time slots.