Steve Keen: Europe’s in a Three Stooges Recovery

Love Keen’s work, have enjoyed watching his interviews in the past, and hope to see him speak in person one day (I heard he was at University of Toronto awhile back for a visit, but not sure if he did any speaking and/or public events?).

That being said, I’ve never completely understood/accepted his “Debt Jubilee”. If everyone was given “free money”, it sounds as if the big losers would be the lenders while those who shouldn’t have over-extended themselves with excessive debt in the first place. They get to keep their ill-gotten wealth (likely their homes and maybe a car or two, being our biggest purchases), while everyone else gets a whole bunch of money that will likely be used to chase either a) more financial products and/or assets, driving up prices to even more unsustainable levels, or b) real necessities/consumables like food, water, energy, etc. which will drive prices even higher, further deteriorating everyone’s standard of living.

Maybe I’m too doom & gloom, but I think a crash is just what the doctor ordered. Anything less and people will fail to learn one of life’s greatest lessons – what goes up, must come down.

Cheers.

“giving money to banks has been made far more socially acceptable than giving it to people”

I am confused about “giving” money to banks. Is the Fed underpaying for collateral or overpaying? I have read the Fed loans against valuable collateral.

I don’t see a debt jublilee like this happening, but I do think it’s something that should be tried. I’m very cynical about governments in general and find they tend to make a bad situation worse as expensively (and stupidly) as possible. Perhaps some places will make an attempt do follow this route. It makes me wonder how long any heads of state who tried this would last in power though before having an accident of some kind. After all, the goal is to diminish the financial sector, but Big Capital writes the rules of the game and would not appreciate attempts to put them in their place. Those who benefit from the status quo can be expected to defend it, even at huge cost to everyone else (and ultimately to themselves as well, but that outcome lies beyond their greed horizon).

@ilargi,

Not trying to keep things the way they are – I know they have to change and already have started to move in that direction.

I guess the question was more around the thought of “should I basically be prepared to read about mass population die-off?” at some point, as nothing we’re doing seems to be able to mitigate either a) limits to growth, or b) the population growth rate, at this point. Or at least not within the broader context, the “silver-lining” exception being that people’s consumption rates sound to be starting to decline (though likely because people’s ability to take on additional debt has peaked?).

It also makes me wonder what the value in conducting a debt jubilee is, given that it seems the only way most people are going to wake up to the reality of our situation is through pain/loss/suffering (all arguably self-inflicted, given that most people ignore reality and thus fail to manage their expectations of the future)? Maybe that’s a sour/gloomy outlook, but I don’t think I’ve ever been able to see the value in helping people in the short run if it causes them longer-term pain/lost/suffering.

Lastly, on making money – “success” is not at all one of my considerations, and was not my intent to imply any such thing. However much The Automatic Earth as a website makes is not an indication of its success, but you must admit that funding is required to continue your efforts here.

As a young person, I’m not privileged enough to own my own 50 acre compound, set up solar/wood based energy solutions, or invest large amounts of my time in learning to live in an energy-poor world despite *knowing* (or at least believing) this is the future I need to prepare for. Thus I’m forced to look for other solutions – namely, working to support myself and build up enough capital to invest in the future I perceive to be unavoidable. If I can make enough not to have to live in horrible, crushing poverty with no options whatsoever then I think that could be considered a “success” in some sense of the word.

Cheers.

“If all you do is to allow industrial capitalism to pick itself up, dust itself off and start all over again what is the point?”

I would think the point is that, had you prepared for a crash, you might be around to see the next bout of industrial capitalism, or whatever comes next anyway.

Hopefully we won’t be as hell-bent on destroying ourselves by sacrificing long-term stability for short term comforts, but I don’t really have that much faith based on the past performance of our species…

@rcmacl,

Curious why you think “giving” people more money will make anything better? Printing a whole bunch of money doesn’t grow more crops, put more precious metal in the Earth (or extract it), create any additional fossil fuels or other energy sources, etc. All it does is give more people money to chase consumables (e.g. food, water, energy) and drive up the prices, as well as devalue any of the debts they would pay off at the expense of the lender.

And while I’m no friend of the banks, to be fair, the money isn’t being “given” – it’s being lent to them at outrageously low interest rates. There might not seem like much of a difference, but given Nicole’s discussions on debt vs. money in the past I think there’s a huge difference in so much as debt needs to be paid back (or defaulted on).

As far as investing in more economically productive activities – what would those be? We’ve lived through a decades-long consumption glut, and if there were still economically good investments out there I’m pretty sure people would be making them (instead, they either gamble on the markets or shun the markets altogether – consider the number of investment and/or hedge funds closing up and returning their capital to their investors given that they can’t see any worthwhile investments in the economy anymore).

Again, perhaps I’m being overly critical of Keen and his debt jubilee. I haven’t watched this video yet (will try to soon; holiday season is so busy!), but every other video I’ve watched where he’s proposed it as a solution has always seemed (to me) to be his biggest stumbling block. He speaks so knowledgeably about the problems we’re currently facing, but when discussing debt jubilee it always comes across as wishful thinking, as none of the concerns I’ve raised above tend to be discussed in any great detail.

Cheers.