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The UK won’t see an end to lockdown measures until July, but after that the hope of many is that the economy will bounce back quickly. The Bank of England governor has called it a coiled spring. Many are comparing it to the roaring twenties. Part of the reason for this optimism is the argument that many people in the country have saved money during the lockdown, because they haven’t been able to spend on shopping or on overseas holidays. The household savings ratio increased significantly last year. But the figures are misleading, says Prof Steve Keen, on this week’s Debunking Economics podcast. National account figures ignore the servicing of debt, so the gap between income and consumption appears greater than it is in reality. If there was an increase in household savings you’d expect a decrease in the amount of household debt – but that’s not happening, says Steve. There’s a danger that the UK government will assume a rapid recovery, and pull back on stimulus measures that we’ll discover are needed further down the track. All because they ignored the impact of debt.

The UK won’t see an end to lockdown measures until July, but after that the hope of many is that the economy will bounce back quickly. The Bank of England governor has called it a coiled spring. Many are comparing it to the roaring twenties. Part of the reason for this optimism is the argument that many people in the country have saved money during the lockdown, because they haven’t been able to spend on shopping or on overseas holidays. The household savings ratio increased significantly last year. But the figures are misleading, says Prof Steve Keen, on this week’s Debunking Economics podcast. National account figures ignore the servicing of debt, so the gap between income and consumption appears greater than it is in reality. If there was an increase in household savings you’d expect a decrease in the amount of household debt – but that’s not happening, says Steve. There’s a danger that the UK government will assume a rapid recovery, and pull back on stimulus measures that we’ll discover are needed further down the track. All because they ignored the impact of debt.

To hear the full version subscribe by picking a plan in the right column of the Debunking Economics website (not the mobile app). Or become a supporter at https://www.patreon.com/ProfSteveKeen

Australians can no longer turn to Facebook for news. From today they have banned Aussies from posting links to news sites on their platform, or for Facebook users anywhere linking to Australian news content. Australian treasurer Josh Frydenberg says these actions demonstrate that the big social media players wield too much power and control. Facebook has taken this stance because they don’t believe they should have to pay whenever anyone on Facebook chooses to link to an Australian news site. Who can blame them? So howshould new content be funded, and should we be concerned about the power of the major internet players? Phil Dobbie and Steve Keen don’t exactly see eye to eye on this.

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In 2019 Greta Thunberg spoke to politicians at the UN Climate Week, saying they were promoting fairy tales of eternal economic growth. The next year we saw GDP in advanced economies fall by around five percent.  Was this a win for the green movement? James Strain, a Debunking Economics Podcast listener, suggested we talked about the need for de-growth. He said, “It seems to me that this is imperative to our transition to a more sustainable society, but it breaks so many long-held fundamentals in mainstream economics that it's hard to see how we would begin to make the transition.” Most attempts to transition to a green economy have been fairly piecemeal, and don’t acknowledge the need for a move to less consumption. There is an answer, though. Steve Keen wasn’t a supporter of carbon trading at the business level, but he reminds Phil Dobbie of his suggestion that countries allocated carbon points to individuals. If you wanted to use more then you’d have to buy points from somebody else. They discuss how it could work in practice.

In 2019 Greta Thunberg spoke to politicians at the UN Climate Week, saying they were promoting fairy tales of eternal economic growth. The next year we saw GDP in advanced economies fall by around five percent.  Was this a win for the green movement? James Strain, a Debunking Economics Podcast listener, suggested we talked about the need for de-growth. He said, “It seems to me that this is imperative to our transition to a more sustainable society, but it breaks so many long-held fundamentals in mainstream economics that it's hard to see how we would begin to make the transition.” Most attempts to transition to a green economy have been fairly piecemeal, and don’t acknowledge the need for a move to less consumption. There is an answer, though. Steve Keen wasn’t a supporter of carbon trading at the business level, but he reminds Phil Dobbie of his suggestion that countries allocated carbon points to individuals. If you wanted to use more then you’d have to buy points from somebody else. They discuss how it could work in practice.

To hear the full version subscribe by picking a plan in the right column of the Debunking Economics website (not the mobile app). Or become a supporter at https://www.patreon.com/ProfSteveKeen

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There was a bit of argy-bargy on the share markets in America last week, when a bunch of day traders set to take on Wall Street, particularly the hedge funds who were shorting stock on Gamestop, amongst others. Were the day traders the bad guys in this scenario? Did the retail traders know what they were getting themselves in for? In this episode Prof Steve Keen suggests maybe the Robin Hood retail platform should be considered the bad guys. A step in the direction would be to reduce speculation in the market not drawing more people into it, he says on this week’s podcast, not to mention the waste of brainpower that has been exerted on this while exercise!

There was a bit of argy-bargy on the share markets in America last week, when a bunch of day traders set to take on Wall Street, particularly the hedge funds who were shorting stock on Gamestop, amongst others. Were the day traders the bad guys in this scenario? Did the retail traders know what they were getting themselves in for? In this episode Prof Steve Keen suggests maybe the Robin Hood retail platform should be considered the bad guys. A step in the direction would be to reduce speculation in the market not drawing more people into it, he says on this week’s podcast, not to mention the waste of brainpower that has been exerted on this while exercise!

To hear the full version subscribe by picking a plan in the right column of the Debunking Economics website (not the mobile app). Or become a supporter at https://www.patreon.com/ProfSteveKeen

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Remember a time when central banks pretended to be independent, insulated from day-to-day politics? That had all but disappeared before COVID, but the pandemic was the final nail in the coffin of central bank independence. Instead, they have been colluding with governments to provide the mechanism to issue more public sector debt. Monetarism can’t resolve this crisis, so central banks’ usual tools are worthless. This week Phil Dobbie asks Prof Steve Keen whether this new arrangement, where the central banks and the treasury collude, is here to stay? If the government can use money creation to develop policies to build jobs and control inflation, what’s left for the central banks?  

Remember a time when central banks pretended to be independent, insulated from day-to-day politics? That had all but disappeared before COVID, but the pandemic was the final nail in the coffin of central bank independence. Instead, they have been colluding with governments to provide the mechanism to issue more public sector debt. Monetarism can’t resolve this crisis, so central banks’ usual tools are worthless. This week Phil Dobbie asks Prof Steve Keen whether this new arrangement, where the central banks and the treasury collude, is here to stay? If the government can use money creation to develop policies to build jobs and control inflation, what’s left for the central banks?  

To hear the full version subscribe by picking a plan in the right column of the Debunking Economics website (not the mobile app). Or become a supporter at https://www.patreon.com/ProfSteveKeen

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Last weekend, Lord Sumption, was talking about why a lockdown harms everyone when the virus mainly ills people who are old or who have with debilitating conditions. He suggested we shouldn’t have lockdowns, because the lives lost were of less value than the rest of us. He isn’t the first to suggest that some lives are worth more than others. In fact, he argues we place a value on human life to determine the extent of healthcare intervention. It’s called the Value of Prevented Fatality (VPF).  This week on the Debunking Economics podcast Phil Dobbie asks Prof Steve Keen whether we should consider the value of life in segments of society when developing policy on the pandemic. Some would see pensioners as a cost to society and, if you were being totally heartless, less of them would be a benefit to the economy. We look at just how flawed that thinking is.

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