Hosted on Acast. See acast.com/privacy for more information.
[00:00:02] [SPEAKER_00]: Wir bei Vertex wissen, dass die Geschwindigkeit des globalen Handels zunimmt, was eine Steuerverwaltung komplexer macht.
[00:00:08] [SPEAKER_00]: Und Ihre unternehmenseigenen Systeme sind nicht dafür ausgelegt, diese Steuerkomplexität zu bewältigen.
[00:00:14] [SPEAKER_00]: Hier setzen wir mit unserer Plattform an, die Continuous Compliance ermöglicht.
[00:00:19] [SPEAKER_00]: So erhalten Sie mehr Transparenz, mehr Genauigkeit und mehr Vertrauen in Ihre Steuerdaten.
[00:00:25] [SPEAKER_00]: Sie wollen mehr über Continuous Compliance erfahren?
[00:00:27] [SPEAKER_00]: Dann besuchen Sie vertexinc.com.de
[00:00:34] [SPEAKER_01]: During the pandemic, Americans were able to save more money because they were spending less, obviously, due to the lockdown restrictions.
[00:00:40] [SPEAKER_01]: New data from the Federal Reserve shows that excess money has now run out for most people.
[00:00:44] [SPEAKER_01]: When you look at the numbers by income, bank deposits and other assets for the bottom 80% of households
[00:00:49] [SPEAKER_01]: are lower this year than they were in March of 2020 when the pandemic began.
[00:00:53] [SPEAKER_02]: This is the Debunking Economics Podcast with Steve Keen and Phil Dobbie.
[00:01:00] [SPEAKER_04]: Well, it was blamed for inflation by many. The fact that consumers all over the world had so much extra money during the pandemic
[00:01:06] [SPEAKER_04]: because they couldn't spend it and that extra cash fuelled heavier demand for goods and particularly for services when lockdowns were over.
[00:01:13] [SPEAKER_04]: That demand outstripped supply. Buy a lot and prices went up as a result.
[00:01:17] [SPEAKER_04]: Now people have spent those savings. In fact, that is a CBS report from September last year.
[00:01:22] [SPEAKER_04]: And here we are a year later and inflation is still taking a long time to come down.
[00:01:26] [SPEAKER_04]: But what do we actually mean by savings?
[00:01:29] [SPEAKER_04]: And how can we have savings and debt at the same time?
[00:01:33] [SPEAKER_04]: And why would people choose to save rather than just pay down their mortgage?
[00:01:37] [SPEAKER_04]: And what is the difference between savings and investment?
[00:01:40] [SPEAKER_04]: So many questions this week. We'll look at all of them on the Debunking Economics Podcast.
[00:01:44] [SPEAKER_04]: It's me and Steve Keen. Welcome along.
[00:01:49] [SPEAKER_04]: So the average person in the UK has right now about £17,365 sitting in a savings account.
[00:01:57] [SPEAKER_04]: But a third of adult Brits have no savings whatsoever.
[00:02:00] [SPEAKER_04]: Possibly the sensible ones, actually.
[00:02:02] [SPEAKER_04]: Because why? You know, what's the incentive to save?
[00:02:05] [SPEAKER_04]: This is based on Bank of England data and is based on money deposited in savings accounts in banks or building societies
[00:02:10] [SPEAKER_04]: or in the government's own national savings and investment accounts.
[00:02:14] [SPEAKER_04]: Now, in July 2023, about $0.3 billion was deposited.
[00:02:18] [SPEAKER_04]: But during the height of the pandemic, when we were all in lockdown and we were getting fed money by the government,
[00:02:23] [SPEAKER_04]: well over $25 billion was deposited in those accounts.
[00:02:26] [SPEAKER_04]: But, you know, we're not really saving, are we, if we've got a hefty mortgage?
[00:02:31] [SPEAKER_04]: The average outstanding mortgage debt per household in the UK is £131,400.
[00:02:37] [SPEAKER_04]: So if you've got £17,000 sitting in a savings account, Steve, you can hardly call it savings when you've got £131,000 sitting in debt elsewhere.
[00:02:45] [SPEAKER_04]: And yet, here's the irony, people save as a buffer in case they lose the job.
[00:02:51] [SPEAKER_04]: And their buffer that they're talking about is being able to pay their mortgage.
[00:02:55] [SPEAKER_04]: So they are saving to pay off their debt.
[00:02:57] [SPEAKER_04]: How crazy is that?
[00:02:58] [SPEAKER_03]: You've got the whole thing in one nutshell there, mate, because, I mean, what you're saying is if you look at the average person and the average mortgage,
[00:03:07] [SPEAKER_03]: what was it, £17,000 in cash and £130,000 in a mortgage?
[00:03:13] [SPEAKER_03]: There are £110,000 in net negative equity.
[00:03:16] [SPEAKER_03]: And this is the situation we've been left in by decades and decades of austerity because of this myth about saving.
[00:03:25] [SPEAKER_03]: Because when we talk about saving, what we individually mean is the increase in the money in our bank accounts, or even better, the increase in our net financial worth.
[00:03:38] [SPEAKER_03]: So, like, if you're looking at what you said there, we had £110,000 of net negative worth and going to £100,000 of net negative worth would be a substantial improvement.
[00:03:49] [SPEAKER_03]: But individuals can save.
[00:03:51] [SPEAKER_03]: Societies can't.
[00:03:53] [SPEAKER_03]: And this is the dilemma.
[00:03:54] [SPEAKER_03]: Because if you decide, oh, I've got this huge mortgage account, I've got £130,000 I owe.
[00:04:00] [SPEAKER_03]: I've only got £17,000 in the bank account, so I'd better get some more money in my bank account.
[00:04:06] [SPEAKER_03]: So you spend more slowly on the rest of the economy so that you accumulate, let's say, an extra £1,000 over the year.
[00:04:15] [SPEAKER_03]: You will not change the amount of money in the bank, the aggregate in the bank accounts, one zotch.
[00:04:20] [SPEAKER_03]: You will simply slow down how fast the existing money circulates.
[00:04:23] [SPEAKER_03]: The only way you can increase the aggregate amount of money in those bank accounts above the level of debt is if the government runs a deficit, if the government spends more than it gets spent in taxation.
[00:04:35] [SPEAKER_04]: Or the bank gives you an even bigger loan, of course.
[00:04:38] [SPEAKER_03]: No, that'll make your bank account rise, but your debt will rise just as much.
[00:04:42] [SPEAKER_03]: So, you know, this is the error of thinking in a micro way about macro issues.
[00:04:48] [SPEAKER_03]: And that's what, unfortunately, mainstream economics, which think they've got to derive macro from micro, end up making that something that not just amateurs do, but so-called professionals as well.
[00:04:59] [SPEAKER_04]: So it used to be the case, didn't it, that, you know, we, particularly in Australia, you had offset mortgages.
[00:05:06] [SPEAKER_04]: And I used to love that because you basically were merging savings and debt into the one account, weren't you?
[00:05:12] [SPEAKER_04]: You're basically saying, well, don't bother saving.
[00:05:14] [SPEAKER_04]: Just try and bring your mortgage down that little bit faster.
[00:05:16] [SPEAKER_04]: Don't worry about a savings account.
[00:05:18] [SPEAKER_04]: But, of course, there's not a great deal of incentive for banks to do that.
[00:05:21] [SPEAKER_04]: So what would happen is with an offset account, you'd overpay your mortgage.
[00:05:25] [SPEAKER_04]: And then if you needed to buy another item, you could draw that back down.
[00:05:28] [SPEAKER_04]: But in the meantime, you've paid off the capital on your mortgage.
[00:05:31] [SPEAKER_04]: So, in effect, you know, you're drawing down your – you're paying off your debt that little bit faster.
[00:05:38] [SPEAKER_04]: So no need for a savings account in a situation like that.
[00:05:41] [SPEAKER_04]: But banks don't like that, do they?
[00:05:42] [SPEAKER_04]: Because, of course, they make more money by you having a separate account because they'll charge you interest on the loan and then they'll pay you less interest on the savings.
[00:05:50] [SPEAKER_04]: So actually more money ends up in the financial sector that way.
[00:05:54] [SPEAKER_04]: Well, specifically in the bank.
[00:05:55] [SPEAKER_03]: And this is what is one of the many real issues apart from the whole idea of the madness of individuals trying to save and therefore causing a collective increase in savings.
[00:06:05] [SPEAKER_03]: The point I was making in the previous example is it doesn't increase the amount of money.
[00:06:10] [SPEAKER_03]: And people trying to increase their bank accounts individually doesn't increase the total amount of money at all.
[00:06:17] [SPEAKER_03]: So if somebody's money goes up and there's no extra money created, the money of other people has to go down just as much.
[00:06:24] [SPEAKER_03]: So that's what – that's the inverse of what campaigns used to call the widow's cruise.
[00:06:30] [SPEAKER_03]: But the real problem is there's far too much money in the financial sector.
[00:06:35] [SPEAKER_03]: And this is all happening partly because we've got too much debt.
[00:06:40] [SPEAKER_03]: And what's our solution to it?
[00:06:42] [SPEAKER_03]: Buy non-financial assets, things like shares and houses, and hope their price is going to go up, and buy them using borrowed money, which means you have yet more debt created and yet more financial assets ending up in the financial sector where they do bugger all.
[00:06:57] [SPEAKER_03]: We far better off, we were spending this money on each other, like back in the happy days, 1950s, when people had much lower levels of debt and weren't worried about whether they could service or not, and most likely had monetary assets or financial assets exceeding their financial liabilities.
[00:07:14] [SPEAKER_04]: So what – I mean, if you look back, I saw a very old receipt from the 1970s, a shop receipt.
[00:07:19] [SPEAKER_04]: If you look in real terms, you know, things that you bought, apart from houses, which are horrendously more expensive now in real terms, everything else has really come down in real terms.
[00:07:32] [SPEAKER_04]: You know, we're paying a lot less for food, for TV sets, for electronic items, for sofas, anything you buy for the house.
[00:07:39] [SPEAKER_04]: Anything you buy, basically, is cheaper now in real terms than it used to be.
[00:07:44] [SPEAKER_04]: But that's completely compensated for by the fact that we spend many, many times more than we used to for housing.
[00:07:50] [SPEAKER_04]: So it's actually, you know, an example.
[00:07:53] [SPEAKER_04]: Everything's basically onto the finance sector because we are servicing debt for the very expensive houses that we've bought.
[00:07:59] [SPEAKER_03]: Yeah, this is the real problem.
[00:08:00] [SPEAKER_03]: We have to reduce the level of private debt.
[00:08:02] [SPEAKER_03]: That's come back to the real – the absolute anchor around the legs of people in the modern world is the level of private debt,
[00:08:13] [SPEAKER_03]: not the level of government debt.
[00:08:15] [SPEAKER_03]: And, in fact, if you wanted to – this is, you know, one of the points that modern monetary theorists make,
[00:08:21] [SPEAKER_03]: without necessarily knowing the equity issue that's involved, you know, net financial equity.
[00:08:27] [SPEAKER_03]: In the aggregate, the total sum of all financial liabilities is zero, financial liabilities and financial assets.
[00:08:35] [SPEAKER_03]: So if you have a financial asset and money in a bank account is a classic financial asset,
[00:08:41] [SPEAKER_03]: you add up the financial assets and financial liability in total, you get zero.
[00:08:45] [SPEAKER_03]: So if you want to have – that's because one person's asset is – one person's financial asset,
[00:08:51] [SPEAKER_03]: another person's financial liability.
[00:08:53] [SPEAKER_03]: So if the sum of all is zero, if sum of all is positive, the rest has to be negative.
[00:08:57] [SPEAKER_03]: Now, the desirable situation for the real world is that both the banks have to be in positive equity.
[00:09:05] [SPEAKER_03]: If they're not, then they're bankrupt.
[00:09:07] [SPEAKER_03]: That's the definition of bankruptcy for a bank.
[00:09:09] [SPEAKER_03]: A bank is bankrupt if its short-term liabilities exceed its short-term assets.
[00:09:14] [SPEAKER_03]: So they've got to be in positive equity.
[00:09:16] [SPEAKER_03]: That, therefore, means that the rest of the economy is in – must be in negative equity with respect to the banking sector.
[00:09:23] [SPEAKER_03]: And that, therefore, means the government plus the non-bank financial – the non-bank private sector,
[00:09:29] [SPEAKER_03]: which is you and me and corporations as well, they must be in negative equity compared to the banking sector.
[00:09:36] [SPEAKER_03]: The only way to get a situation where the non-bank private sector and the banks can both be in positive equity
[00:09:44] [SPEAKER_03]: is if the government's in sufficient negative equity.
[00:09:46] [SPEAKER_03]: And for that to happen, the government must run a deficit.
[00:09:50] [SPEAKER_03]: So the obsession about trying to get the government to not run a deficit is what's caused this situation,
[00:09:55] [SPEAKER_03]: as you're explaining with those numbers for the average Britain.
[00:10:00] [SPEAKER_03]: The average Britain is 100,000 in negative equity.
[00:10:04] [SPEAKER_03]: That means the positive equity is held by the banking sector and by the government,
[00:10:09] [SPEAKER_03]: which is why we have all the crazy behaviour we have now, borrowing and borrowing money to buy houses,
[00:10:15] [SPEAKER_03]: which ends up driving up the price of houses as well.
[00:10:18] [SPEAKER_03]: And making those who speculate on them potentially better off, making real estate agents better off and so on.
[00:10:25] [SPEAKER_03]: But in the aggregate, the private sector is suffering badly.
[00:10:29] [SPEAKER_03]: And the only solution is to stop obsessing about government deficits.
[00:10:34] [SPEAKER_04]: Well, of course, the reason we had so much savings during the pandemic sitting in bank accounts,
[00:10:40] [SPEAKER_04]: and curious that it supposedly was sitting in bank accounts rather than paying off mortgages,
[00:10:45] [SPEAKER_04]: but it was because the government did create a great deal of money.
[00:10:48] [SPEAKER_04]: Yeah.
[00:10:48] [SPEAKER_04]: And that went into people's bank accounts.
[00:10:50] [SPEAKER_04]: So all over the world, basically, we saw savings going up.
[00:10:54] [SPEAKER_04]: And that has been blamed.
[00:10:56] [SPEAKER_04]: I think it's probably overblown, but it will have been a contributing factor for inflation,
[00:11:01] [SPEAKER_04]: that people had more money than there was, you know, resources available to buy goods or services.
[00:11:07] [SPEAKER_04]: And so it was seen as being inflationary.
[00:11:10] [SPEAKER_04]: But that's the situation you've described.
[00:11:12] [SPEAKER_04]: The government spends money.
[00:11:14] [SPEAKER_03]: Yeah, the government, the cause of the inflation.
[00:11:16] [SPEAKER_03]: I mean, certainly the scale of the deficit was huge, and it was vital as well.
[00:11:20] [SPEAKER_03]: Without those deficits, people would have been unable to pay their rent, unable to pay their mortgages.
[00:11:25] [SPEAKER_03]: We would have had a financial collapse as well as those lockdowns.
[00:11:29] [SPEAKER_03]: But what that meant was the amount of apparent demand for goods and services was huge.
[00:11:35] [SPEAKER_03]: And, you know, there was something you couldn't buy.
[00:11:37] [SPEAKER_03]: You couldn't go on international trips.
[00:11:39] [SPEAKER_03]: You couldn't eat out at restaurants and so on.
[00:11:42] [SPEAKER_03]: But everything else was open slather.
[00:11:44] [SPEAKER_03]: And what that meant was there was a great encouragement for corporations to increase the markup they put on the cost of production to make their profits.
[00:11:52] [SPEAKER_03]: And when you look at the data, and I've seen it.
[00:11:56] [SPEAKER_04]: Because they could do, because people could pay, because they had so much money and not very much money to spend on it.
[00:12:01] [SPEAKER_04]: But it shows that it was implemented badly, though, doesn't it?
[00:12:04] [SPEAKER_04]: Because the fact that there was so much excess money.
[00:12:06] [SPEAKER_04]: After people had paid their mortgages off, they still had money to sit in their savings accounts.
[00:12:10] [SPEAKER_03]: Yeah, and this is because we've had 60 years of mainstream economy, neoclassical economists, taking over everything and learning nothing.
[00:12:18] [SPEAKER_03]: If you take a look back at the First World War, a similar thing happened back in the First World War.
[00:12:22] [SPEAKER_03]: There was a high level of inflation in World War I.
[00:12:24] [SPEAKER_03]: And the major reason was because of the increase in government spending for wars, which, of course, there's always enough money for a war.
[00:12:31] [SPEAKER_03]: With the increase in spending for a war, there was much more money in circulation.
[00:12:35] [SPEAKER_03]: That also led to people putting up markups during World War I.
[00:12:38] [SPEAKER_03]: And one thing that they did learn between World War I and World War II, when World War II began, and this is actually before it began in America in 1942, you have to take the date of them becoming involved in the war physically.
[00:12:52] [SPEAKER_03]: But they were financing Britain from 1939 on.
[00:12:56] [SPEAKER_03]: The government instituted a price control system.
[00:13:00] [SPEAKER_03]: And John Kenneth Galbraith played a major role in that, the non-Orthodox economist J.K. Galbraith.
[00:13:05] [SPEAKER_03]: And the whole idea was to persuade corporations for the war effort not to increase their markups.
[00:13:11] [SPEAKER_03]: So if you look at the rate of inflation in World War I, it was relatively large.
[00:13:15] [SPEAKER_03]: Look at the rate of inflation in World War II, crickets, almost nothing there.
[00:13:20] [SPEAKER_03]: So it was persuading corporations not to exploit the type of demand to put up their markups was a major reason why we didn't have inflation during World War II.
[00:13:29] [SPEAKER_03]: When we had a much larger level of government spending, the deficits were far higher during World War II than they were during COVID.
[00:13:37] [SPEAKER_03]: But it didn't lead to inflation.
[00:13:38] [SPEAKER_03]: And this comes back to the point that Isabella Weber makes, that it's the markups that have been the main driver of inflation, not rising wages.
[00:13:46] [SPEAKER_03]: And we really need to stop corporations exploiting that to increase markups, because that's been a major cause also with the dramatic increase in inequality in the last 20 years.
[00:13:57] [SPEAKER_04]: Well, it would be interesting, wouldn't it, if we didn't have those markups and we had a limited supply because goods just weren't available because of supply chains, but prices weren't going up as much because those prices were being controlled, then we would be spending less of the money that's been sitting in those savings accounts.
[00:14:13] [SPEAKER_04]: So what would we do with it?
[00:14:14] [SPEAKER_04]: I'd imagine we'd get to a stage where we say, well, OK, now I'm going to start to pay off some of my debt.
[00:14:18] [SPEAKER_04]: I'm going to drive my mortgage down.
[00:14:20] [SPEAKER_04]: You'd assume that would be the response.
[00:14:21] [SPEAKER_03]: Yeah, you'd hope so.
[00:14:22] [SPEAKER_03]: I mean, this is, again, this piece of data that I know, you know, painful level of awareness about it.
[00:14:31] [SPEAKER_03]: And mainstream economists wouldn't have a clue.
[00:14:33] [SPEAKER_03]: And that's at the level of private debt at the moment.
[00:14:36] [SPEAKER_03]: The aftermath of the great global financial crisis is still the highest in history, far higher than during the Great Depression or the 1920s.
[00:14:46] [SPEAKER_03]: Private debt is what's got us into the pickle we're in right now.
[00:14:49] [SPEAKER_03]: And yet everything, the mainstream economists completely ignore the role of private debt.
[00:14:54] [SPEAKER_03]: They almost encourage private debt.
[00:14:56] [SPEAKER_03]: It was like the Medigliano-Miller hypothesis that said a firm is better off if it has to pay tax on earnings, they're better off having 100% debt as opposed to 100% equity.
[00:15:06] [SPEAKER_03]: All this stuff is what's causing these situations of excessive price rises, no control of what corporations do, and a huge increase in inequality.
[00:15:17] [SPEAKER_03]: Because markups, this is quoting a piece of neoclassical work, and I intend doing a non-neoclassical comparative analysis at some point.
[00:15:26] [SPEAKER_03]: But there's a paper I've seen claiming that markups have gone from about 20% of the cost of production to 63% over the last 40 or 50 years.
[00:15:37] [SPEAKER_03]: So what we had during the COVID period was a period of excessive price gouging again.
[00:15:43] [SPEAKER_03]: Markups are just too high.
[00:15:45] [SPEAKER_04]: I wonder how much of that's the tech sector, though.
[00:15:46] [SPEAKER_04]: I wonder, you know, because where costs are very slight in comparison with the prices paid.
[00:15:53] [SPEAKER_04]: But irrespective, what a wasted opportunity.
[00:15:55] [SPEAKER_04]: If we'd gone into the pandemic saying, OK, we've got to pay people's mortgages.
[00:16:00] [SPEAKER_04]: We've got to put money into people's bank accounts.
[00:16:02] [SPEAKER_04]: It's very difficult for us to control whether it's going to go on mortgages or whether they really need it or not.
[00:16:06] [SPEAKER_04]: So we're just going to have to splash a lot of money into people's bank accounts.
[00:16:11] [SPEAKER_04]: What a shame at the time we didn't say, we didn't think, but we are aware that debt is a major problem.
[00:16:17] [SPEAKER_04]: If we could come out of this with debt coming down, that would be a big win.
[00:16:22] [SPEAKER_04]: And the way of doing that would be through price controls.
[00:16:25] [SPEAKER_04]: So we don't have inflation in prices from companies taking a higher margin.
[00:16:32] [SPEAKER_04]: If you had price controls there, so the price of everything stayed lower, inflation would be lower.
[00:16:36] [SPEAKER_04]: People would have more money to then pay off their debt.
[00:16:39] [SPEAKER_04]: That would be, you know, an engineered solution.
[00:16:41] [SPEAKER_04]: The whole thing was engineered.
[00:16:42] [SPEAKER_04]: The moment the pandemic hit, we were starting to play with the system as it was.
[00:16:47] [SPEAKER_04]: What a shame we didn't have the foresight to go down that road because we'd come out with less inflation and less debt.
[00:16:53] [SPEAKER_04]: Double win.
[00:16:54] [SPEAKER_03]: Yeah.
[00:16:54] [SPEAKER_03]: And more turnover of money as well.
[00:16:56] [SPEAKER_03]: The other thing which has happened with the rising level of private debt is individuals are motivated by that to spend less of their own money to try to reserve some of it for paying the mortgage off.
[00:17:06] [SPEAKER_03]: And what you get is a lower rate of turnover of money and therefore a lower GDP coming out of it.
[00:17:11] [SPEAKER_03]: So we're caught in a whole set of bonds that come out of having a fallacious model of money creation.
[00:17:16] [SPEAKER_04]: So the quick and dirty definition of savings often used by economists rather than those numbers I quoted, which is, you know, what is sitting in bank accounts.
[00:17:27] [SPEAKER_04]: And that can be misleading.
[00:17:28] [SPEAKER_04]: We'll look at that in the second part.
[00:17:30] [SPEAKER_04]: It's basically the definition of saving is what's left after household spending.
[00:17:34] [SPEAKER_04]: So take spending from household income.
[00:17:37] [SPEAKER_04]: The rest is savings.
[00:17:38] [SPEAKER_04]: I assume by that definition, the mortgage is part of household spending.
[00:17:42] [SPEAKER_04]: So the higher the mortgage, the less savings.
[00:17:45] [SPEAKER_04]: Direct relationship.
[00:17:46] [SPEAKER_04]: No.
[00:17:46] [SPEAKER_03]: In fact, it's another way around.
[00:17:48] [SPEAKER_03]: First of all, they include consumption and investment.
[00:17:51] [SPEAKER_03]: But the way the savings are defined in the national accounts is effectively the gap between, we've got exports and imports standing up there as well, of course.
[00:17:59] [SPEAKER_03]: But the definition of savings is the gap between output and consumption plus investment.
[00:18:06] [SPEAKER_03]: And now when you look at it, that is actually, they do not include the servicing of debt in the definition of consumption or of investment.
[00:18:15] [SPEAKER_03]: So what they're calling savings.
[00:18:17] [SPEAKER_04]: Even though for most people it's getting on for half of consumption.
[00:18:20] [SPEAKER_04]: It's ridiculous.
[00:18:21] [SPEAKER_03]: As a result, what they call a high rate of savings can actually mean a high rate of, you know, paying mortgage interest to the bank.
[00:18:28] [SPEAKER_03]: So.
[00:18:28] [SPEAKER_03]: Okay.
[00:18:28] [SPEAKER_03]: Take me through how that works step by step because I'm not quite following that.
[00:18:33] [SPEAKER_03]: The definition of consumption is, you know, goods and services you buy.
[00:18:37] [SPEAKER_03]: The definition of investment is goods and services you buy to build capital machinery.
[00:18:42] [SPEAKER_03]: When you sum those two up and you, let's just imagine we're looking at the whole global situation so we can leave out thinking of the exports and imports issue.
[00:18:51] [SPEAKER_03]: Then total output minus consumption plus investment is regarded as what people save.
[00:18:56] [SPEAKER_03]: It is not the financial definition that we, the individuals use and that they think economists also use, which is the increase in the level of bank accounts.
[00:19:05] [SPEAKER_03]: Because when you look at the aggregate level, if the government is not running so deficits, so the government runs a balanced budget, and if there's no bank lending, then the amount of money is constant.
[00:19:19] [SPEAKER_03]: So there's no change in savings, no savings as we define it in terms of increase in bank accounts.
[00:19:24] [SPEAKER_03]: So the macro definition is completely different to what people think about in terms of monetary ideas of saving.
[00:19:30] [SPEAKER_04]: Right.
[00:19:30] [SPEAKER_04]: But just clarifying that position before we do go to the break.
[00:19:34] [SPEAKER_04]: So if a country's got a particular level of output, you take out of that output, well, that has got to be equal to how much people are spending, they're buying from that output, plus how much is being invested.
[00:19:47] [SPEAKER_04]: And you're saying to build new machinery or whatever so that you can increase that output down the track.
[00:19:52] [SPEAKER_04]: But what you're saying is the cost of that investment, the cost of servicing that investment, which very often from an individual's point of view is their house, is not included in that sum.
[00:20:02] [SPEAKER_04]: Yeah, it's not measured as people think it's measured in terms of an increase in bank accounts.
[00:20:07] [SPEAKER_04]: Right.
[00:20:07] [SPEAKER_04]: And the gap is the savings.
[00:20:09] [SPEAKER_04]: So after you've done all of that, the only left over, that's counted as savings.
[00:20:11] [SPEAKER_04]: But that's not including the vast quantity of money that is being spent on mortgages.
[00:20:17] [SPEAKER_04]: So the higher the savings, it's not necessarily a good thing.
[00:20:19] [SPEAKER_04]: It could actually mean that mortgages are – people are spending more and more servicing their mortgage.
[00:20:23] [SPEAKER_04]: Yeah.
[00:20:23] [SPEAKER_03]: I've made a slight mistake in clarifying the consumption and investment issue, but we'll talk about that in the second half.
[00:20:29] [SPEAKER_03]: But the basic idea is there can be what the government can record as a huge increase in savings and absolutely no change in the amount of money in bank accounts.
[00:20:38] [SPEAKER_03]: Okay.
[00:20:39] [SPEAKER_04]: We'll explore that in the second part where I want to talk about the difference between savings and investments as well.
[00:20:47] [SPEAKER_04]: And are they the same thing, in fact?
[00:20:50] [SPEAKER_04]: Or are they interchangeable in some way?
[00:20:52] [SPEAKER_04]: We'll look at that.
[00:20:52] [SPEAKER_04]: And when we come back on the Debunking Economics podcast with Steve Keane, I'm Phil Dobby.
[00:20:57] [SPEAKER_04]: Back in a moment.
[00:20:58] [SPEAKER_02]: This is the Debunking Economics podcast with Steve Keane and Phil Dobby.
[00:21:08] [SPEAKER_04]: Okay.
[00:21:09] [SPEAKER_04]: We are looking at savings because apparently we had a lot of it during the pandemic.
[00:21:13] [SPEAKER_04]: We've got less of it now.
[00:21:14] [SPEAKER_04]: We heard in the introduction that in America they've spent all their savings, basically.
[00:21:17] [SPEAKER_04]: And they've got less money saved now than they had before the pandemic.
[00:21:21] [SPEAKER_04]: But, of course, we've all still got hefty mortgages.
[00:21:23] [SPEAKER_04]: So, really, we're all, you know, net worse off.
[00:21:26] [SPEAKER_04]: So, we can talk about savings.
[00:21:28] [SPEAKER_04]: But, really, we are largely in debt unless we've paid off our mortgage.
[00:21:32] [SPEAKER_04]: So, if I have money left over, Steve, and I invest for my retirement, is that a savings?
[00:21:40] [SPEAKER_04]: Is that counted as savings?
[00:21:41] [SPEAKER_04]: Or is that an investment?
[00:21:43] [SPEAKER_04]: Or are the two interchangeable?
[00:21:44] [SPEAKER_04]: Because I gave numbers at the beginning.
[00:21:46] [SPEAKER_04]: There was money that was sitting in savings accounts, which is, you know, the numbers that
[00:21:51] [SPEAKER_04]: the government or the Bank of England quotes.
[00:21:54] [SPEAKER_04]: But that's only part of the picture.
[00:21:55] [SPEAKER_04]: There'll be, you know, a load of people who will say, well, I have got savings.
[00:21:58] [SPEAKER_04]: But, actually, they're sitting in investment funds or in pension funds, for example.
[00:22:03] [SPEAKER_04]: They're savings, aren't they?
[00:22:04] [SPEAKER_04]: They're money I'm not spending now.
[00:22:05] [SPEAKER_04]: That's a saving.
[00:22:06] [SPEAKER_04]: But it's also an investment.
[00:22:07] [SPEAKER_04]: Yeah.
[00:22:07] [SPEAKER_03]: It's putting money inside the financial sector.
[00:22:09] [SPEAKER_03]: Coming back to the point I stuffed up in the first part.
[00:22:13] [SPEAKER_03]: The definition…
[00:22:14] [SPEAKER_04]: Have another crack at it, Steve.
[00:22:15] [SPEAKER_03]: Okay.
[00:22:16] [SPEAKER_03]: If you live out the international trade and government, the definition of our output is
[00:22:21] [SPEAKER_03]: consumption plus investment.
[00:22:23] [SPEAKER_03]: Then you look at what people consume.
[00:22:26] [SPEAKER_03]: You say they either consume or they're in income and they don't consume.
[00:22:31] [SPEAKER_03]: You subtract consumption from investment.
[00:22:33] [SPEAKER_03]: And that's what you say is savings.
[00:22:35] [SPEAKER_03]: And that is accountingly equal to the level of investment.
[00:22:38] [SPEAKER_03]: And the neoclassical perspective is to argue that savings are what causes investment.
[00:22:43] [SPEAKER_03]: So if people consume less, they'll save more.
[00:22:45] [SPEAKER_03]: Therefore, investment is higher.
[00:22:47] [SPEAKER_03]: That's the mainstream way of thinking.
[00:22:49] [SPEAKER_03]: Now, in fact, it's…
[00:22:50] [SPEAKER_03]: Kane said it's often the other way around.
[00:22:52] [SPEAKER_03]: If you have people consuming less, firms will decide to invest less because they expect less
[00:22:56] [SPEAKER_03]: profits in the future.
[00:22:58] [SPEAKER_03]: And an attempt to increase savings by reducing consumption will actually reduce the level of
[00:23:03] [SPEAKER_03]: economic activity.
[00:23:04] [SPEAKER_03]: It won't increase it.
[00:23:04] [SPEAKER_03]: But the point…
[00:23:06] [SPEAKER_03]: We confuse monetary savings, which is changing the level of aggregate bank accounts, with the way it's actually defined in macroeconomics, which leaves out the banking sector completely.
[00:23:19] [SPEAKER_03]: And this leads to a huge part of the confusion that people suffer from when they try to understand how do you cause investment to occur in an economy.
[00:23:29] [SPEAKER_04]: Yeah, because the argument about savings, the conventional thinking is that if lots of people save, then there's all that extra money that is available then for being used to invest in stuff.
[00:23:42] [SPEAKER_04]: And if there's more of that money that's available, then that means that people are going to pay a lower interest rate for that money because there's so much more of it.
[00:23:51] [SPEAKER_04]: So more savings equals more opportunity to invest.
[00:23:56] [SPEAKER_04]: Companies will pay lower interest rates because there's more cash.
[00:23:58] [SPEAKER_03]: And that's exactly loanable funds, and it's completely wrong.
[00:24:01] [SPEAKER_03]: That's the vision that mainstream economics has, that basically what you don't consume is invested.
[00:24:07] [SPEAKER_03]: Therefore, a higher level of saving leads to a higher level of investment.
[00:24:10] [SPEAKER_03]: What actually, in the real world, consumption is a major form of income for corporations.
[00:24:17] [SPEAKER_03]: If they see consumption fall, they see their incomes fall, and they're less likely to undertake investment, which will often, when you look at a major factor in what actually enables investment to occur, it's borrowing from banks.
[00:24:29] [SPEAKER_03]: I find it quite remarkable when I read the economic literature show that some of the worst reactionaries in terms of economic theory have done some of the best empirical work, and that empirical work undercuts their own theories.
[00:24:42] [SPEAKER_03]: So there's a pair of authors called Fama and French who played a major role in popularizing what's known as the capital assets pricing model.
[00:24:51] [SPEAKER_03]: And the capital assets pricing model says you don't need to worry about debt.
[00:24:55] [SPEAKER_03]: Forget about debt.
[00:24:57] [SPEAKER_03]: It's not a major issue.
[00:24:58] [SPEAKER_03]: In fact, debt's better than equity.
[00:24:59] [SPEAKER_03]: And they then argued that firms basically finance themselves from net present value of future earnings.
[00:25:09] [SPEAKER_03]: But what they would ultimately assert is that the level of debt is unimportant.
[00:25:16] [SPEAKER_03]: Then when they did the empirical work, they found that the element that was most associated with investment was rising levels of corporate debt.
[00:25:24] [SPEAKER_03]: So corporate debt was the main source of investment.
[00:25:27] [SPEAKER_03]: Now, if you have individuals trying to save more money, therefore, they're not buying goods and services much so consumption falls, the response of the corporate sector will be to borrow less, to invest less.
[00:25:43] [SPEAKER_03]: So you get less investment coming out of that, not more, which is the opposite of what the mainstream takes.
[00:25:50] [SPEAKER_04]: So when banks create money by giving loans to those companies, that's not impacting the savings of individuals because they're not putting money aside in savings, which then gets supposedly invested in those companies.
[00:26:05] [SPEAKER_04]: That's in addition.
[00:26:06] [SPEAKER_04]: The consumers have still got their money to spend.
[00:26:08] [SPEAKER_04]: It's not going to companies because the companies are using money that comes from banks.
[00:26:14] [SPEAKER_04]: So that's the ideal scenario where companies can grow because consumers have more money to spend buying the things that those companies are producing.
[00:26:24] [SPEAKER_04]: If you were to say, well, we're going to save and that money, that saving is going to be used to fund those companies, then they have less money to spend.
[00:26:32] [SPEAKER_04]: Therefore, the companies are less interested in investing because they haven't got as big a customer base.
[00:26:37] [SPEAKER_03]: That's the real dynamic.
[00:26:39] [SPEAKER_03]: And it's quite obvious.
[00:26:41] [SPEAKER_03]: If people decide to try to save more, they're spending less.
[00:26:46] [SPEAKER_03]: There's less profit for corporations.
[00:26:48] [SPEAKER_03]: They're going to invest less.
[00:26:49] [SPEAKER_03]: So it's the opposite of the causation taught in mainstream economic theory.
[00:26:53] [SPEAKER_03]: But unfortunately, this simplistic supply and demand way of thinking dominates political discourse.
[00:27:00] [SPEAKER_03]: It dominates what journalists normally think as well.
[00:27:02] [SPEAKER_03]: So we end up continuing having low growth and think, oh, what's wrong?
[00:27:06] [SPEAKER_03]: We better save more so we can grow more next year.
[00:27:10] [SPEAKER_03]: It's the old classic argument that Einstein once made.
[00:27:13] [SPEAKER_03]: The definition of stupidity is doing the same thing every time and expecting different results.
[00:27:18] [SPEAKER_03]: We've just had a low level of economic productivity and growth because we're trying to save too much.
[00:27:24] [SPEAKER_03]: Right.
[00:27:24] [SPEAKER_04]: And that is either just saving to put into bank accounts, but probably putting it into pension funds and other vehicles like that.
[00:27:34] [SPEAKER_04]: The interesting thing is, though, and this just demonstrates how wrong it's going, more and more companies are not borrowing from banks in various parts of the world, particularly in Europe.
[00:27:47] [SPEAKER_04]: They're tapping private credit, which is the pension funds and the like, saying, well, we'll give you a loan because we'll give it quicker than a bank.
[00:27:58] [SPEAKER_04]: And, you know, and that is becoming a common way, you know, either directly through private credit or those companies issuing bonds.
[00:28:07] [SPEAKER_04]: The moment those companies are issuing bonds, then, you know, they're taking it's, you know, they're not no new money is created in that process, is it?
[00:28:15] [SPEAKER_04]: It's not like they are borrowing from a bank and new money is created.
[00:28:18] [SPEAKER_04]: If you issue a corporate bond, then somebody is buying that bond with money which is already in circulation.
[00:28:24] [SPEAKER_04]: And if it's a consumer, that's money they're not going to spend.
[00:28:26] [SPEAKER_04]: So we've created this situation where we're relying less and less on banks to provide the credit and more on funds and individuals.
[00:28:34] [SPEAKER_04]: And so we are exactly in that scenario where you're describing, and it just seems to be getting worse.
[00:28:38] [SPEAKER_03]: It is getting worse.
[00:28:39] [SPEAKER_03]: And like, it is frustrating to watch because when you look back and see when with the golden age of capitalism was back in the 1950s and 60s, when we had extremely low levels of private debt.
[00:28:50] [SPEAKER_03]: And the reason we had low levels of private debt is we had high levels of private debt during the 1920s, the bust of which caused the 1930s depression.
[00:28:58] [SPEAKER_03]: That led to the rise of fascism.
[00:29:00] [SPEAKER_03]: That led to the Second World War.
[00:29:02] [SPEAKER_03]: After that, people were totally scarred about the idea of private debt, and it was extremely low.
[00:29:08] [SPEAKER_03]: And with that low level of private debt, people weren't worried about having to service their debt.
[00:29:12] [SPEAKER_03]: They weren't trying to save money in their individual accounts.
[00:29:15] [SPEAKER_03]: They were spending what they had because they were spending what they had.
[00:29:18] [SPEAKER_03]: There was circulation of money causing high levels of income.
[00:29:25] [SPEAKER_03]: And the spending, what leads to income is not saving but spending.
[00:29:29] [SPEAKER_03]: And now what we have with the neoclassical religion has come back in again, 50 or 60 years of textbook economics.
[00:29:35] [SPEAKER_03]: And we're back to the belief that if you save, that causes investment.
[00:29:38] [SPEAKER_03]: And that's one reason why we're not growing.
[00:29:40] [SPEAKER_03]: And yet we've got a banking sector which exploited people's desires for rising asset prices by lending money for mortgage speculation and back in the 80s for shares market speculation.
[00:29:53] [SPEAKER_03]: We've got this enormous level of private debt.
[00:29:54] [SPEAKER_03]: And the banks don't want to lend any more than anybody else, but they're sitting on a very nice pile, thanks very much, which we're all paying interest on.
[00:30:01] [SPEAKER_04]: Right.
[00:30:01] [SPEAKER_04]: So, yes, the traditional idea is, isn't it, savings equals investment equals growth, whereas actually savings equals less spending equals dormant economy, which is –
[00:30:12] [SPEAKER_04]: Yeah.
[00:30:12] [SPEAKER_04]: Yeah.
[00:30:14] [SPEAKER_04]: And yet the companies are the ones making this decision very often.
[00:30:17] [SPEAKER_04]: They're the ones who are issuing these bonds.
[00:30:18] [SPEAKER_04]: They're not going to banks.
[00:30:19] [SPEAKER_04]: So, they're actually creating their own worst enemy in that situation.
[00:30:24] [SPEAKER_03]: This is actually a factor of how banking has changed over time, though.
[00:30:28] [SPEAKER_03]: The beginning of the argument that banks create money by loans, you can date it right back to the banking school back in the 1800s.
[00:30:36] [SPEAKER_03]: But in terms of a modern expression of that was Basil Moore, the Canadian post-Casian economist in the late 1970s.
[00:30:44] [SPEAKER_03]: And what he looked at at that stage was creation of money by corporations having what are called lines of credit.
[00:30:53] [SPEAKER_03]: A large company like General Motors or even back if it existed back in those days, Tesla or Toyota and so on and so forth, would negotiate what are called lines of credit with a large number of banks, not just a single bank, but a large number of banks.
[00:31:08] [SPEAKER_03]: And they might have like a billion dollars.
[00:31:10] [SPEAKER_03]: And it's effectively having a credit card with a billion dollars of headroom on it, and you haven't accessed any of the money.
[00:31:15] [SPEAKER_03]: And then when you have to spend something, if there's an increase in oil prices or an increase in wages, you didn't have to go and ask the bank for a loan.
[00:31:22] [SPEAKER_03]: You simply accessed a part of the quote-unquote corporate credit card.
[00:31:27] [SPEAKER_03]: Now, that ended up being quite – not as profitable for banks as they would have liked over time.
[00:31:33] [SPEAKER_03]: So, what they've done is lines of credit almost disappeared.
[00:31:36] [SPEAKER_03]: And what is – instead, when corporations need the money to pay short-term things now like wages and supply costs and so on, they issue short-term corporate bonds, 30-day bonds.
[00:31:46] [SPEAKER_03]: So, the corporate – the paper.
[00:31:50] [SPEAKER_03]: And they're bought by pension funds and the like.
[00:31:51] [SPEAKER_03]: Yeah, yeah.
[00:31:52] [SPEAKER_03]: And so, that's – that therefore – that's one reason the 2008 crisis was so drastic, because Lehman Brothers had actually cornered that market and the corporate bonds market, the short-term bonds.
[00:32:05] [SPEAKER_03]: And when they failed, so did the structure for the market.
[00:32:08] [SPEAKER_03]: And that's why Lehman Brothers is such a destructive failure.
[00:32:11] [SPEAKER_03]: But really what banks should be doing is providing working capital for corporations, which is what lines of credit work.
[00:32:17] [SPEAKER_03]: That's what they should be doing.
[00:32:19] [SPEAKER_03]: They would think it was not as profitable as providing money for housing bubbles, and that's what they do.
[00:32:23] [SPEAKER_03]: Right.
[00:32:23] [SPEAKER_04]: Right. So, it all does, though, get down to the fact that we are all so keen to save more and more money, to have that security for our future, that we invest money.
[00:32:34] [SPEAKER_04]: We save money in pension funds.
[00:32:37] [SPEAKER_04]: We'll spend a lot of money on pension funds while not paying down our debts faster on our mortgage because they're separate things, even though it's, you know, one outbalances the other.
[00:32:47] [SPEAKER_04]: Unless we think, well, okay, we'll sell off our house faster and then we'll sell our house and we'll live off that for the pension.
[00:32:52] [SPEAKER_04]: But most people want to stay in their house.
[00:32:54] [SPEAKER_04]: So, they will slow down the speed at which they pay off their mortgage to speed up the amount of money that they put into a pension fund.
[00:33:01] [SPEAKER_04]: And that money in those pension funds is that money that's doing exactly what we're talking about.
[00:33:06] [SPEAKER_04]: It's being used to fund companies to grow rather than going to banks.
[00:33:11] [SPEAKER_04]: So, it's existing money in circulation rather than new money being added to the situation.
[00:33:16] [SPEAKER_04]: And it's because, obviously, banks do go to those pension funds because those pension funds are saying, we've got so much money now, particularly in Australia.
[00:33:24] [SPEAKER_04]: What do we do with it?
[00:33:25] [SPEAKER_04]: They're looking for a home for it because, you know, they just have so much now stored away that's looking for somewhere to invest.
[00:33:32] [SPEAKER_04]: And they don't want to take risky positions as well.
[00:33:34] [SPEAKER_03]: I mean, we've got a totally distorted financial sector.
[00:33:37] [SPEAKER_03]: And I remember one of my favorite, one of my most famous blog posts was called The Roving Cavaliers of Credit.
[00:33:44] [SPEAKER_03]: And that was the title ripped directly from Marx's, the third value of Marx's capital.
[00:33:49] [SPEAKER_03]: And he was quite sensibly being vilifying banks and saying that the economic system occasionally gives the financial sector the capacity to take over.
[00:34:02] [SPEAKER_03]: And he says, and this gang knows nothing about business and should have nothing to do with it.
[00:34:07] [SPEAKER_03]: But when you have high levels of private debt, the financial sector becomes the tail that wags the dog with the manufacturing sector.
[00:34:14] [SPEAKER_03]: And rather than getting growth, you get stultification.
[00:34:17] [SPEAKER_03]: And that's where we are now.
[00:34:18] [SPEAKER_03]: We've been there for 20 or 30 years.
[00:34:21] [SPEAKER_03]: And we're not going to break out of it, unfortunately.
[00:34:23] [SPEAKER_03]: No, we're not.
[00:34:24] [SPEAKER_04]: And clearly it points to the fact that it must be down to a lack of competition in the banking and finance sector.
[00:34:32] [SPEAKER_04]: That surely the ideal solution for all of this is if you've got to take out a mortgage.
[00:34:38] [SPEAKER_04]: I mean, I can see a problem with this even before I start explaining it.
[00:34:40] [SPEAKER_04]: But if you've got to take out a mortgage.
[00:34:42] [SPEAKER_04]: You do.
[00:34:42] [SPEAKER_04]: The idea that you can actually draw down more, you can overpay your mortgage and use that spare cash from, you know, so you're drawing down your debt.
[00:34:53] [SPEAKER_04]: You feel better.
[00:34:54] [SPEAKER_04]: It's got a wealth effect because you feel like you're paying off your mortgage a bit faster.
[00:34:57] [SPEAKER_04]: Therefore, you've got more money which you're going to spend in the broader economy.
[00:35:03] [SPEAKER_04]: And that's your form of saving by having less debt, which is, you know, having an account that can do that.
[00:35:10] [SPEAKER_04]: It was quite popular 10 or 20 years ago.
[00:35:12] [SPEAKER_04]: It's all gone by.
[00:35:13] [SPEAKER_04]: They're called offset accounts, but it doesn't have to be an offset account.
[00:35:16] [SPEAKER_04]: It just be an account that, you know, you have one bank account.
[00:35:19] [SPEAKER_04]: And it's in the red because you've got a hefty mortgage.
[00:35:22] [SPEAKER_04]: Pay it off faster.
[00:35:23] [SPEAKER_04]: You know, you get out of the red at some point, maybe sooner than you would otherwise.
[00:35:26] [SPEAKER_04]: And you can start saving for, you know, for your retirement or you can sell your house.
[00:35:32] [SPEAKER_04]: That's a much cleaner way, isn't it?
[00:35:37] [SPEAKER_04]: And that would be better for the economy, I think, because we wouldn't be because you would be investing in paying off your own house faster rather than investing in, you know, in pension funds, which all of a sudden have a load of extra cash.
[00:35:49] [SPEAKER_03]: It seems a simpler way forward.
[00:35:51] [SPEAKER_03]: Well, the real problem with it is that we're basing our future financial wealth security on increasing house prices.
[00:36:00] [SPEAKER_03]: This is all about maintaining house prices.
[00:36:02] [SPEAKER_04]: Well, actually, that was what I was seeing.
[00:36:04] [SPEAKER_04]: If you actually gave people the ability to pay off their debts faster, all that would mean is actually house prices would go up, wouldn't they?
[00:36:10] [SPEAKER_03]: Well, they'd go down because the large part of the cause of house prices is accelerating household debt, which I've covered the mathematics of in my blog.
[00:36:19] [SPEAKER_03]: But, yeah, one of the things that's causing this conundrum we're in is far too high level of house prices, which require high mortgages to enable you to buy into the market in the first place.
[00:36:33] [SPEAKER_03]: And that then means we have negative financial equity.
[00:36:37] [SPEAKER_03]: But we think we're OK because a house is worth a large amount of money.
[00:36:40] [SPEAKER_03]: But that's only the case if we don't sell the house.
[00:36:43] [SPEAKER_03]: We all decided to sell our houses.
[00:36:45] [SPEAKER_03]: House prices would crash.
[00:36:46] [SPEAKER_03]: So we just simply have to realize that the rising house prices, which is what we've been sucked into by 30 or 40 years of arguing about, you know, the benefits of home ownership.
[00:36:57] [SPEAKER_03]: All those benefits have accrued to the financial sector, not to the households themselves.
[00:37:01] [SPEAKER_04]: Yeah. And the finance sector now are not content with just getting our debt for our mortgage and all the money making from that is now trying to get our savings as well, trying to create this thing called savings that they want more and more of because it's our future security.
[00:37:16] [SPEAKER_04]: And as we've explained, that's creating another problem in that it is mean it's becoming the source of investment for companies rather than banks fulfilling that role.
[00:37:26] [SPEAKER_04]: And the more they source money from individuals directly or indirectly, the less money those individuals are going to spend on stuff that will grow the economy.
[00:37:35] [SPEAKER_04]: That's that's the summation of where we are, isn't it?
[00:37:37] [SPEAKER_04]: A crazy situation.
[00:37:38] [SPEAKER_04]: How did we get here?
[00:37:40] [SPEAKER_04]: Who ever thought that was a good idea?
[00:37:41] [SPEAKER_03]: Textbooks.
[00:37:42] [SPEAKER_03]: Textbook economics.
[00:37:43] [SPEAKER_03]: You hit again one of the successes of Samuelson.
[00:37:45] [SPEAKER_03]: Well, don't read them.
[00:37:46] [SPEAKER_03]: Good to talk, Steve.
[00:37:47] [SPEAKER_03]: Exactly.
[00:37:47] [SPEAKER_04]: We'll catch you next week.
[00:37:48] [SPEAKER_04]: Thanks.
[00:37:49] [SPEAKER_02]: The Debunking Economics Podcast.
[00:37:55] [SPEAKER_04]: If you've enjoyed listening to Debunking Economics, even if you haven't, you might also enjoy The Y Curve.
[00:38:02] [SPEAKER_04]: Each week, Roger Hearing and I talk to a guest about a topic that is very much in the news that week.
[00:38:07] [SPEAKER_04]: It's lively.
[00:38:08] [SPEAKER_04]: It's fun.
[00:38:08] [SPEAKER_04]: It's informative.
[00:38:10] [SPEAKER_04]: What more could you want?
[00:38:11] [SPEAKER_04]: So search The Y Curve in your favourite podcast app or go to ycurve.com to listen.