Novara Live Rebel Economist Says Everything You Know About Economics Is Wrong.
12 snips
Nov 14, 2025 
Steve Keen, a heterodox economist known for his critiques of mainstream economics and his foresight about the 2008 crisis, dives deep into the flaws of conventional economic models. He passionately explains how banks create money through loans rather than savings and links rising mortgage credit to soaring house prices. Keen asserts that historical spikes in private debt precede financial crises, and he discusses the impact of deregulation on speculative lending. He proposes innovative solutions, including a modern debt jubilee, to address soaring private debt and affordable housing issues.
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Mainstream Economics' Fundamental Flaws
- Mainstream economics uses persuasive but false models that survived due to institutional inertia.
- Steve Keen argues those models should have been discarded decades ago because they fail empirically and logically.
How Banks Actually Create Money
- Banks create money by issuing loans that simultaneously create deposits and liabilities.
- This 'loans create deposits' process contradicts the textbook money-multiplier and loanable-funds story.
Mortgage Credit Drives House Prices
- Changes in new mortgage debt drive house-price levels because housing supply is relatively fixed.
- Rising mortgage credit fuels demand and creates asset-price spirals in real estate.
