INET: Financial Instability Mini-Documentary

INET: Financial Instability Mini-Documentary

Financial stability, or the lack thereof. Leading thinkers speak out on what they feel is at the core of the problem. Featuring: Joseph Stiglitz, Gillian Tett, David Tuckett, Stephen Kinsella, John Kay, David Weinstein, Steve Keen and Dirk Bezemer. Directed by Four Corners Media

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24 Responses to “INET: Financial Instability Mini-Documentary” Subscribe

  1. abdullahnoorani November 25, 2012 at 5:15 pm #

    Basically gambling game going around the world economies…. creating reason to crush economy and then stabilized with related reason creation… actually the passion game runs of ego and greed . In olden era people do real business like related manufacturing etc. Now economy of air exist with not solid growth only gambles such as hedging.. forward trade

  2. AnniesEggs November 25, 2012 at 5:24 pm #

    John Blatt showed in 1983 in his book “Dynamic Economic Systems” that a model of a very simple economy (specifically one without private debt) where the entire output of the previous period is available as productive inputs in the current period and all will actually be used for that (i.e. market clearing) could move further from equilibrium if set-up at a position only close to rather than actually at equilibrium.

  3. chima chibi November 25, 2012 at 6:19 pm #

    Thanks for posting this. I ennjoyed it. This thing, economics, it reminds of the worldview of autistic people.

  4. ApocalypticAang November 25, 2012 at 6:46 pm #

    “Money and goods in my possession is the only thing with value. ”

    Money exists as a form of credit in most economies– notice how the value of fiat money or currencies can go to zero when an economy implodes.

  5. ApocalypticAang November 25, 2012 at 6:46 pm #

    “Economics tends toward equilibrium. ”

    And where, pray tell, does this “economics” that you speak of– where there is no fraudulent or government action– exists?

  6. cyrusp100 November 25, 2012 at 7:31 pm #

    Check out Steve Keen’s lectures on endogenous money creation. Commercial banks can create money out of thin air without the FED. In fact, banks have been creating money since 1500AD – long before central banks existed.

  7. WillOrng November 25, 2012 at 8:00 pm #

    Surely confidence is simply a function of the recent state of the economic cycle, like credit it exaggerates the booms and busts?

    Tell people you’re going to slash and burn scorch earth the economy with austerity when they’ve got a heavily debt and un/employment constrained budget is like hang, draw and quartering the confidence faerie.

  8. nutstoo November 25, 2012 at 8:04 pm #

    The people in this video are totally and I mean totally lost. Economics tends toward equilibrium. It may never reach an equilibrium, but will always be moving towards an equilibrium. The problem is the FRAUDULENT fractional reserve banking system (read the “mystery of banking” free online). It is not deregulation that is the problem,, but deregulation in a world where the government (through deposit insurance) guaranteed that you privatize the gains and socialize the losses

  9. jchyip November 25, 2012 at 8:22 pm #

    “…a credit crisis is always preceded by deregulation…” 5:56

  10. cskipper65 November 25, 2012 at 8:25 pm #

    Maybe it is regulation that is the problem. It seems that the government has regulated and allowed the FED to create money. In someways it seems that classical economics makes perfect sense on a broad scale and x does mark a general area not the spot. They did make a good point that the chasing of equilibrium is continuous when the money supply and credit continually increase. We need to continue the talk of why we support a private monetary cartel that contributes to reckless behavior?

  11. Fluminis1 November 25, 2012 at 8:29 pm #

    All these brilliant minds try to explain the 2007 collapse and failling economy but nobody sees the obvious, a monetairy system “money out of thin air’ controlled a hand few of people. This money with no backing has never ever ever worked in the history of men.

  12. 14905web November 25, 2012 at 8:37 pm #

    True. In gross terms the US is bigger. Never-the-less, 150% is dangerously high for a small economy which is not very well diversified. Australia was one of the few countries that had to guarantee ALL banks debts for ALL banks. They panicked.

    The US also wins on a debt per capita. Australia could have had the same debt per capita problem that the US had if they had started with the current Australian government’s attitude to debt (which is oft rationalised on Keynesian grounds).

  13. Adam Keefe November 25, 2012 at 9:26 pm #

    A strikingly significant little article from McLuhan writing in the NY Times, 1974. Focussing on the desire for, and necessity of, ‘play’, and an emphasis on ‘the interval’ in an electrified market, whipping out all old practices and disciplines, in favour a tendency towards playing the market for sport. A firm description of ‘modern’ financial behaviours. Highly recommended read:

    Google: McLuhan economics – Second link down

  14. RavenMad101 November 25, 2012 at 9:37 pm #

    I was ranting this sort of theory to my economist friend seven years ago when he was taking accounting economics in college. He kept on that supply demand is really the only driving force and even my Cabinetmaker brain knew better. I asked what about credit then? His answer this is a product of profit from demand over supply. My response…bullshit!

  15. Adam Keefe November 25, 2012 at 10:04 pm #

    Thank you for the recommendation – I have yes. Keen is significant because he does present concrete proposals, not just soft rhetoric and general complaint. A general austere tone I find can be more satisfying than heavily soundtracked documentaries, even if you are ironically not proposing austerity.

  16. cyrusp100 November 25, 2012 at 10:52 pm #

    Australia public debt is *tiny* compared to our private debt – that is the real problem.

    Australia’s private debt level is now at 150% of GDP. Most of the debt comes from our massive housing bubble. Our crash is going to be bigger than the USA’s.

  17. cyrusp100 November 25, 2012 at 11:19 pm #

    There were lots of bubbles under the gold standard. Banks have been creating money out of thin air since 1500. Look up endogenous money creation.

    That is why the gold standard was such a stupid idea. It allowed the banks to create money but not the government. A gold standard can only work if the government forbids endogenous money creation and you have a 100% reserve banking system.

  18. wailinburnin November 25, 2012 at 11:45 pm #

    Our modern era Capitalism is founded on the act of loading a bunch of guns in ships crewed with desperate men, sailing to the other side of the globe, hiring out as mercenaries while doing recon, then pirating all the spices you can fit in your hold and sailing home. Calculated murder goes to the profit column with mutiny and shipwreck to loses. The system is: Planned Exploitation with Risk glorified. This is the foundation of our economy, best when abstracted into probabilistic modeling.

  19. Adam Keefe November 25, 2012 at 11:57 pm #

    There is a very… sentimental tone to this video… When I hear Jim Rogers I am amused by this sort of ‘clown of the classical american orthodoxy’ coming at me with “let the banks fail!”. I switch to this video in the hope to find an alternative to contrast that Protestant ethic (in the Weberian sense). What I find is not all that satisfying… They favour an holistic/ecological approach, covering all areas of study.. To build a better model? Would it be better to describe rather than explain?

  20. bombers7878 November 26, 2012 at 12:52 am #

    *Correction: 6) Neoclassical economics looks at 4) and thinks there’s no way someone could not judge their appropriate debt levels for thirty years. *

  21. bombers7878 November 26, 2012 at 1:18 am #

    It’s simple: From 1980-2007 1) Productivity has grown (due technology and globalisation) 2) Real wages remained flat for workers 3) Credit was extended to workers to maintain/grow demand 4) Credit growth led to riskier asset speculation and synchronous housing bubbles around world 5) Asset prices dropped, debts remain the same, which chokes off demand 6) Neoclassical economics looks at 1) and thinks there’s no way someone could not judge their appropriate debt levels for thirty years.

  22. 14905web November 26, 2012 at 1:31 am #

    This ad suggests that credit was the source of the problem behind the US recession. Really? Wow. How clever.

    Note Joseph Stiglitz commended the Australian Labor party for borrowing lots of money with respect to the GFC. In fact, this action had little to do with Australia’s resilience but that the Labor government inherited a sound balance sheet and China as it’s prime customer.

    Now, the Australian government is in deficit and has a massive debt.

    Joseph Stiglitz is a hypocrite.

  23. 14905web November 26, 2012 at 2:11 am #

    Yes, that is indeed one of life’s mysteries.  The great Mises himself started from the left (so did Breitbart for that matter). Guess it takes one to know one.

  24. mikemat3307 November 26, 2012 at 2:52 am #

    If you go far enough to the left, you end up in “Austria”. Hyman Minsky was close. 

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