A financial or economic crisis?

The debate among leftist economists has been on for some time.  Can the Great Recession be described as a financial crisis – namely that it was caused by instability and collapse in the financial sector and then spread to the rest of the capitalist economy? Or was the Great Recession caused by a crisis inContinue reading “A financial or economic crisis?”

Coalition cuts

The new coalition government of the Conservatives and Liberals is getting ready to impose the biggest cut in government spending since 1980s (under Margaret Thatcher’s regime).   Already, David Cameron has been preparing public opinion with the claim that Britain’s government finances are much worse than the previous New Labour government had claimed and that theContinue reading “Coalition cuts”

Economic recovery or a new recession?

Stock markets have fallen sharply during May, undoing all the gains for the year to date.  And stocks took another dive in June as the fear that the capitalist economic recovery was in jeopardy and the top 20 capitalist countries could slip back into a  new or ‘double-dip’ recession. What worries the stock market isContinue reading “Economic recovery or a new recession?”

The Keynesian answer: support the speculators

The other branch of mainstream economics apart from the neoclassical/monetarist school are the Keynesians.  They seem to have deserted the old ‘liquidity preference’ element of Keynesian theory for an explanation of this crisis, namely that money gets stuck in the financial sector as individuals hoard cash and banks do not lend it onto the realContinue reading “The Keynesian answer: support the speculators”

Vulgar economics in despond

Mainstream economics was nonplussed by the financial crash of 2007-8 and the subsequent Great Recession of 2008-9.  The doyen of the neoclassical school, Robert Lucas, confidently claimed back in 2003, that “the central problem of depression-prevention has been solved”.  And leading Keynesian, Oliver Blanchard, now chief economist at the IMF, told us as late asContinue reading “Vulgar economics in despond”

How the official strategists were in denial

Now that the Great Recession is over, we can review how successful the official leaders of capitalist economic strategy were in forecasting the financial crisis, in dealing with it when it came and what they learnt afterwards.  The answers are unsurprisingly depressing. Before 2007, no official strategist of economic policy forecast any crisis.  US FedContinue reading “How the official strategists were in denial”

The bankruptcy of mainstream economics

Apologies for not having any new posts for a while but I’ve been working on a paper covering the various arguments by different schools of economics to explain why the Great Recession of 2008-9 took place. What is revealing is that mainstream economics (and by that I mean the economic theories of the official strategistsContinue reading “The bankruptcy of mainstream economics”

Talking about the world

I’ve just done a radio interview with speakerscorner.net http://www.archive.org/download/MichaelRobertsOnTheBritishEuropeanAndWorldEconomy/070510speakers.mp3 It covers a range of topics: the UK election, the Eurozone crisis, the global debt crisis, the nature of the financial crisis, the bankruptcy of mainstream economics and whether economic recovery will last. Phew! Pretty much sums up my views on all the current issues. AppreciateContinue reading “Talking about the world”

Hanging by a thread

Back in early March, I posted a blog about the UK election (The British election – it’s the economy, stoopid!, 7 March 2010),  in which I argued that New Labour would be defeated in the general election expected in May.  New Labour under Tony Blair and Gordon Brown had presided over an economy that hadContinue reading “Hanging by a thread”