Newsnight Economics Editor Paul Mason interviewed the economist Steve Keen before an audience at the London School of Economics.
Keen was one of a small number of economists who predicted there would be a major financial crisis before the 2008 crash. He argues that if we keep the “parasitic banking sector” alive the economy dies, and says that conventional economics provides an unwitting cover for “the greatest ponzi schemes in history”.
Banks can expand the money supply. It’s a double-entry bookkeeping exercise to expand the money supply.
We have to remove that one massive flaw in capitalism to avoid perennial financial crises.
Paul Mason: But banks have rigid capital ratios, they have ceilings in terms of the amount of debt they can create…?
Steve Keen: Fundamentally, banks manage to evade most of those controls.
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