Last week Kwasi Kwarteng, the new UK Chancellor, announced a cut in taxes at the same time that the government was stepping in to subsidise rising energy costs for homes and businesses. The cost of all this dwarfs the money spent on the furlough scheme. That means there’s a heap of government money being pushed into the public sector. Conventional economists, of the Friedman mould, would argue that we’re already seeing inflation driven by too much money, so what abut this next blast of government spending? Could it make inflation worse? And what about the repercussions on income disparity – from the budget and its unforeseen consequences. Hopefully someone in the Treasury is listening. Hosted on Acast. See acast.com/privacy for more information.

Shadow Banks can take the blame for the 2007-8 financial crisis, packaging up mortgages and selling them as securities to investors. It seems like there’s no lack of imagination when it comes to how these companies find new ways of making money. This week Phil asks Steve if shadow banks are all bad, or is there some good? Do they, for example, create competition for established banks? Or are they simply a mechanism for operators to work outside banking regulations. Is there a need for more regulation of the shadow banking sector? And what is a shadow bank anyway? Hosted on Acast. See acast.com/privacy for more information.

It’s clear, when energy becomes short in supply, free market forces can’t look after all of society. Just the wealthy. That’s why governments are having to step in, propping up an industry that is raking in massive profits. But could free market forces drive a more efficient delivery of energy, by making lower cost renewable energy able to compete on a more level playing field. Whilst there’s no doubt pricing is distorted in favour of fossil fuel provides, Steve tells Phil there’s still no option but to nationalise the provision of energy, something we know will never happen. Hosted on Acast. See acast.com/privacy for more information.

Liz Truss, the UK’s latest Prime Minister, has vowed to review the mandate of the Bank of England (BoE). It’s unclear what outcome she wants, although Kwasi Kwarteng, who is likely to be the new Chancellor of the Exchequer, has suggested the BoE didn’t move fast enough to lift interest rates. Does that mean she wants more influence over the bank’s decision making? On this week’s podcast Phil Dobbie and Prof Steve Keen look at the approach taken by central banks this time round to reduce inflation and Phil asks Steve, if you were to change the function of central banks, what would you do? Hosted on Acast. See acast.com/privacy for more information.

Whilst the US might be struggling a bit with inflation, its nothing compared to what’s likely to happen in Europe. This week Russia shuts down its gas pipeline to Europe, supposedly for repairs, but there’s no guarantee it will open again. Even if it does, supplies are a fraction of what they were and Europe wants to stop its reliance on Russia anyway – pushing prices sky high, with rationing the only likely solution. Meanwhile, the Euro is weakening as the dollar goes from strength to strength, and that’s adding to Europe’s inflation pressures. And throw a drought on to of all of that, adding to the energy and supply problems. Plus a growing wealth divide. Is there any good news for Europe? Steve Keen reckons the only answer, sadly, is for Europe to give-in to Putin and make swathes of Ukraine the sacrificial lamb as the only way to avoid economic collapse. Even then, Europe has a number of inherent problems to overcome. Hosted on Acast. See acast.com/privacy for more information.

It seems the whole approach to global trade is being redrawn. Donald Trump wanted to do less trade with China before the pandemic, and now with the Ukraine invasion the west wants to do less – preferably nothing - with Russia. Hardly surprising then that the BRICs nations (Brazil, Russia, India, China, South Africa) are developing their own ecosystem that could see them trade less with the west, including developing their own trading currency to remove the reliance on the US dollar. Phil Dobbie talks to Steve Keen about the impact this would have on the West. Hosted on Acast. See acast.com/privacy for more information.

It’s a question being asked more and more. How many of the things that we privatised should be brought back under state control, as energy companies record massive profits, yet those on low incomes are struggling to heat their homes? In the UK privatisation was rampant in the eighties, but were mistakes made? Steve Keen has a simple test as to whether some things are best managed by the public sector or the private sector? But what about public-private partnerships? Are they potentially the worst outcome of all? Hosted on Acast. See acast.com/privacy for more information.

On the Why Curve podcast last week, Phil (and Roger Hearing) spoke to Daniel Gros, Director of the Centre for European Policy Studies, who argued that the gas crisis in Europe will be largely resolved by the pricing mechanism. High gas prices from Russia are making LNG imports feasible, because Europe will pay more than Asia for supplies. It won’t completely bridge the shortfall, he says, but if Europeans make a 15 percent cut in usage, then there will be no need to negotiate with Putin. This week on the Debunking Economics podcast Steve Keen argues that the pricing mechanism ignores the needs of the poor and has, for decades, favoured the rich. The fact that governments need to subsidise low-income households against rising fuel prices, whilst energy companies report record profits, demonstrates just how broken the pricing mechanism is. Hosted on Acast. See acast.com/privacy for more information.

Central banks are pushing up interest rates to slow down the rate of inflation. The principle is simple. Supplies are constrained and demand is high, so we’re being charged more for practically everything. If we can slow demand then the demand-supply divide will narrow. But can you do that without throwing the world into a recession in the process? The US Federal Reserve seems to think so. They put out a paper last week, by Chris Waller and Andrew Figura, called ‘What does the Beveridge curve tell us about the likelihood of a soft landing?’ Today Phil Dobbie talks to Steve Keen about the argument that a soft-landing can be secured if there are fewer jobs being offered, not a reduction in the number of people employed. Hosted on Acast. See acast.com/privacy for more information.

In the UK petrol cars emit 128g of CO2 per kilometre. In the US they drive bigger cars, for longer, so the carbon impact is that much greater. But cars, buses and motorcycles account for less than 10 percent of greenhouse gas emissions. Switching to electric could make a difference (unless of course the electricity is coal powered) but will it make a big enough difference, and are the objectives for Net Zero by 2050 really achievable? Phil Dobbie talks to Prof Steve Keen, and asks, are we lulling ourselves into a false sense of security when we think electric cars are a big part of the answer to climate change? Hosted on Acast. See acast.com/privacy for more information.