A low volume, high quality source from the demand side perspective.The podcast is produced weekly. A transcript is posted on the day of.

Wednesday, March 19, 2014

Today on the podcast, a test

Things are popping at my new gig as director of IDEAeconomics. Check it out at IDEAeconomics.org. Get on the mailing list for the e-mail explanations coming out over the next week by giving me your e-mail address at demandside@live.com. The mission at IDEAeconomics is to reform economics, to rescue the society from bad economics.
Listen to this episode
We don't do it without you. There is no example of an economics reforming itself from within, of the scholarly debate leading to a more coherent theory and practice. The only successful reform was the Keynesian revolution of the 1930's, when the economy fell apart and the pedants were rejected out of hand. People looked around, saw it was not working, saw a profession that claimed it WAS working and just needed more time, felt the rise of Stalinism and Hitler, and looked for an alternative. The alternative was at hand with Keynes and intuitive with the New Deal.

That is the place you and I find ourselves. Needing to prepare the alternative. In our case, in the modern world, it must be a widespread understanding of how things actually work, confirmed by how it lets us make sense and predict. The material is not difficult. Endogenous money, dynamic process, demand trumping supply. It may sound daunting, but anybody with a high school education can get the basics.

It becomes more difficult, actually, the more you have to unlearn, and at bottom those who are now in the field and have not had the nonsense inculcated in them are a step, or several, ahead of those who are trained. Their tools do not work. When the time comes, and it is already upon us, when people look around for the alternative, it has to be at hand in people's understanding. It cannot be off at IDEA or INET or even one or another national government policy office. That is not the way the modern interconnected, chaotic world works.

Even what progress has been made in the academic debate to date has been done only because of the exigencies of history. What is being done is not working. Monetary policy was going to save the day in '08. "The Fed will do whatever it takes," was the calm assurance. The Fed did whatever, but it didn't take. The biggest transfer of wealth to the already wealthy took place, and a trillion dollar per year buy-up of financial assets took place. But it yielded only a buoyant market and a "recovery" (air quotes that is a matter of statistical semantics. Stagnation, instability, social unrest continue and increase. We in the United States are, in fact, somewhat insulated by our dollar being the favorite currency of the moment.

So, today's podcast is a test. Without interruption, we bring you the relay of a Bloomberg interview of S&P's chief global economist Paul Sheard.

Why is this guy wrong, completely or in part, on every point?