The US Sen­ate should not reap­point Ben Bernanke. As Oba­ma’s reac­tion to the loss of Ted Kennedy’s seat showed, real change in pol­i­cy only occurs after polit­i­cal scalps have been tak­en. An eco­nom­ic scalp of this scale might final­ly shake Amer­i­ca from the unsus­tain­able path that reck­less and feck­less Fed­er­al Reserve behav­ior set it on over 20 years ago.

Some may think this would be an unfair out­come for Bernanke. It is not. There are sol­id eco­nom­ic rea­sons why Bernanke should pay the ulti­mate polit­i­cal price.

A num­ber of read­ers have com­plained that the video of my talk at Google took up too much band­width, result­ing in “jerky” vision. Here are the same two files in a some­what low­er qual­i­ty compression–half the size of the orig­i­nal files.

| Open Play­er in New Win­dow

| Open Play­er in New Win­dow

As one view­er not­ed, it is also fea­si­ble to down­load the files to your PC and view there with­out band­width prob­lems dur­ing play­back.

Google runs a reg­u­lar sem­i­nar series on top­i­cal issues, which I spoke at last week. There was a sub­stan­tial audi­ence (see the quick scan of the audi­ence below) and Google’s staff lived up to their hyper-intel­li­gent and hyper-engaged rep­u­ta­tion.

| Open Play­er in New Win­dow

I gave a pre­sen­ta­tion that com­bined my stan­dard talk on debt and Min­sky, with some expo­si­tion of the Cir­cuit and Min­sky mod­els, befit­ting of an audi­ence to whom sim­u­la­tion is no big deal–unlike eco­nom­ics con­fer­ences where such approach­es are still fringe activ­i­ties.

The Real World Eco­nom­ics Review Blog–which is run by PAECON, the “Protest against Autis­tic ECONomics”–has just launched “The Igno­ble Prize for Eco­nom­ics”.

The intent is to select by pop­u­lar vote the “three econ­o­mists who con­tributed most to enabling the Glob­al Finan­cial Col­lapse (GFC)”.

Nom­i­na­tions are now open, and any­one can nom­i­nate up to three indi­vid­u­als by vis­it­ing this page and leav­ing a com­ment.

As it is cur­rent­ly stat­ed, the prize is open for posthu­mous award; this may change if there are sim­ply too many dead econ­o­mists who get a guernsey.

This is often treat­ed as a “how long is a piece of string?” ques­tion, but The Econ­o­mist has per­formed a great pub­lic ser­vice by allow­ing an easy com­par­i­son of the length of this piece of string across many coun­tries and over time.

Check it out your­self. For Aus­tralian read­ers, house prices today are almost 2.5 times what they were in real terms in 1986; and our price bub­ble (in CPI-deflat­ed terms) turns out to be small­er than some coun­tries (notably Bel­gium’s) but larg­er than the USA’s and UK’s.

Party like it’s New Year’s Eve 1930

I rec­om­mend that you fin­ish the year with a look at the News from 1930 blog, which is pro­vid­ing some “year in review” com­men­tary on 1930 now–including these details on the mar­ket highs and lows. Obvi­ous­ly some things were much worse in 1930 than today–notably indus­tri­al pro­duc­tion and the stock mar­ket:

Mar­ket highs and lows:

Dow indus­tri­al aver­age high of 294.07 Apr. 17; low 157.51 Dec. 16. Rail aver­age high of 157.94 Mar. 29; low 91.65 Dec. 16. Util­i­ty aver­age high of 108.62 Apr. 12; low 55.14 Dec. 16.

Last week­end’s Sun­day Tele­graph point­ed out a new record for Aus­tralia: our ratio of house­hold debt to GDP is now high­er than the USA’s. I’ve writ­ten the fol­low­ing com­men­tary on this dubi­ous “gold medal” (or is it real­ly lead?) for the ABC’s The Drum.

In all the self-con­grat­u­la­tions over how Aus­tralia has man­aged to side­step the GFC, an incon­ve­nient truth has been over­looked: the cri­sis was caused by too much debt, and Aus­tralian house­holds have had a stronger and longer love affair with debt than even the Amer­i­cans.

I was recent­ly inter­viewed by Eric Tave­nier for the web­site Engineer.net, which is an engi­neer recruit­ment and job search ser­vice in the USA.

Eric was tak­en with my advo­ca­cy of what I called “Engi­neer Cap­i­tal­ists” (in con­trast to the finan­cial spivs who dom­i­nate busi­ness today in the USA) in my inter­view on The Keis­er Report, and want­ed me to elab­o­rate for his audi­ence. The inter­views have been post­ed to YouTube (see below).

For Aus­tralian view­ers, there was an inter­est­ing report in today’s Sun­day Tele­graph on the lev­el of mort­gage debt in Aus­tralia, which now exceeds 100% of our GDP–higher than Amer­i­ca at 95.5%.

Mike Shed­lock (“Mish” as he is known to all) has writ­ten an excel­lent piece on the defla­tion-infla­tion debate, focus­ing on the Achilles Heel of the latter–the fact that it is based on the belief that we live in a “frac­tion­al reserve bank­ing” mon­e­tary sys­tem. He offered to let me cross-post here, and I’ve repro­duced it in its entire­ty below (there’s only one point I’m not sure on–the com­ment that there are no reserve require­ments for sav­ings accounts. From my read­ing of the foot­notes to Table 12 in this Fed­er­al Reserve paper, that’s true of cor­po­rate accounts but not indi­vid­ual ones).

Max Keis­er inter­viewed me for his 4th Keis­er Report when I was in Paris ear­li­er in Decem­ber. I come in at about the 13 minute mark after Max’s ban­ter with Sta­cy:

It was a great interview–Max had about ten ques­tions pre­pared, but only asked about 3 of them because the con­ver­sa­tion flowed so well.

We also record­ed a pro­gram on what 2010 may bring for mar­kets and economies for BBC Radio 5 Live Break­fast; the pro­gram will go to air on New Year’s Eve at 10PM Lon­don time.