Here is an interview with Australian economist Steve Keen from the BBC’s HARDtalk programme. Keen predicted the financial crisis and is concerned that we are entering into another Great Depression. He also informs us that he is a non-orthodox economist with the loudest mouth.
Keen talks of the positive side of banking behaviour when loans are used for investment purposes and working capital in corporations. However the negative side of banking is basically the funding of ponzi schemes in which money is lent out to gamble on asset prices rather than investing in productive sectors of the economy. It is this behaviour that has taken over the financial sector over the last 30 years. Basically what he is proposing is:
1. Write off the debt
2. Bankrupt the banks
3. Nationalise the financial system