Steve Keen’s Debt Watch

Next Fed Chair's Game-Changing Vision.

Mainstream economics is like a ship lost at sea. It sails on the waves of outdated theories. Energy is the wind that fills its sails. Without it, the ship drifts aimlessly. Labor without energy is like a car without fuel. It won't move. Capital becomes a mere decoration. A beautiful sculpture, but utterly useless. Mainstream economists cling to their models. They believe these models represent reality. But reality is a complex web of energy flows. Imagine trying to bake...

Inequality Fuels Financial Crisis?

The belief that climate change will have minimal economic impact is dangerously flawed. Imagine a factory. It relies on energy and raw materials. Now, picture that factory in a world where climate change disrupts energy supplies. Suddenly, the factory can't produce as much. That's not just a minor hiccup. It's a major economic blow. Economists like William Nordhaus assume that 85% of the U.S. economy is unaffected by climate change. This is like saying a ship can sail...

Wage Growth Is Not a Myth!

Neoclassical economists ignore the instability of capitalism. This is a common belief. Many think capitalism is a stable system. They believe markets naturally find equilibrium. But this is fundamentally wrong. Hyman Minsky showed us that rising debt leads to economic crises. His insights reveal that debt accumulation creates instability. When debt rises, so does risk. The more we borrow, the more vulnerable we become. This isn't just theory; it's history. Look at the...

Wealth Effect: A Federal Reserve Myth.

To tackle economic instability, many believe that simply tightening regulations on banks and financial institutions will do the trick. This belief is fundamentally flawed. Regulations alone won't address the root cause of instability, which is excessive private debt. When people are drowning in debt, they can't spend. This leads to a vicious cycle of reduced consumption and economic stagnation. In fact, during the Great Depression, the more debtors paid, the more they owed. This...

Private Debt: The Looming Economic Abyss?

Neoclassical economists claim money doesn't matter. This belief is as absurd as saying water doesn't matter for a fish. Money creation by banks fuels production and growth. Imagine a car running on empty. It won't get far. Ignoring money's role is like ignoring fuel in an engine. Mainstream models often omit banks and private debt. This is akin to a chef ignoring ingredients in a recipe. Without understanding how money flows, we can't grasp economic reality. Take the 2007...