Saturday 27 May 2017

Steve Keen is backing Jeremy Corbyn and the Labour Party

The economist Steve Keen is backing Jeremy Corbyn and the Labour Party. This is big news because he was one of the only economists to predict the global financial sector meltdown.


Steve Keen was one of the only economists to accurately predict the global financial sector meltdown in 2007-08. Of course a lot of people could see that the housing bubble was creating unsustainable amounts of private debt, but Keen was one of the few who used this information to accurately predict the way that the global economy would collapse.

Here's a paper he wrote in 2006 almost a year before the sequence of bank failures started in 2007. He concluded that the state of debt and the ever increasing debt service burden meant that a recession would be unavoidable.

In hindsight he was absolutely right, but at the time he was derided as a scaremongerer and a crank for the "crime" of predicting the financial crash that the mainstream economics profession absolutely refused to see until the economy actually started imploding around them.

I don't know if you've ever been in the position where you're trying to alert people to the danger, and they just laugh at you and deride you. It takes bravery and great strength of character to keep swimming against the tide and standing up for what you believe in under such circumstances.


In an interview with Mark McGowan Keen explained why he was backing Labour. He's particularly enthusiastic about the proposed financial transaction tax, describing it as a tax that can't be evades by means of complex offshore structures, because every time they sell a product, they'll face a transaction tax.

Keen also praised Corbyn for the policies of rail renationalisation, properly funding the NHS, and scrapping student fees, saying the policies mean that Labour is no longer Tory-lite, but "a real social democratic alternative" that could finally break the ruinous neoliberal political hegemony that has ruled since the rise of Thatcher in 1979.

Another think that Keen noted was the vicious anti-Corbyn bias of the mainstream media and the elitist Westminster political establishment for proposing the kinds of policies that are taken for granted in plenty of other western economies, such as nationalised rail (France, Netherlands, Japan, Italy, Ireland ...), a publicly owned national grid (Denmark, New Zealand, Sweden, even Texas!), a publicly owned mail system (Canada, Switzerland, Belgium, Finland) and a national investment bank/sovereign wealth fund (Norway, Singapore, Australia, South Korea).

Watch the interview here:
Steve Keen's book "Debunking Economics" features on my list of recommended reading for those who want to learn more about economics.

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