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Try Steve Keen for an economist who predicted the credit crunch. http://www.debtdeflation.com/blogs/

His book basically declares war on most other economists too: http://www.amazon.co.uk/Debunking-Economics-Revised-Expanded...

I'm very impressed but I'm always looking for counter arguments to my current understanding so if you know of any good critiques of his stuff I would be very interested.




Steve Keen is a heterodox economist(Circuit-ist I think) with close ties to MMT Modern Monetary Theory (born and raised on blogs). MMT intellectuals predicted the great recession, the European Crisis, and the Recession of 2001. I've become a believer. They are basically hyper-keynesians. The basic Tennats are 1) As a point of logic Government must spend dollars into existence(or loan out) before they can tax them back. 2) Therefore Fed Government funding is independent of taxation. 2) Taxation creates demand for currency and unemployment in the currency of record by definition. 3) Government is not funded by borrowing either. 4) Because of 1) 2) 3) Policy should be to proactively spend counter-cyclicly until economy reaches full capacity. 5) Banks create money ex-nihilio 6) Banks are effectively agents of government because of deposit insurance and membership in the Federal Reserve System.

Its pretty fascination stuff b/c MMT says that the mainstream has everything backwards.

http://moslereconomics.com http://neweconomicperspectives.org http://www.amazon.com/Currency-Economics-Modern-Monetary-ebo...


I think Keen would link himself to Keynes (the person and what he actually wrote) but disassociate himself from Keynesianism (the twisted version that is commonly discussed). He is a greater follower of Minsky though and trying to put a mathematical basis under his theories.

I don't recognise items (1), (2) or (3) or even (4) as such in his writing although I'm not sure they contradict it. (5) is very important and I think that he might say that (6) is the wrong way round and that the government is the agent of the banks at the moment!

His key issue is that debt (public and private) matters and that the rate of change in total debt is the main source of the booms and busts that we see.

His prescription for the current crisis is printing money but then to give it to the people not the banks or government (both of which we are doing now). People with debts would then be required to pay down the debts with the printed money and people without debts could keep and spend the printed money.

He also has some proposals for limitations on limitations on borrowing for property purchases (PILL) and one intended in preventing share speculation getting out of control too although I have my doubts about that one really as it seems impractical, abusable and has some potential negative effects too (Jubilee Shares). http://www.debtdeflation.com/blogs/manifesto/


Absolutely Agreed. One of the MMT founders ( Randal Wray) was a student of Minsky who himself was very anti-finance. My understanding is Steve Keen has changed some of his views based upon MMT literature. In these Video's you've got Steve Keen and MMT professors in the same room presenting to each other.

On point 6) the government has statutory control of the banks. Its just that the banks have captured the government. War-hawk generals getting control of our foreign policy would be the analog.

edit: video of steve keen with MMT profs http://www.youtube.com/results?search_query=steve+keen+scott...




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