the turmoil ahead

Interview with Australia economist Steve Keen:

The best we can hope for is a lost two decades?

If we leave it to the basic mechanism by which capitalism eliminates excessive debt which is bankruptcy and a slow grinding process of paying the debt down. Once we get back down to the level of debt that the system actually needs which is far lower than the level of private debt we have now then the process will be over. But that could take something like 20 years.

You’ve also suggested that it could take a rising level of violence.

The trouble is when you have a growing population and an economy that is used to growth and people expecting to get employed when they leave school and they find that in fact there are not enough new jobs coming on to handle the new entrants into the labor market, even if you grow slightly less than the rate of population change, that means that [you have] a population which you’re saying in the recent media is a lost generation. Well, that lost generation only has one outlet and that is frustration and violence. It is not the way to manage an effective society to be caught in a trap like this.

Your argument is that politicians won’t listen until there is something to make them listen.

Absolutely. Politicians are reactive individuals. They’re not leaders most of them. The vast majority of them. They’ve been going along with the general trend of believing that a larger financial sector, more deregulation, is a good thing.