Debunking Economics - the podcast

Join Phil and Steve as they unravel the mysteries of the government bond market. They discuss why governments issue bonds and how deficits create reserves, clarifying the role of double-entry bookkeeping. The duo debunks myths about banks, explaining that reserves don't limit lending. They delve into the differences between primary and secondary markets and analyze the real impact of bond sales on money supply. Plus, they explore the influence of central banks and the question of whether bond vigilantes truly exist.

In this episode of Debunking Economics, Phil Dobbie and Professor Steve Keen tackle the global obsession with interest rates. From Australia’s Reserve Bank to the UK’s faltering economy, they explore how central banks use rate changes as a blunt tool to manage inflation and growth. Phil highlights the real‑world pressures on households—mortgages, rents, and tax thresholds—while Steve dismantles the neoclassical models that underpin mainstream policy, exposing their unrealistic assumptions about consumption, altruism, and infinite planning horizons.Together they reveal how rate hikes often enrich bondholders while squeezing ordinary borrowers, skewing income distribution and destabilising financial systems. The conversation ranges from Keynesian misinterpretations to modern monetary theory, questioning whether interest rates can ever be the fine‑tuned instrument economists claim. It’s a lively, critical look at the myths of monetary policy and the urgent need for alternatives that address capacity, inequality, and democratic accountability. Hosted on Acast. See acast.com/privacy for more information.

In this week’s Debunking Economics podcast, Phil Dobbie and Prof. Steve Keen dive into the global water crisis under the banner “Trouble on the Waterfront.” They explore the paradox of Earth’s abundant water supply versus the tiny fraction that is actually accessible, highlighting UN figures that show billions still lack safe drinking water and sanitation. From the UK’s tight margins between renewable supply and consumption, to Australia’s surplus constrained by geography, and Iran’s alarming shortages that threaten the viability of Tehran itself, the discussion underscores how climate change and poor management amplify the risks. Along the way, they touch on desalination’s energy intensity, the embedded water footprint in consumer goods, and the stark reality that water scarcity is as much about distribution and governance as it is about absolute supply.The conversation then pivots to the UK, where privatisation of the water industry has left infrastructure lagging. Keen points out that while the public sector once invested in long‑term projects like Kielder Reservoir, the private sector has built virtually no new dams since the 1990s, preferring short‑term profit over resilience. Together, they argue that essential resources like water and power require excess capacity and long‑term planning—something markets alone cannot deliver. With wit and urgency, the episode makes clear that water is the ultimate recyclable resource, but without effective stewardship, even countries famed for rainfall could face scarcity. Hosted on Acast. See acast.com/privacy for more information.

Economist Steve Keen critiques shrinking foreign aid budgets, noting cuts from the UK and US jeopardize global progress in child survival. He argues that aid often favors donor interests over genuine support, perpetuating global imbalances. Keen suggests revisiting Keynes' Bancor to create a fairer system for funding poor countries. He highlights how domestic politics distort aid allocations and emphasizes the historical responsibility wealthier nations have due to colonial legacies. The discussion raises critical questions about the effectiveness of current aid strategies.

Explore the intriguing principles of Austrian economics versus neoclassical theories. Discover how Austrian thought emphasizes entrepreneurial innovation born from disequilibrium. Dive into the critiques of praxeology and the limitations of introspection in economic research. Uncover Schumpeter's insights on credit cycles and the impact of private debt on economic stability. Engage with the debate over money creation, interest rates, and libertarian perspectives. This conversation illuminates the complexities of economic thought and its practical implications.

Explore the promise and pitfalls of Bitcoin as a global currency. There's a debate on whether it can supplant fiat money, given its slow transactions and energy usage. Learn how Bitcoin’s fixed supply could lead to deflation, complicating its role in the economy. Hosts discuss Bitcoin's increasing correlation with equities, highlighting risks of leverage and margin calls. The conversation covers the potential disenfranchisement of many in a Bitcoin-dominated world and the urgent need for regulation to protect investors.

The discussion dives into the alarming trend of corporate influence over public utilities like water and healthcare in Britain. Profits soar while infrastructure crumbles under neglect. Freeports and corporate-run towns threaten local democracy, reducing citizens to contract signers. The podcast questions the role of AI in shaping opinions and highlights the push against public media. With rising rents and declining housing stock, listeners are prompted to consider the implications of privatization on essential services and the very fabric of society.

Several listeners have written in to get Steve’s views on the path being taken by Mark Carney to rescue the Canadian economy. Initially it looked like the country was rebounding strongly from the pandemic, but in the last couple of years the growth has slowed and then declined. That was before President Trump hit them hard with tariffs and then said he’d like them to become part of the US. In some ways he is trying the same approach as the UK – to balance the operational side of government spending but inventing in infrastructure beyond that balanced operational budget. That would be fine if a large chunk of that investment wasn’t going to defence. There’s also very little attention to the most fundamental issue for Canada unaffordable housing. Proudly the most unaffordable in the world. Hard to get people to spend when a huge chunk of their income is disappearing into mortgage payments.There’s another fundamental problem with Carney’s approach. As Steve points out, it almost every policy it relies on outside influence, rather than domestic resolutions. Hosted on Acast. See acast.com/privacy for more information.

This week Phil and Steve look at cost-plus inflation, driven by rising wages. Right now its being given as the reason that services inflation is remaining sticky and that’s why many central banks are reluctant to reduce interest rates. Steve says it’s a far more sensible assumption than the neoclassical belief, promulgated by Milton Friedman, that inflation is always and everywhere a monetary phenomenon.It's not just workers who can put prices up, of course. Companies can increase their margins, and we saw a fair bit of that post-COVID. Burt what of the tech-driven future, where wage negotiations will be harder. Basically, we’ll be lucky if we have a job. Does that mean the tech bros call the shots and wage driven inflation will be a thing of the past? Hosted on Acast. See acast.com/privacy for more information.

Is it fair enough to totally write off Ricardo’s theory of competitive advantage? Certainly, President Trump isn’t an advocate, using tariffs to protect America’s domestic industries from those countries that produce stuff cheaper. A broad economy, producing a range of products and services, is preferably to a narrow one, reliant on one or two key exports, which is what Ricardo advocated. But in support of Ricardo, some of the narrowest economies, like Australia, have some of the highest levels of GDP per capita. It seems to work for resource-based economies, so far. But could they be even richer? Phil and Steve discuss Ricardo and economic complexity in the age of Trump’s tariff agenda.  Hosted on Acast. See acast.com/privacy for more information.