https://profstevekeen.substack.com/p/puncturing-the-hubris-of-economics?utm_sour...

Puncturing the Hubris of Economics

"The greatest disjuncture in the social sciences is between the image that economists have of their discipline, and its reality. A decade before David Graeber published Debt: the First 5000 Years (Graeber 2011), the future chief economic advisor (Lazear) to President George W. Bush published a paper with the confronting title of "Economic Imperialism" (Lazear 2000), in the discipline's most prestigious journal, The Quarterly Journal of Economics. Lazear was not criticizing economics for attempting to take over other fields of social science, but lauding it for doing so:"

An in depth look at the delusions of mainstream economics. 

Here is one priceless excerpt:

"The concept of "Bullshit Jobs" made intuitive sense to normal people, many of whom provided the materials for that book. But according to the Neoclassical theory that wages are based upon a worker's "marginal product", bullshit jobs could not exist, because the "marginal product" of a bullshit job is negative."

https://profstevekeen.substack.com/p/its-a-mixed-credit-fiat-world?utm_source=po...

This attitude towards government debt and deficits—that government debt should be minimised, that deficits are undesirable, that interest payments on government debt are a punitive impost on future generations, and that high debt and high interest payments can even lead to a government going bankrupt—are key facets of contemporary politics. They were behind the attempt by the UK Cameron government to run surpluses rather than deficits, on the principle that, by "saving for a rainy day", the government would have more money on hand when crises struck in the future. They lie behind the recurring "debt ceiling" debates in the US Congress. They are the basis of the Eurozone rules, enshrined in the Maastricht Treaty, that government debt should not exceed 60% of GDP, and deficits should be no more than 3% of GDP.

And they are all completely wrong, as is easily shown by looking at the accounting of the mixed credit-fiat monetary system in which we live. I will explain this very, very slowly. It may be tedious to read—it was tedious to write!—but this is necessary, given that utterly fallacious beliefs about the financial system are ingrained into, and damage, our political and social systems, thanks to erroneous mainstream economic thinking.

Lisa Jones wrote on Nov 7^th, 2023 at 7:54am:


We know where you invest your money - you rent-seeking landlord - ie, in the OZ housing ponzi that is crippling half the  population who are renters and recent mortgagees. 

"Nothing is impossible for the currency-issuer"......provided you are not deluded by mainstream neoclassical economists.

The temerity of austerity

The problem with austerity is it doesn’t work. Yet governments seem intent on using it as a reason to force budget cuts, ignoring the fact that it always results in an economic downturn.

George Osbourne was the UK Chancellor wedded to austerity. “More cuts, more difficult decisions” he said at the start of 2014, as he struggled to get the British budget back into surplus. But regular listeners to this podcast know that a government budget in surplus is sucking money out of the economy. Steve Keen reminds us of the logic that shows austerity does nothing except cause damage. Phil talks through some of that damage, including cuts to public services, a shortage of UK life expectancy, even an increase in hate crime. But, weirdly, the country is still facing austerity. Not through a lack of government spending, but through a high level of taxation**. People are still struggling, and the economy is on a fast road to nowhere, whilst other countries follow suit."


**In Oz, the government is about to reduce taxes on the wealthy via stage 3 tax cuts, so spending will have to be reduced - according to the 'deficit myth'.

Speaking of Javier Milei:

https://edition.cnn.com/2023/11/20/economy/argentina-peso-dollar/index.html

Can Argentina really move from the peso to the dollar?

Oh dear.....Milei wants to surrender Argentina's productive capacity to the tender mercies of the US Fed.....

But as for "printing money",  all states need to reclaim the power of money issuance on behalf of the public sector,  separate from money creation in private sector banks. 

Which means in effect the state needs to have first claim on a portion of the nation's resources, sufficient to achieve public sector gaols, eg housing for all and jobs for all, when the private sector fails to achieve these national public goals. 

This is the mistake of the Peronists; they "printed money" without ensuring the resources wanted by government (to achieve social justice) were available for purchase.

But pity Argentina, with Milei thinking of his country becoming a monetary vassal of the USA - without the paperwork in order.....

And the US itself is one of the most unequal societies on the planet.....

Tweet from Jason Restante:

Suggesting the government can't afford climate change mitigation, #TheDrum host says 'the government is not made of money.'

Maybe not, but they issue the currency. It's well beyond time for informed discussion on the true capacity of our government to act in the public interest.

Oh...and well beyond time the insanity of leading mainstream economists like RBA's ("Reverse Bank of Oz") Michelle Bullock should be exposed; she thinks Aussies getting haircuts and going to dentists is causing inflation - which only proves she is wedded to an insane ideology.

Frank wrote on Nov 24^th, 2023 at 9:09am:


You already posted that, to which I replied in #669. 

But you and Milei - with no understanding of the nature of money -  are too desperate or incompetent to address the issues. 

Namely, money is created out of nothing; the issue to be addressed is by whom, and what for.

Which is why you are content with Bullock's insanity.