Debunking Economics - the podcast

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.

The UK Labour party has struggled to forge a recovery for the beleaguered economy. Rachel Reeves is intent on reducing the government deficit. Her first attempt involved increasing the National Insurance contributions made by businesses – in effect, raising a payrolls tax. In short, a reason for companies unsure about recruiting in a slow growth economy to err on the side of caution. Now, there’s talk of tax rises. Steve and phil talk about the impact on growth of added more to the consumer’s tax burden, and the impact it’ll have on money in circulation. Then there’s the confusing idea of increasing savings as though that’ll drive investment which will add to economic growth. That might be the case if the money was invested in new businesses, rather than inflating share prices and other financial instruments, which all deflect money from the real economy. Hosted on Acast. See acast.com/privacy for more information.

Before he was the UK Prime Minister at war with the Nazis, Winston Churchill ws the UK’s Chancellor. He played it very straight, with a preoccupation with balancing the budget. He also took the Uk back onto the Gold Exchange, despite warnings from Keynes that the move would be deflationary. In 1928 he reinforced his neoclassical credentials, saying very little additional employment and no permanent employment can be created by state borrowing and state expenditure. That is, of course, the exact opposite of the idea of a job guarantee, but is Churchill partially right? Can a job guarantee ever create jobs that will enhance productivity?This week Phil and Steve look into job creation and Churchill’s fear of using government spending to protect the labour market. It was a time when even Joh Maynard Keynes didn’t get everything right. For example, he argued that the multiplier effect would add new money and new employment from government cash injections. But how can you multiple the injection if no new money is created? And it ignores the real benefits jobs can create, behind the money gained from those directly employed, whether by the government or the private sector.  Hosted on Acast. See acast.com/privacy for more information.

In UK politicians of all persuasions agree that foreign investment I s important to add to the growth of the UK economy. Steve says you have to have foreigners buying into the UK to counter the currency losses from a sizeable balance of trade deficit. But a lot of that investment will see profits being repatriated back overseas. And then there’d the overseas investment in UK bonds and shares. Andy Burnham, the Manchester Mayor who seems to be positioning himself to replace Keir Starmer, has said we need to limit the ownership of UK nbonds to foreign investors, and not be ‘in hock’ to bond markets. Has he got his thinking right? Hosted on Acast. See acast.com/privacy for more information.