Whitlam Institute: Getting to grips with the economy: John Quiggin, Steve Keen, Guy Debelle
Thu, Jul 23, 2009./noise/talks | LinkTrekked out to the Riverside Theatre at Parramatta with Pete R.. Took us a bit more than an hour to get there, with heavy traffic on Parramatta Road and the M4 even around 4:30pm; I find it hard to believe that anyone would do this every day.
We got there perhaps ten minutes into Quiggin's keynote talk, which sounded a lot like he was reading directly from his blog. Generally he focussed on what the institutional response to the global financial crisis should be, in structural terms. I guess the guts of it is in Quiggin's paper, and in brief, the idea is to get the public sector to take a larger role in the areas where markets have not shown themselves to be superior. A sample argument: the government can always borrow at better rates than the private sector (presumably axiomatically: the private sector is underpinned/regulated by the Government, and hence cannot be a better risk) so there is no real (as compared to political) gain in financing via public-private partnerships. A lot of the nuance was beyond my limited understanding, but as always he sounds at least plausible and often irrefutable.
Of the two respondants, Steve Keen, A/Prof at the University of Western Sydney, stridently claimed the economy is fuelled by debt to a much larger extent than the government admits, and that it has a pervasively pernicious effect. Pete R. was suspicious about his charts and simulations, which were difficult to interpret in such limited time. Most interesting was his claim that all decreases in unemployment since the great depression have been funded by debt that has yet to be paid off; in other words, we have no story for sustainable growth. One man's debt is his countryman's investment?
The other respondent was Guy Debelle, who cursorily dismissed a lot of what Keen had to say. It was difficult to take him for more than a technocrat, playing the reassure-the-sheep role that the Reserve Bank is generally adept at. Not much light, and the heat was a bit tedious.