[164] Steve Keen’s take on BIS report & Barry Eichengreen talks Fed & regulation

Our lead story: In the five years since the after math of the financial crisis, auto loans to people with tainted credit have risen more than 130 percent! Last year, roughly one in four new auto loans went to borrowers with subprime credit. Erin takes a look.

Then, Erin sits down with Steve Keen to get his take on the latest BIS report and their criticism of monetarist solutions to our economic woes. After the break, Erin brings you part two of her interview with Dr. Barry Eichengreen. They discuss the Chinese yuan, capital controls, and the Federal Reserve and regulation. Take a look.

And in today’s Big Deal, Erin sits down with Thom Hartmann to discuss telecom mergers and monopolies. Is the consumer being left out? Check it out!

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14 thoughts on “[164] Steve Keen’s take on BIS report & Barry Eichengreen talks Fed & regulation

  1. Solution for corporate merger and monopolies: Please talk about if it’s
    possible that “the people call their politicians to demand price cap and
    price control. Make it illegal to rise prices.” in your later show. 

  2. Nice show, Keen is excellent.
    As an interested civilian, I have a question on derivatives. They seem to
    go back centuries as a hedge or mitigation for risk of price fluctuations
    of commodities etc. and this I can understand to some extent. However, with
    increasing financialisation, do derivatives still perform this function
    regarding risk to the extent required or has the critical mass of
    derivatives currently become something of an extraneous risk in and of
    itself. Is there a theoretical or modelled limit to what level of financial
    derivatives can exist at any one time relative to the “real” economy” or is
    it the nature/quality of the underlying asset that is the determining
    factor?
    Where there seems to be record highs in stocks and other assets atm, do
    derivatives act as a stabilising force in the event of a substantial market
    correction/shock or could the derivative market (seeming quite a complex
    system) add a level of unpredictability in the event of a market
    shock/correction ie unforeseeable consequences?
    Probably a rubbish question, but there it is anyway!!!

  3. Keen is Paul Krugman in disguise. He wouldnt be able to run a popsicle
    stand in a real life.

  4. I do like Steve Keen despite not agreeing with him on a lot. However Tom
    Hartman is a hack

  5. 9:02 – *”Government needs to spend in the opposite direction … you still
    have a cycle but you don’t collapse into a black hole”*

    Keen and Minsky are heterodox? Except for the inclusion of banks and
    credit, their policy formulation sounds very Keynesian, ie, the job of
    fiscal policy is to press on the gas when private spending/credit declines
    and ease off when private spending/credit reaccelerates. I think most
    mainstream economists would agree that fiscal policy should play a bigger
    role than it presently does.

    Is capitalism inherently cyclical? Yes, to the extent everything cycles,
    but our brand of capitalism’s highs and lows are unnaturally exaggerated
    and exacerbated by credit booms and busts created by the very agents whom
    Keen, Minsky and Keynes believe should rescue us when good times turn bad.

    Ironically, while Keen and Minsky recognize the pernicious role of credit
    in the business cycle, their remedy is a band aid rather than an uprooting
    of the source of disease.

    The really heterodox economist would look the black hole in the eye and
    rush in because on the other side lies a reborn virgin economy.

  6. Mr Hartmann, your example on Canada is somewhat a superficial one. It is
    true there are many internet providers in Canada, and the big companies
    that put the pipes down cannot monopolise, but in return is the fact that
    small-sized providers are at the mercy of big companies when it comes to
    physical technical difficulties; and who knows what will happen when the
    death of net neutrality comes to the north 

  7. Mergers do not imply less potential for competition. Assuming free
    enterprise, new comers can come in if consumers are paying more than they
    want for a good. Forcing companies to break up under the Sherman Act runs
    the risk of breaking up beneficial mergers and forcing redundancy in the
    economy driving up costs.

  8. I do not agree with Keen or Hartmann, but at least Keen is intelligent.
    Hartmann does not know anything about economics and will say the dumbest
    things I have ever heard a grown up say. If Hartmann continues to be on
    this show you will lose me as a viewer. I understand that you may need
    fill ins for people who go on holidays, but Hartmann standing for Edward
    brings down the show to a level that I won’t waste my time with.

    Hartmann go and learn basic economics.

  9. Steve is a good guy, the Minskian economy make more sense… but, why
    reiterating every single word of Minsky? There are so much into a complex
    system like economy than a person understand.

    For an example, the cycles of economy, can be devided to 4 different
    cycles… some driven from the position of sun (the effect on agriculture,
    energy sector, new born and so on) one cycle is the generation tides, one
    is geopolitical and worldwide monetary system…

    Just to repeat the Hyman Minsky’s word “the capitalism is inherently
    cyclical”… is ignorant and will lead to miscalculation.

    The economy in general is cyclical respect to the other influence of social
    conditions, geological changes, political and geopolitical cycles.

    The capitalism, in the term of free and uninfluenced system of creation and
    trade of goods and services; follows the general condition of whole
    economy… therefore, it will become cyclical.

    I mean, if the winner takes all, and there is no other changes, there would
    be no other player to challenge the winner… an example would be the
    Hodson Bay’s company that has a strong hold monopoly on the fur trade in
    Canada for more than 336 years. Simply, because it is the best and the
    biggest, it is in stable geology of the world and the rest…

  10. Dr. Barry Eichengreen basically said China should create a freely floating
    currency and a central bank like the Federal Reserve. Translation: China
    should create a monetary system that could be manipulated by Western
    corporations and governments.

    Keep in the mind the Federal Reserve is not federal nor a reserve. It has
    a government-mandated money monopoly and a government website, but it is a
    private bank that works closely with the executive branch and legislative
    branch. It is also closely linked to many banks and investment firms. In
    other words, the Federal Reserve enjoys both pubic and private benefits.

    In addition, a freely floating currency such as the US dollar is constantly
    monopolized and manipulated by the US Federal Reserve, major US
    corporations, and the US government. In other words, the US dollar is NOT
    freely floated. It is constantly manipulated to favor the US ruling class.

    China’s ruling class is not that dumb to naively welcome a Trojan horse as
    dangerous as a truly freely floated currency. China’s central bank will be
    under the control of the ruling class, even if it is a dishonestly private
    like the Fed. China’s ruling class will cheat the system to its favor like
    any intelligent ruling class.

    This is real politics, not academic propaganda. Ideally, we deserve a
    better system that better respects each person’s property rights and life
    (e.g. no inflation tax) and better balances individual rights and
    responsibilities with those of the community, but incompetent and/or
    corrupt people create the need for substandard systems.

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