All those who think Keynes is dead (and those who merely wondered what happened to him) should check out the website of George Soros’s Institute for New Economic Thinking (INET). A remarkable range of economic luminaries are presented on video and powerpoint, most or all of them arguing for a radical Keynesian solution to the financial crisis, in the form of an expansion of public spending, mainly focused on remedying the accumulated social deficit of the last few decades, for instance affordable housing and transport infrastructure.
The current austerity policies being pursued by European politicians and advocated by US Teabaggers will fail, and once they do fail, it will be an end to ‘business as usual’.
It may also be an end to politics as usual, depending on how corrupt the current political party systems are seen to be by that time.
Some of the presentations are a little academic, but most of the ones that I have seen could be grasped by the intelligent ordinary viewer. I would recommend people to start with the video presentation and powerpoint of Richard Woo, which can be found on the link at the first INET conference, held at King’s College Cambridge in April 2010.
One thing that comes across as remarkable is how radical even mainstream public servants, such as the British chief financial regulator Lord Turner, now sound compared to local equivalents such as Bollard and Brash. Turner calls for a serious wing-clipping of the real estate sector, which he describes as being behind “every” banking crisis in recent memory, in the sense that that bank lending drives up the values of real estate assets and at the sime time drives the banks to over-extend themselves in a largely unproductive sector. According to Lord Turner, the real challenge is to break the bank / real estate nexus. And that’s the cautious civil service view!
In effect, it seems that a Gorbachev moment has now come to the heartlands of neoliberalism, while New Zealand remains a kind of East Germany by comparison.