Debunking Economics - the podcast

The global share market has always been dominated by the US, now we’re seeing a number share of very large tech companies claiming a larger slice of that pie. Even though they are trading with price to earnings ratios well beyond the historic average, these companies won’t fail. They dominate the market, with billions of customers, low production costs, a low number of workers and the sp...

Labour has romped to victory in the UK and they need to get cracking on all their election promises. One of those is the creation of Great British Energy. Keir Starmer points to the number of foreign interests owning energy generation in the UK. But, as Phil highlights this week, foreign companies are also heavily invested in energy distribution and retailing. The National Grid is suffering from a...

In the UK the proportion of the population aged over 65 has grown from 16 percent in 2000 to over 19% today. It’s a similar story throughout the western world as the population ages. That’s seen as an enormous liability for governments who will have to pay out pensions to their old folk. Hence the drive to get people to put money into private schemes. In the UK there’s over £2.2 trillion tied up i...

Carla Denyer and Adrian Ramsay recently launched the Greens Manifesto in the run up to the UK election. Phil and Steve discuss it on this week’s podcast and conclude the one thing that seems to have slipped down the priority list, is all the green stuff. They talk about fixing broken Britain, like every party, and correcting wealth inequality. They also promise that their ideas are fully costed, a...

The UK election debate changed tune when Nigel Farage agreed to stand for Reform, promising to cut migration and rid the UK of all the problems these nasty foreigners are responsible for. Elsewhere the recent European Union elections saw a sharp shift to the right, again driven by concerns over migration. If Donald Trump wins again in the US at the end of the year that too will be gained on a...

Imagine if Keir Starmer, the UK Labour leader, had said, let’s not get too obsessed with government debt. If we go down that road we won‘t be able to provide the public services we need, our infrastructure will crumble further and we’ll simply see the country’s productivity erode further by the day. Unfortunately, he didn’t say that. Instead, he has pledged himself to the temple of fiscal responsi...

There’s been a debate brewing post-pandemic about how much inflation has been elevated by companies increasing their margins. The evidence of that is the increased profits, not just in the tech sector, which has helped increase the share prices of these companies, evidenced by record levels across the US share market indices. This week Steve Keen says its clear that is happening. Even before the p...

The UK is heading to the polls on July 4th and the Conservative Party is heading for annihilation. Yet, when it comes to espousing sensible ideas from textbooks, Rishi Sunak had the making of a good Prime Minister. For example, tackling productivity by building the necessary infrastructure, investing in education and building cities and regions where businesses could cross pollinate their expertis...

Steve is on hols this week, so Phil takes a look back at a couple of Debunking Economics podcasts from just before Donald Trump took office. In many ways he stuck to his promises. He tried to cut immigration, he introduced protectionism with hefty tariffs on China and he cut taxes. Now he’s promising more of the same, although Biden might have beaten him to it when it comes to heftier taxes on Chi...

Should we tax wealth more? The UK’s Shadow Chancellor Rachel Reevs wouldn’t be drawn o the question at an FT forum recently. She said the UK is already a high taxing country. But around the world the wealthy are getting wealthier. Is that a bad thing? Some would say that if they are making money creating growth for the economy, then why would you want to stop them. Jeff Bezos, for example, ma...

UK Labour leader Keir Starmer has said if he wins the next general election, within 5 years he will have re-nationalised Britain’s railways. Phil asks Steve whether it naturally follows that this will lead to an improvement in services and lower fares? Steve reckons you any need to look at government run services elsewhere in Europe to answer that question – but Britain’s trains weren’t so great e...

The new industry is struggling to survive, with far reaching consequences on public accountability and democracy. Steve says part of the problem could have been fixed with a suitable micropayments system, so readers could consume articles without subscribing to papers in full. Phil’s not so sure, pointing to the fact that an increasingly large proportion of the population is not consuming new...

There are two types of people who buy gold. Speculators who see it as a risk-adverse asset class to buy when other investments look a little shaky. There are also those who hold onto gold because they believe paper money has no intrinsic value and is therefore susceptible to collapse. Zimbabwe, who’s paper currency has been undergoing decades of increasing worthlessness, is now being replaced by a...

Sadly for Donald Trump, America seems to have been doing quite well in his absence. It has weathered the pandemic and inflation better than most. GDP pr capita is rising faster than most places and consumer spending is on the up. In fact, the main reason the Federal Reserve isn’t cutting rates is because the economy is doing so well they don’t see the need for a sudden change. But there are lots o...

For a while now Dr Edgar Feige has been a proponent of an automated transactional tax. The idea is that we get rid of all taxes – income tax, sales tax, corporate tax, excise, capital gains, import and export duties, inheritance – and replace it all with a tax on all transactions Every transaction, which can be easily identified through bank accounts, has a very small tax on it. Phil and Steve dis...

There’s been a lot of speculation lately about the role of immigration and its impact on inflation. Does a flood of foreign workers push down wages, which contains cost and keeps prices down? Conversely, did the low immigration levels post-COVID add to the wage pressures because, combined with sickness from COVID, there were a lot less people for every job vacancy. It sounds sensible, but Steve be...

The Bank of Japan has just lifted interest rates for the first time in 17 tears. The central bank has kept rates in negative territory in the mistaken belief that it would encourage banks to lend an people to borrow, helping to boost their flagging economy. Steve Keen says it’s based on the mistaken belief that banks lend money from their reserve accounts. They believed that by charging to hold on...

One analogy that economists like to use is that of the Capitol Hill Babysitting cooperative in Washington DC in the 1970s. Government workers set-up a babysitting group, where they to it in turns to babysit each other’s children, so they could enjoy nights out without paying for childcare. There were quite a few on the group, so payment was formalised through the issuance of scrip. Economists like...

The UK Chancellor Jeremy Hunt delivered what is almost certainly his last budget, promising the usual stuff – more investment, more jobs, better public services and lower taxes. And, miraculously, all of this will be achieved by lowering government spending. Despite the rubbery figures, Steve Keen argues that the budget ignores the key principle, that you can’t increase GDP if the government is cu...

The UK Debt Office has started selling bonds to retail investors through the primary market Previously the only way you could buy government bonds was through financial institutions, through ETFs, for example. The reason giving for opening it up to consumers is that it will allow them to “contribute more significantly to meeting the overall financing requirement”. Hat makes it sound like they are...

Elon Musk has his fingers in many pies. Social media, space travel, internet access, AI. Even tunnel drilling. He’s grown from developing a modest series of online city guides, to being one of the richest men on the planet. Is he a genius, or simply a Trumpesque style wheeler and dealer? This week phil – not a big fan – asks Steve – massive fan – whether Elon Musk is actually good for humanity. It...

The concept of American Exceptionalism has been talked about for decades, mainly by Americans. Now the term is back in vogue because the US has shown the fastest recovery from the pandemic and subsequent inflation. It’s also a period of intense speculation in US shares, driven by phenomenal rises in the value of big tech stocks. Is this something the rest of the world should be worried about. Is A...

Rishi Sunak, like most politicians, is adamant that he can grow the economy by getting businesses to be more productive. But can businesses really grow the economy by themselves, if the government just gets out the way? You might think that by employing more people, or creating more widgets, you are helping the economy. But there’s one big constraint, which is how much money you have to spend. Wit...

Have central banks waited too long before dropping interest rates. Over the last week or so we’ve had Jerome Powell, the Governor of the Fed, saying inflation is coming down but they want to see more data before they’re convinced enough to drop rates. The Bank of England’s Andrew bailey said pretty much the same thing. And the ECB. But, as Phil and Steve observe this week, whilst we wait bank loan...

Yanis Varoufakis joins Steve nd Phil this week to talk about the thinking behind his new book technofeudalism. The ‘cloudists, as he calls them, aren’t operating in the market, they have replaced the market. They learn from us tell us what we want to buy and then sell it to us. Their capital is the algorithm they have developed, but also the information we provide in the records of our behaviour a...