Posted January 3, 2013
by Jerry Alatalo
Economics is a science that many view as a field studied by some types of crystal ball gazers, mystics, or readers of tea leaves. Most people, when watching television and an economist or economics discussion comes to the screen, immediately grab the remote to switch the channel. Economists come across to men and women as boring, supply and demand, blah-blah-blah, kinds of academicians – speaking in a foreign language which is impossible to translate.
Economists become employed in the financial and business sectors, many times as apologists for negative actions by their paymasters, helping to perpetuate such things as corruption and greed and insider trading on Wall Street. Most schools of economics teach a very narrow range of economic theories, focused on the so-called neoclassical school – without teaching the many and diverse economic views available. This is comparable to the medical colleges where doctors never take courses in natural/alternative medicine, coming to their practices with only the pharmaceutical option for patients.
The following quote of Franklin Delano Roosevelt may give evidence of his study of alternative economic theories, (from 1936 campaign speech) “[Business and finance are] unanimous in their hate for me – and I welcome their hatred… I should like to have it said of my first Administration that in it the forces of selfishness and of lust for power met their match; I would like to have it said of my second Administration that in it these forces met their master.”
A telling series of scenes from the 2010 Academy Award winning documentary “Inside Job” by Charles Ferguson gives evidence of the negative aspects of narrow economic course of study prevalent in most schools of economics. In the scenes toward the end of the film Mr. Ferguson sits down with economists employed by the federal government and large financial corporations. He asks a series of hard-hitting questions to them and they become visibly frustrated and upset. The questions revolved around total absence of prosecution of individuals for massive fraud and corruption which contributed greatly to the economic crisis.
So, economists at times become the “bad cop” in the “good cop, bad cop” equation, selling out to the mafia banking cartels for high paying jobs and nice, cushy careers. Economists have become trained in the narrow manner, and risk estrangement and non-employment in the financial sector if they speak out on alternative economic theories and models. One can only guess how many “go along to get along” while having knowledge of more beneficial economics ideas.
About the only good consequence of the world’s economic crisis beginning in 2007-8 to present has been the increase in economic discussions of alternative theories – an accelerating of economic science evolution. More men and women around the world are holding conferences, giving radio and television interviews, starting websites, etc. to bring forward ideas which, if implemented, promise improvements in the economies of nations and regions around the Earth.
Ideas are being widely shared, like returning to the Glass-Steagall Act, establishment of city, county, state, and national public banks, and quantitative easing funds being redirected from banks to the personal bank accounts of people. Many men and women advocate for the first two ideas, economist Steve Keen is an advocate of these and “QE for the people”. He has come to the view that it is not “public debt” that is the issue of concern, but “private debt” is much greater in importance – and has to be focused on.
His view is that western industrialized nations will experience 20 years of economic stagnation like Japan if the issue of massive, record, levels of private debt are not dealt with in straight-on, intentional ways. Debt “jubilees” or write-offs, in the form of direct payment of QE funds to the citizens, for paying down debts and purchasing to rev the economy and create jobs, is an evolutionary idea that has the potential to bring real results and solutions. QE funds directed to banks has benefitted nobody but Wall Street, leaving “Main Street” no better off.
Up until now, governments and their elected representatives have focused and shaped their policies in the interests of the lending class – the financial sectors. Steve Keen suggests that either the debtors become placed at the top of the lawmakers’ list of “interests” to focus on, or there will be at least twenty more years of slumping economies. The Federal Reserve has implemented some $3.2 trillion of purchasing to end up with the result of record-breaking stock market levels. Unfortunately those monies have not ended up in the bank accounts and pockets of everyday, average Americans – or citizens around the world.
The funds are not being used to make purchases, stimulate the economy, or hiring by employees. The funds have been used to speculate and “make money from money”, allowing a state of affairs where there is wealth inequality not seen since before the Great Depression. The unfortunate fact is that the rich and super-rich do not spend and purchase at the high rates average middle and lower-income folks do. So, Steve Keen’s QE for the people concept makes obvious sense.
Implementing his idea, while implementing other common sense solutions, such as Glass-Steagall, public banking, raising taxes on the wealthy to pre-Reagan percentages, raising the minimum wage, etc., in any combination that is doable and practical, would certainly improve the lives of people in America and nations around the world.
Steve Keen’s website is debtdeflation.com.
Economics is evolutionary.
(Thanks to ProfSteveKeen @ YouTube)