Debunking Economics - the podcast

The podcast dives into the gaps between overall economic indicators and the realities faced by low-income individuals. It critiques the reliance on aggregate statistics, revealing how they mask important disparities within social classes. The discussion emphasizes the need for nuanced economic models that consider income distribution, particularly as central bank policies impact these groups differently. Challenging traditional classifications of workers and capitalists, it advocates for a clearer understanding of today’s complex labor market dynamics.

The pandemic was the biggest economic disturbance since the second world war. In both cases supply chains were severely disrupted, either by German U-boats or, more recently, factories and borders closed to stop the spread of disease. On the face of it, though, we have got off relatively Scot-free. We haven’t seen the massive fall in GDP experienced after the war. In fact we saw a sharper fall in GDP in the 2008 financial crisis.What is different is how we have handled the readjustment. After the war the focus was on growth, with very low interest rates, even though the inflation rate in Britain almost reached 17%. This time we’re told growth is again the focus, but the policies being applied, by governments and central banks, seem to suggest otherwise. Hosted on Acast. See acast.com/privacy for more information.

A couple of years ago, when warning of the need to fight inflation, Jerome Powell, Governor of the US Federal Reserve says interest rate would rise and jobs might disappear. Yet, interest rates have risen, and unemployment hasn’t fallen anywhere near as much as expected. So, what’s going on? Does it mean, thankfully, that monetary policy isn’t working as well as expected? Now the talk is of a soft landing, where jobs have been protected and inflation has come down. The work of fine tuning by the central bank, or just a coincidence. Phil Dobbie and Steve Keen talk about the interplay between jobs, wages, inflation and central bank policy. Hosted on Acast. See acast.com/privacy for more information.

The growing wave of retirees is straining government budgets and welfare systems. As baby boomers age, potential solutions include attracting younger migrants or reconsidering budget balancing. The podcast delves into the pension crisis and critiques changes in economic policies that impact income and living standards for the elderly. It highlights the necessity for a shift in economic strategies to foster sustainability. The discussion also touches on the urgency for younger generations to drive political changes amid rising financial challenges.

The last time interest rates were this high they came down rather fast. This time central bankers are determined to manage a slow unwind and deliver a return to growth without wreaking havoc on the economy. Will they be successful? This week Steve Keen argues the high interest rates are inflicting damage without treating the problem. Inflation is being caused by businesses increasing their mark-ups. But, Phil asks, surely they are only able to do that because demand is outstripping supply. And what should interest rates return to? Central bakers call it the R* - is there a danger if they assume it’s too high we could drive ourselves towards debt deflation? Hosted on Acast. See acast.com/privacy for more information.

Complex systems don’t have to be complicated to provided deep insights into the real world. That’s the view of Doyne Farmer, special guest on this week’s podcast. It’s an approach he shares to economics with Steve Keen. Steve develops systems from the top-down, whereas Doyne’s work focuses on agent-driven bottom-up modelling. But they arrive at similar conclusions. Phil Dobbie talks to them both about how we could arrive at a more accurate understanding of the economy and financial systems, which could result in better regulatory and planning behaviour by central banks and governments. Doyne also describes how he started down the road of complex modelling, using science to beat the casino tables in Vegas. Or more, get a copy of Doyne’s new book: Making Sense of Chaos– A Better Economics for a Better World. Hosted on Acast. See acast.com/privacy for more information.

Explore the puzzling dynamics of savings and debt, where often, money saved is merely slated to pay off existing loans. Discover how increased savings can paradoxically dampen consumer spending, affecting business investment. Dive into critiques of traditional economic theories, revealing how soaring housing prices and personal debt reshape our financial landscape. Hear arguments for innovative solutions to tackle economic inequality while questioning the notion that more savings leads to greater investment. Unpack these intricate financial relationships!

This discussion dives into the often-overlooked role of energy in economic models, challenging the focus on labor and capital. Energy is presented as a vital driver of growth, essential for both humans and machines. The conversation emphasizes the need to reevaluate energy's place in economic theories to promote sustainability. It also tackles the link between energy consumption, GDP, and environmental impact, advocating for a transition to more efficient energy systems, while reminding us that economic growth must align with planetary health.

We are obsessed with the need to own things, not least, our homes. But for younger people that is increasingly becoming a pipedream, unless they are lucky enough to gain a healthy inheritance. Even then it’s going to come later in life. In the meantime, we save like crazy, and even when we do get a house, we spend decades paying it off though a hefty loan form the bank. The finance sector are the big winners. But should we do away with this unhealthy obsession and rent our homes. A d should the government be the landlord most of us turn to, rather than a private property owner borrowing from their bank?  Hosted on Acast. See acast.com/privacy for more information.

Exploring the dominance of tech giants in the global share market, the impact of high valuations on the economy, and the challenges faced by smaller businesses in competing with cash-rich companies. Discussing market structures, monopolies, and proposed solutions to address issues of competition, innovation, and financial literacy.