BHP and Rio agree, Steve Keen is wrong.
by Michael Pascoe
posted on Oct 23 09:24am
Michael Pascoe - Economists can occasionally be dangerous things when radical or simply wrong ideas fall on fertile ground.
Economists can occasionally be dangerous things when radical or simply wrong ideas fall on fertile ground. Karl Marx, for example, never personally hurt anyone that I know of, but some of his ideas eventually helped cause incredible suffering and death.
Domestically, an associate professor at the University of Western Sydney, Steve Keen, is currently scaring the easily-frightened with especially dire forecasts about the Australian economy. Keen's predictions aren't taken very seriously by most economists,
but he's still enjoyed plenty of media attention, much of it unquestioning. Some of my media colleagues are happy to search out the most extreme and alarmist views - they make bigger headlines.
Keen is predicting the economic equivalent of the earth splitting open, spewing forth fire, toads and serpents, the seas turning to blood, the Four Riders of the Apocalypse loping off random heads and limbs and so on. He represents a tiny minority of economic opinion.
(Part of Keen's appeal to populist media is that he has put his unit on the market, claiming housing prices are going to crash. As Rory Robertson, Macquarie Bank's respected interest rate strategist, observed, Keen would have more credibility as a housing forecaster if he had sold his unit last year.)
Journalists can be as dangerous as economists too when they needlessly scare their audiences and perhaps provoke them into doing the wrong thing.
I'm writing this on a flight to Perth and have just watched the Channel 9 Inflight News with a couple of prime examples.