Trevor Cook on public relations, social media and politics

Steve Keen beats the debt drum, again

June 11, 2009 – 8:58 am, by Trevor Cook

Keen, an academic from UWS, became a media darling last year by predicting the economic equivalent of the end of the world as we know it in the midst of the worst days of the GFC. The media lapped up his “its much worse than you think” message. Just how responsible it is to pour petrol on a burning house is another matter. He was all over the place including on 60 minutes. He was a star. Since then things have settled down a little and the sense of panic has eased back a little, but not for Steve. He’s been banging on about the evils of debt for many years and he’s going to go on doing it as long as he can get a platform. So, he’s got another doom-laden piece in the Punch today (what’s that about rounding up the usual suspects), it’s a bit of a come-down from those heady days of national TV but there you go. This time he labours a rather tired farmyard metaphor. Oh, dear.

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One Comment

  1. 1
    Tom Mullin
    Posted June 14, 2009 at 7:21 pm | Permalink

    He’s not been the only one, there is actually a long list, all totally ignored in the late 90’s and early to mid 2000’s. But for some strange reason a lot of people cannot get it through their heads that the massive expansion of private debt, particularly in the 2000’s, spent on unproductive consumption and speculation has brought us all to our knees. And will keep us down for a long time as we deleverage.

    Pretty simply stuff actually.

    But this shows how the problem can be alleviated (not solved though) , by accelerated debt destruction to shorten the agony period.

    The comment “how responsible it is to pour petrol on a burning house” is a bit silly, what was he supposed to do? Keep his mouth shut. Bit like sitting on the Titanic and seeing the iceberg in the distance and saying “I don’t think I’ll tell anyone because it might alarm someone”.

    As for his current warnings, I personally think it is criminal to encourage young people into buying houses right now, just so everyone can make gobs of cash out of them. How are they going to fare with negative equity and unemployment. As responsible as giving drugs to kids.

    Does anyone really think we are going back to the days of ever (and exponentially) increasing debt and speculation and consumption again?

    And how pray tell is Oz going to pay its way in the future, with ever increasing oil imports, a rapidly rising population, lower and lower net agricultural exports and a declining manufacturing base? Oh, the Chinese will give us another credit card and we will just borrow another trillion or so?

    At least Steve is being honest and identifying the main issue that we have to deal with, instead of the Pollyanish outpourings of ‘green shoots’ and the “recession is over’ piffle. Comments like that from the RBA have zero credibility, given that as late as Dec 2006 they put out a paper saying that rising house prices (ie a speculative boom) was ok and all the new financial innovation meant that it could all be funded easily … 6 months later …. boom … the exploding type this time. Plus they compound their inanity by saying recently that speculative booms cannot be controlled (in which case they should all resign and shut up shop since they are clearly incompetent)!

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