Tue, 01 Jan 2013
Austerity?

John Lancaster has a piece in the London Review of Books called Let’s call it failure. He looks at the poor state of the UK public finances, the bad state of the economy and how things are going from bad to worse. Not exactly as planned.

Lancaster wrote a book a few years ago called Whoops! about the 2008 financial crash (or as he points out the Chinese preference to say "Western Financial Crisis") and he returns to the subject here. It makes a fairly depressing read, but this is economics and the whole edifice of Economics is a sorry state of affairs.

One of the presents I received at Christmas was a book called Debunking Economics by Steve Keen, an economist well known for predicting the recent calamities and being generally ignored (by most). The book's a dead-tree edition and on my "to read" pile (I have read some). The more I read about this field the more I consiider it eminently worth "debunking", seeing it as mostly bunk. Economics wants to be seen as a science, even something like Physics but it is far from a science and doesn't seem to work. Especially the macroeconomic realm - the big questions. Is Keynes right after all? Or less wrong?. Like the Queen said: Why did no one see it coming? Well, I think I know the answer to that.

If you have ever wondered what the economic term multiplier means then Lancaster's essay explains it well. Good explanations are in short supply, so more is welcome.