Thanks to everyone who came to the launch of Aftershock at LSE last night.
It was a great success. Mark Hillary took some photos of it.
Hope you enjoy the book.. and please spread the word!
Hi, I’ve listened to your talk at LSE as a podcast and you’re the first person I heard so clearly set out the problem with housing as an asset (fixed supply, appreciation is parasitic on economic growth). You’re also one of the few who point out the unproductive bulk of people employed in the finance industry as a burden to society. Wonderful talk! I’ll be eager to read the book.
Two questions come to mind:
1. Did you have any ideas as to how to disentangle the economy from the banks’ balance sheets? If I understand right, around 90% of money is IOUs issued by banks against debt, and the bailout converted much of it to government money. I’d like to hear how you’d separate those, like your water example. I fear that if the answer is uninsured funds, as Laurence Kotlikoff says, then pension funds and such will still be compelled to invest in them, and there will be bubbles and losses dumped on the public (being the sucker Joe investor in this case, but still a broad segment of the public). Would you advocate a fixed money supply? Credit for real output only?
2. If immigration is allowed freely between vastly different economies, what would be the impact on the *weak* economy? No doubt that the strong one will benefit, but will the weak one not be drained of the most productive of its members in terms of real output? You’d be disconnecting them from the weak economy and connecting them to the rich one, so no trickle-down either. The EU opened borders but only with matching cohesion programmes, and the ex communist countries, today Cuba, kept their people in for that reason. Rightly I think if you leave aside the morals of it. What’s your view?