Debunking Economics - the podcast

There’s a lot happening with China right now. First, they are extending their social and commercial controls, which is adding uncertainty to foreign investors looking to get involved with Chinese firms. Maybe the Communist Party likes it that way. There’s also the risk that a more cocooned China could play a stronger military role in the Asia Pacific region. Then there’s the ever-expanding debt – private and government. Hilliard MacBeth, a Debunking Economics listener asks whether private sector debt, in particular, will create a problem. Hosted on Acast. See acast.com/privacy for more information.

Following on from a fortnight ago, what happens as resources start to become scarce? We’re already seeing the short-term impact of supply chain disruption because of COVID, but what when this becomes more common, and we have to get used to the idea of not always getting what we want? Prof Steve Keen suggests that rationing of goods might be the only way forward, but Phil Dobbie asks whether a shift to a more localised service-oriented economy might cut our demand for resources, particularly if the prices become prohibitively expensive. Hosted on Acast. See acast.com/privacy for more information.

More students than ever are off to university next month because of the A level grade inflation, accentuated by teacher assessments replacing exam results because of COVID. How useful is it to society to have more and more people studying at university? Is it adding to the GDP of the country? In today’s podcast Steve Keen suggests that we are devaluing a university education, which helps nobody. He explains why. And Phil Dobbie suggests, for those who don’t reach university standards – or who simply don’t want to go – could another two years of A levels be the answer? Hosted on Acast. See acast.com/privacy for more information.

We’ve talked about the climate change crisis on the Debunking Economics podcast, but there’s a broader issue we all face, highlighted in the Club of Rome back in 1972. We are chewing up resources faster than they can be renewed or sourced. It’s not just oil, but iron ore for steel production and previous metals used in microprocessors. Simon Michaux, associate professor at the Geological Survey of Finland, joins Phil Dobbie and Steve Keen to talk through the scale of the issue and how it’s already impacting the economy. Hosted on Acast. See acast.com/privacy for more information.

Many governments have done an excellent job at propping up businesses during the pandemic. For example, paying companies to furlough workers will, in theory, enable those businesses to quickly bounce back, with a workforce ready to go. But what if the pandemic drags on for years to come? Already governments are talking about how they will claw back the massive increase in government spending. And, whilst large corporations might have the cash to survive, perhaps after a little restructuring, small businesses have the most to lose. They have also borrowed the most. So how does the global economy come back from this? Prof Steve Keen tells Phil Dobbie that it’s a shame this hasn’t been seen as an opportunity to embrace modern monetary theory. But it’s been shunned by governments and central banks who prefer the old way of doing things, which will be highly detrimental to all of us, but particularly those most in need. Hosted on Acast. See acast.com/privacy for more information.

Karl Marx never advocated violent revolution, but he did expect that the power balance between capitalists and workers would change. On today’s podcast Steve Keen tells Phil Dobbie that Marx wrongly expected that profits would ultimately shrink, so workers would be fighting for a slice of a shrinking pie. That’s not happened. Perhaps the main reason we’ve avoided a violent revolution is because the poor have become richer, just not as much as the very rich. It could be a different story soon though, if the pie starts shrinking. Hosted on Acast. See acast.com/privacy for more information.

Steve Keen has often said, the problem with economics in, it ignores thermodynamics. That’s not always been the case. Georgescu-Roegen, a Romanian economist, wrote The Entropy Law and the Economic Process in 1971, which embraced the orle of energy and waste in economics. But we’ve taken backward steps since then. This week Phil Dobbie asks Steve Keen to explain what thermodynamics is and why it is critical to the forward direction for economics. Without it, can we really save the planet? Hosted on Acast. See acast.com/privacy for more information.

Even the most ardent free marketeer accepts that there is some degree of subsidy needed to support low income earners or necessary industries that are not commercially viable. This has particularly been the case through the pandemic. But what’s the best way of applying these subsidies? If you pay directly to companies will you be inhibiting efficiencies and competition. If you pay directly to consumers how do you know they will spend the as you intended? Should governments be offering payments to individuals that can only be spent in a particular way? And how do you avoid political motivation behind the issuing of subsidies. This week the government published the UK Subsidy Control Bill, which sets out the rules that apply to local authorities and national governments, but not the UK government. To no media scrutiny whatsoever. Hosted on Acast. See acast.com/privacy for more information.

From day one economics students are taught that their discipline is all about the optimal allocation of resources. The concept of scarcity is at the very heart of how we are supposed to think. And yet, as Prof Steve Ken explains this week, that scarcity doesn’t really exist. There’s plenty of people available to do jobs, there’s masses of untapped energy potential from the sun. This challenges the idea of opportunity cost – why do A or B when you can do A and B? Ironically, the one recource which is scarce, the environment, is the one element that economics has traditionally blithely ignored. So, if its not to do with managing the allocation of scarce resources, what should be the real definition of economics? Phil Dobbie suggests one – perhaps you can do better. Hosted on Acast. See acast.com/privacy for more information.

Canada and the west coast of the US have been hit with extreme heat the last week. The town of Lytton in British Columbia reached 49.5C, the result of a heat dome caused by static high-pressure. It’s another reminder that the world has to act on climate change. This week the ECB’s Christine Lagarde talked about how the EU needs to see around €330 billion every year by 2030 to achieve Europe's climate and energy target. Couldn’t they just issue this as bonds, in the same way they have with the Pandemic Emergency Purchase Programme? And what about Rishi Sunak’s plan in the UK to issue green bonds for regular households to invest in? Will either of these proposals create new money, or simply redirect spending away from other non-green initiatives. Be prepared for another discussion between Phil Dobbie and Steve Keen on when money is actually created and whether some of the proposals could actually destroy money, hindering our efforts to tackle climate change. Hosted on Acast. See acast.com/privacy for more information.

Businesses and politicians have worked tirelessly to reduce the power of workers and dissemble unions. Of course, nobody was better at it than Margaret Thatcher. But has she, and all those did their damnedest to reduce the power of unions, actually done the country a disservice? Do economies function better with strong unions? Are they the necessary counter to a system that allows companies and financiers to push wages down to the lowest possible level leading to slow economic growth? Questions Phil Dobbie puts to Steve Keen in this week’s Debunking Economics podcast. Hosted on Acast. See acast.com/privacy for more information.

Boris Johnson has enjoyed photo opportunities this week with Australian Prime Minister Scott Morrison with the announcement of an ‘in-principle’ free trade agreement between the two countries. It’s the first new one for the UK outside those that already existed through the EU. Great news for biscuit eaters, because Tim Tams are so much better than Penguins. But it’s seen as bad news by UK farmers who adhere to standards that don’t exist in the UK. Like hormone fed beef. So, is it a bad deal? And what about the idea for free trade generally. The argument since Ricardo’s day was that for agricultural it removes the constraint of land and, therefore, the law of diminishing marginal return. That should make goods cheaper, even those made here. Is the theory right? Hosted on Acast. See acast.com/privacy for more information.

The world is fixated with the present. We want to earn money quickly and spend it quickly. CEOs don’t care about much beyond their stock options, politicians only work to getting re-elected, consumers want instant gratification. It’s no wonder then that we’re not prepared to make compromises for long term consequences, like climate change, because the economic system we use has no way of managing our investment in the future. Is there a better way of managing the economy, in a way that ensures we look after the planet and provides for you in your old age? Hosted on Acast. See acast.com/privacy for more information.

Today on the podcast Phil Dobbie talks to Steve Keen about the value of things. Supposedly, price is a substitute for value, meaning if someone is prepared to pay more for something then they must value it more. But as they discuss, that only applies if everyone has the same amount of money. A poor household will place greater value, as a proportion of their wealth, on heating their home. A rich household will see extra use of that same resources as a discretionary item that they place little value on, particularly relative to their income. So, is the concept of value another broken element of a modern capitalist economy, and is there a way to allocate resources more effectively? We know, from the Soviet experience, that getting the state to do it creates even worse results. Hosted on Acast. See acast.com/privacy for more information.

US inflation is now running at 4.2% on an annual basis, and producer prices the world over have been rising as input costs for product creep up. How much of this will be passed on to the consumer as companies struggle to absorb these costs – and what impact will these higher prices have on demand? Central banks are all toeing the same line, that rising inflation is only transitory, driven by supply chain disruption, so there’s n o need for them to respond by pushing up interest rates anytime soon. But will prices bounce back? In this week’s podcast Prof Steve Keen tells Phil Dobbie that the bigger concern, post-COVID, is going to be deflation. Listen in to find out why. Hosted on Acast. See acast.com/privacy for more information.

This pandemic has been massive amounts spent by governments, and a chunk of that government debt is being bought by central banks. But with central banks buying up government bonds, whilst maintaining low interest rates, who is really benefiting? The answer, of course, is the wealthy. This week Steve Keen explains why the current situation is widening inequality, with the central banks at the front and centre of tis change. But government policy is helping too, in the wrong direction. So, is there any way out of this. Or has COVID-19 simply amplified a trend that was already upon us? Hosted on Acast. See acast.com/privacy for more information.

There seems to be an assumption by many that the crisis we have experienced will quickly bounce back. Output will resume, demand will return, everyone will be back in work and the economy will rapidly expand back to where it was before COVID. Central banks appoint to supply chain disruption in the short term that might create transit inflation, but that’s the only obstacle to the road to recovery. Except, it’s not really working that way. There are forecasts for massive growth this year, but there’s not a lot of data to support these predictions. The US jobs recovery, for example, that was expected to see one million new jobs a month, has slowed right down. And yet the IMF expects the economy to grow by 6.4 percent this year, even though more than eight million Americans who had a job before the pandemic are still looking for work. So, what’s the best approach out of the crisis? What should Treasurers and policy makers the world over be focused on. A question Phil Dobbie puts to Steve Keen in this latest Debunking Economics podcast. Hosted on Acast. See acast.com/privacy for more information.

There’s one clear difference between this recession and almost all those that have gone before. This time there was a pandemic involved, which hit demand and supply equally. So are there any similarities between this global recession and those that have gone before. Phil Dobbie puts the question to Steve Keen in this latest Debunking Economics podcast. Hosted on Acast. See acast.com/privacy for more information.

40 world leaders go together virtually this week, for a bit of an impromptu climate summit called by Joe Biden, before the next big climate conference (COP26) in Glasgow in November. In this edition of the Debunking Economics podcast, Phil Dobbie asks Steve Keen whether Bill Gatesd has the right approach. He advocates removing the green premium. His argument is, we don’t choose zero carbon emissions products because they are more expensive. If you remove this premium, then everyone will buy zero emission products and the problem will go away. Too simplistic? Hosted on Acast. See acast.com/privacy for more information.

Janet Yellen has repeatedly called for countries to raise their corporate taxes, so they are in-line with the increases she has planned for the US. There’s also been a call for companies to be taxed where they earn their revenue, rather than declaring profits in countries where tax is lowest. Her reasoning is transparent, of course. She wants to raise corporate taxes in the US and doesn’t want countries to move overseas, or shift their profits out of America. Is it a good idea? Prof Steve Keen likes the idea of a coordinated approach to tax, but can’t see it happening in reality. And can you do it for corporate tax without considering other measures? Like income tax, for example. And the moment you look at a coordinated fiscal approach to that extent aren’t you are stepping dangerously close to world government? Hosted on Acast. See acast.com/privacy for more information.

You might have thought that digital currencies were the domain of cryptocurrency evangelists, and were largely stores of wealth rather than money used for transactions. Now, it seems, central banks everywhere are investigating digital currencies as part of their modus operandi. Most money in central banks is digital, of course, so when they discuss digital money what exactly are they talking about? This week Phil Dobbier talks to Prof Steve Keen about why central banks are looking more closely at digital currencies, some of it good, some of it a little more sinister. Hosted on Acast. See acast.com/privacy for more information.

Last week we looked at how economics text books that taught us the law of demand, and how fundamentally flawed it was. Today, equally as useless, the law of supply, with the supply curve representing the marginal cost of producing goods. Steve explains how its is flawed because of the assumption that as you produce more of something the cost of production rises. Phil asks, how does that relate to the idea of economies of scale? Is conventional economic theory arguing against itself? Hosted on Acast. See acast.com/privacy for more information.

Steve Keen believes the way we look at economics is wrong from the ground up. Take the demand curve, for example. It shows how, when prices fall demand goes up, and vice versa. Whilst it works at an individual level, but attempts by theoreticians to demonstrate that this works at the aggregate level have all failed. In this episode we look at the Sonnerschein-Mantel-Debreu theorem, which looks at how price changes of one good will impact your consumption of that good and all others. The big failing, says Steve, is that they ignore the relationship between workers, capitalist and bankers. In this podcast we explain how the income distribution effect makes the demand curve much more complicated than the neoclassical economists would let on., to the point where the theory at its simplest level is worthless. Hosted on Acast. See acast.com/privacy for more information.

Post Brexit we were promised a global Britain. It’s got off to a bad start with a massive fall in exports to the EU in the first month of this new utopia. Meanwhile, there seems to be a lot of talk about Britain accepting inward investment, in particular encouraging foreign firms to list on the London stock exchange. This week Phil Dobbie discusses the various types of foreign trade, from inward to outward FDIs, corporate takeovers and UK share listings by foreign firms. Will any of these benefit the UK, and does the government actually have a plan?  Hosted on Acast. See acast.com/privacy for more information.

The UK chose to respond to a global pandemic by reducing the amount of money given in foreign aid. Yet COVID-19 is attacking every country in the world. So is climate change. And there will be other viruses to come. For example, Ebola is reported to be out of control in West Africa right now. It is not as infectious as COVID-19, but its fatality rate is way higher (maybe as much as 50 percent). So, how does the west protect the developing world, and itself, through mass vaccinations. Can it fund the vaccines with money it creates. Could we adopt an approach where the pound, the dollar and the Euro fund local production facilities in developing nations, just as the Chinese Yuan is funding belt and road initiatives in many countries. Never before has there been a need for such global cooperation, but how do we fund it? Hosted on Acast. See acast.com/privacy for more information.

The UK won’t see an end to lockdown measures until July, but after that the hope of many is that the economy will bounce back quickly. The Bank of England governor has called it a coiled spring. Many are comparing it to the roaring twenties. Part of the reason for this optimism is the argument that many people in the country have saved money during the lockdown, because they haven’t been able to spend on shopping or on overseas holidays. The household savings ratio increased significantly last year. But the figures are misleading, says Prof Steve Keen, on this week’s Debunking Economics podcast. National account figures ignore the servicing of debt, so the gap between income and consumption appears greater than it is in reality. If there was an increase in household savings you’d expect a decrease in the amount of household debt – but that’s not happening, says Steve. There’s a danger that the UK government will assume a rapid recovery, and pull back on stimulus measures that we’ll discover are needed further down the track. All because they ignored the impact of debt. Hosted on Acast. See acast.com/privacy for more information.

Australians can no longer turn to Facebook for news. From today they have banned Aussies from posting links to news sites on their platform, or for Facebook users anywhere linking to Australian news content. Australian treasurer Josh Frydenberg says these actions demonstrate that the big social media players wield too much power and control. Facebook has taken this stance because they don’t believe they should have to pay whenever anyone on Facebook chooses to link to an Australian news site. Who can blame them? So howshould new content be funded, and should we be concerned about the power of the major internet players? Phil Dobbie and Steve Keen don’t exactly see eye to eye on this. Hosted on Acast. See acast.com/privacy for more information.

In 2019 Greta Thunberg spoke to politicians at the UN Climate Week, saying they were promoting fairy tales of eternal economic growth. The next year we saw GDP in advanced economies fall by around five percent. Was this a win for the green movement? James Strain, a Debunking Economics Podcast listener, suggested we talked about the need for de-growth. He said, “It seems to me that this is imperative to our transition to a more sustainable society, but it breaks so many long-held fundamentals in mainstream economics that it's hard to see how we would begin to make the transition.” Most attempts to transition to a green economy have been fairly piecemeal, and don’t acknowledge the need for a move to less consumption. There is an answer, though. Steve Keen wasn’t a supporter of carbon trading at the business level, but he reminds Phil Dobbie of his suggestion that countries allocated carbon points to individuals. If you wanted to use more then you’d have to buy points from somebody else. They discuss how it could work in practice. Hosted on Acast. See acast.com/privacy for more information.

There was a bit of argy-bargy on the share markets in America last week, when a bunch of day traders set to take on Wall Street, particularly the hedge funds who were shorting stock on Gamestop, amongst others. Were the day traders the bad guys in this scenario? Did the retail traders know what they were getting themselves in for? In this episode Prof Steve Keen suggests maybe the Robin Hood retail platform should be considered the bad guys. A step in the direction would be to reduce speculation in the market not drawing more people into it, he says on this week’s podcast, not to mention the waste of brainpower that has been exerted on this while exercise! Hosted on Acast. See acast.com/privacy for more information.

Remember a time when central banks pretended to be independent, insulated from day-to-day politics? That had all but disappeared before COVID, but the pandemic was the final nail in the coffin of central bank independence. Instead, they have been colluding with governments to provide the mechanism to issue more public sector debt. Monetarism can’t resolve this crisis, so central banks’ usual tools are worthless. This week Phil Dobbie asks Prof Steve Keen whether this new arrangement, where the central banks and the treasury collude, is here to stay? If the government can use money creation to develop policies to build jobs and control inflation, what’s left for the central banks?   Hosted on Acast. See acast.com/privacy for more information.

Last weekend, Lord Sumption, was talking about why a lockdown harms everyone when the virus mainly ills people who are old or who have with debilitating conditions. He suggested we shouldn’t have lockdowns, because the lives lost were of less value than the rest of us. He isn’t the first to suggest that some lives are worth more than others. In fact, he argues we place a value on human life to determine the extent of healthcare intervention. It’s called the Value of Prevented Fatality (VPF). This week on the Debunking Economics podcast Phil Dobbie asks Prof Steve Keen whether we should consider the value of life in segments of society when developing policy on the pandemic. Some would see pensioners as a cost to society and, if you were being totally heartless, less of them would be a benefit to the economy. We look at just how flawed that thinking is. Hosted on Acast. See acast.com/privacy for more information.

One big problem as we emerge out of the COVID crisis is, even if we have money we’ll be reluctant to spend it. So, how can the government get us to step up our spending? The answer, perhaps, lies in Austria in the 1930s, when the Mayor of Wörgl issued his town’s own currency, with built in demurrage. Could a new, parallel currency be the way to increase the velocity of money and help the economy bounce back. Could it also be the first big step towards a universal basic income? Prof Steve Keen talks through the benefits with Phil Dobbie. Hosted on Acast. See acast.com/privacy for more information.

If you follow the science of Cliodynamics, the events unfolded in the United States the last few years have been entirely predictable. This week Prof Steve Keen talks to Phil Dobbie about the work of Peter Turchin, who has built mathematical models to track changes in society based on economic, demographic and political changes. How much can it tell us about the rise in populism that brought Donald Trump to power? Can it tell us want happens next? Hosted on Acast. See acast.com/privacy for more information.

Earlier this year Phil Dobbie asked Steve keen for his predictions for 2020. Without a whiff of COVID-19 IN THE AIR, Steve talked of a capitalist economy on government life support. On that he was pretty much on the mark. So what of 2021. In this free edition of the Debunking Economics podcast he explains the reasoning behind his five predictions for the year ahead:1. Recession in Europe and America as financial aftermath to the COVID crisis.2. The housing bubble to continue in Australia., but maybe not in Canada.3. Strong growth in China.4. A rapid fall in coal mining5. Severe weather crises in Europe and USA from collapse of Arctic winter sea icePhil tries hard to accentuate the positive in Steve’s predictions, but fails miserably. It’s all doom and gloom! Hosted on Acast. See acast.com/privacy for more information.

As the US government argues over whether to spend almost another $1 trillion to stimulate an economy ravaged by COVID-19, and the UK government likely to increase public sector borrowing by GBP215 billion this year, plus central banks lowering interest rates to often below zero, is there a chance our response to COVID-19 has been over the top? Some argue that the response, when the economy finally recovers, will be highly inflationary. Whilst others, Steve Keen included, believe deflation is going to be the issue, and it’ll be a long time before we see inflation rising. Phil Dobbie asks whether we’ll see governments use these inflation fears as an argument to curtail spending in 2021, even though the virus is still spreading and the job is far from done. And Merry Christmas to all our listeners. More next week! Hosted on Acast. See acast.com/privacy for more information.

Would the UK be better off with tariffed trade with Europe? The public discourse seems to be focused on how to remove tariffs, but Prof Steve Keen argues that if they are sufficiently high they will encourage domestic production across a variety of industry sectors. The more complex the mix of industries the more self sufficient an economy becomes, which also increases the potential for developing a broader range of exports. The only limitation is scale – but with 65 million people, is Britain big enough to go it alone? Phil Dobbie points to countries with high GDP that have a hefty reliance on foreign trade. Hosted on Acast. See acast.com/privacy for more information.

The UK has cut its foreign aid budget to help pay for the domestic costs of COVId-19. Is that a bit of a callous move? That’s a rhetorical question, but there’s a more meaningful question on today’s podcast – is there a better way of managing foreign aid. Steve Keen has worked with agencies dealing with foreign aid, and discusses the failings of the process with Phil Dobbie. Corruption is one issue with the recipient nations, whilst the donor countries often choose destinations that look after their own vested interests. But John Maynard Keynes had an idea that would have made foreign aid more of an automatic process. It’s just America won’t like it very much. Hosted on Acast. See acast.com/privacy for more information.

Steve Keen and Michael Hudson have both been arguing for a debt jubilee for some time. Now, as COVID-19 hits the poorest hardest, and leaves those with money better off than before, is this the right time to write off debt? Can the economy recover without it? After all, its stagnated since the 2008 global financial crisis. If you were to have a debt jubilee, how would you do it. Steve and Michael have different ideas about how it should be implemented. They explain their thinking to Phil Dobbie on this week’s edition of the Debunking Economics podcast. Hosted on Acast. See acast.com/privacy for more information.

It’s a first for the Debunking Economics podcast, but we think it’s not a bad idea – a bunch of listener questions to make sure we are all on the same page. Suneil Basu wrote to ask if we could cover off the differences between Keynesian and Post-Keynesian economics, and the different approaches of the Chicago and Austrian Schools. Also, how did neo-classical economists claim the centre ground? Listen in for Steve’s answers. Also a couple of questions on the EU versus the WTO, and whether Russia had a hand in the Brexit result. SAs we say on the podcast, it’s a grab-bag of questions – but that keeps it interesting (we hope). Hosted on Acast. See acast.com/privacy for more information.

The world economy has undergone massive transformation with COVID-19. There will be an even bigger upheaval as climate change takes hold. How do we prepare for the economic changes it will bring about. The way of coping with the virus emergency has been unprecedented levels of government intervention. Does that mean the only way to transition to a greener economy is through public funding, or can the private sector carry the can? And who manages the transition? Eric Rosengren from the Boston Fed admitted to the FT earlier this year that they don’t have the tools to “stop firms and households” from taking on “excessive leverage”, yet it’s the Fed policy that has created the problem. Phil Dobbie asks Steve Keen whether rising asset prices are a bad thing or not, and if its seen as a problem, what can be done about it? Hosted on Acast. See acast.com/privacy for more information.

The world economy has undergone massive transformation with COVID-19. There will be an even bigger upheaval as climate change takes hold. How do we prepare for the economic changes it will bring about. The way of coping with the virus emergency has been unprecedented levels of government intervention. Does that mean the only way to transition to a greener economy is through public funding, or can the private sector carry the can? And who manages the transition? Phil Dobbie talks to Prof Steve Keen. Hosted on Acast. See acast.com/privacy for more information.

Despite intensive talks Michel Barnier says there are still clear divisions between the EU and the UK over an agreement post-Brexit, which is less than two months away. This week Prof Steve Keen, a Brexit supporter, says the whole affair should be put on hold whilst the world copes with COVID-19. Phil Dobbie asks whether a deal will ever be reached anyway? Did the UK really think it would secure a tariff-free relationship if it didn’t adhere to rules on government subsidies. Rules that are surely being broken right now as cash handouts are rife to protect businesses that face closure because of the virus. And every free trade agreement always has a clause about opening up public procurement, the terms of which are complicated. Do we rally expect all this to be resolved by the end of next month? Hosted on Acast. See acast.com/privacy for more information.

Governments spent up big at the start of the COVID crisis, but they are being a bit more canny with their money right now. Meanwhile, central banks are seeing the need to step in, with monetary policy being used to fill the gaps where fiscal stimulus isn’t forthcoming. But are they kidding themselves? Can the economic consequences of a pandemic really be filled by a central bank dropping interest rates and buying back a large number of government bonds? In short, the answer is no. In this week’s Debunking Economics podcast Prof Steve Keen discusses the limitations of monetary policy measures with Phil Dobbie. Plus, why QE isn’t creating money, its just moving it around a bit, to those people who need it the least. Hosted on Acast. See acast.com/privacy for more information.

There’s a commonly held misconception that the Bank of England is creating extra money and pumping it into circulation through quantitative easing. In this week’s podcast Prof Steve Keen explains how QE amounts to nothing more than an asset swap – so no new money is created. The only way money can be created is through commercial banks issuing loans – something they are not doing much of – or governments running a deficit. Even the IMF is now suggesting that advanced economies should not be worried about public debt. Talking to Phil Dobbie, Steve explains the limited impact of QE and the need for something like the Bradbury Pound, when the government issued currency – interest free and deb free - without any involvement of private banks.  Hosted on Acast. See acast.com/privacy for more information.

Wealth in UK is very concentrated I the southeast of England. In other countries, the structure of administration and banking has seen a more diversified economy. So what could change to make income and productivity more equable throughout the UK. In this week’s Debunking Economics podcast Phil Dobbie talks to Prof Steve Keen about the devolution of Scotland, the role of local administrations, Germany’s regionalised public banking system and the role of local currencies, including the Worgl experiment in Austria during the great depression. With more people experiencing the benefits of working from home could this be the first step in a more decentralised UK economy. Hosted on Acast. See acast.com/privacy for more information.

Politicians, the media and most economists are obsessed with government debt – now more so than ever. But, as Modern Monetary Theory has shown, there is no issue with governments perpetually running budgets in the red, providing the extra money supply resulting from it is not inflationary. This week Phil Dobbie suggests some of the debt issued in the form of bonds could be given to the public as a form of universal income, which increases when government debt is highest – when the economy is in most trouble. So, what does Steve Keen think of this approach – and are there any downsides to the introduction of People’s Bonds? Hosted on Acast. See acast.com/privacy for more information.

Would a job guarantee resolve the battle between inflation and unemployment? Conventional economists argue that when the labour market is tight – and there are few jobs to go around – people ask for more money and that creates inflation. When there are very few jobs – like now – inflation is much lower. The counter argument, from Modern Monetary Theorists, is that a job guarantee would reduce this flux, whilst improving the lifestyles and wellbeing of the population. This week Phil Dobbie asks Steve Keen whether the MMT have got the logic right and, even if they have, can it be practically applied? Hosted on Acast. See acast.com/privacy for more information.

The US Federal reserve this week indicated that interest rates will remain close to zero through till 2023, at the earliest. Why because inflation is subdued and they don’t expect it to pick up until employment returns to normal. But what’s normal? Central banks work on the principle of NAIRU - the nonaccelerating inflation rate of unemployment – but they never seem to be able top in down exactly what that rate is. Before the pandemic US unemployment was down to 3.5 percent, with no sign of inflation lifting. Phil Dobbie asks Prof Steve Keen whether the idea of a fixed NAIRU rate just plain wrong? Hosted on Acast. See acast.com/privacy for more information.

There are the deniers who will argue that mankind has no influence on climate, but worse yet, there are economists who argue the impact will be so small the cost of trying to prevent it will be far greater than the consequences of living with it. That’s the line taken by joint Nobel prizewinner William Nordhaus. In this week’s edition of the Debunking Economics podcast Prof Steve Keen takes Phil Dobbie through some of the spurious arguments and assumptions used by Nordhaus to reach his spurious conclusions. Some of them defy logic. If you offered them in a high school science exam, you’d probably fail.This is a FREE episode. Subscribe to hear more episodes in full. Hosted on Acast. See acast.com/privacy for more information.

In Japan Shinzo Abe has announced he is stepping aside because of ill health. Will this mark the end of Abenomics, the term used to describe his three-pronged approach to fighting the country’s ailing growth rate and deflation? Some point to the continued slow growth as a sign that his approach hasn’t worked, but on today’s podcast Prof Steve Keen tells Phil Dobbie, things would have been much worse with a more conventional approach. Japan is an example of Modern Monetary Theory in action, and for those who believe pumping money into the system will create inflation like in Venezuela, why hasn’t this happened in Japan where deflation has been the biggest concern? Hosted on Acast. See acast.com/privacy for more information.