In 1944, at Bretton Woods, 44 countries agreed to make the US dollar the world's reserve currency. This decision inflated the dollar's value, making American exports expensive and imports cheaper. Donald Trump is now addressing this imbalance with tariffs on countries with high trade surpluses. Steve suggests that adopting Keynes's proposal for a neutral Bancor currency might have been better, while Phil wonders if it's time to reintroduce it, perhaps calling it “Trump” to appeal to the President’s ego. Hosted on Acast. See acast.com/privacy for more information.
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42:34
Trump. Has he lost his mind?
It’s clear that President Trump lied to the American people about his reciprocal tariffs. Many of the countries he is imposing tariffs do not impose anywhere near those numbers on imports from America. As Phil points out, some countries, like Cambodia, that sell cheap goods to the US don’t buy from the US because they can’t afford to on their low wages. You can only have trade equalisation if you have similar income levels.Steve takes us through the formula that was sued to calculate these ‘reciprocal’ tariffs. The only resolution to the issue, says Steve, is a new currency for international trade. An idea the Americans knocked back at Bretton Woods. Hosted on Acast. See acast.com/privacy for more information.
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37:48
Should we tax the rich?
It’s often the easy excuse on how to fix the problems of wealth inequality - just tax the rich more. Former trader turned YouTuber economist Gary Stevenson argues regularly that it’ll fix a lot of the problem. He’s right that the wealthy own assets and the richer they become the more the price of those assets increases. Take land as an example. The government is on a push to build more houses to benefit lower income earners. But who owns the land those houses will be built on? The rich? So, who wins from the demand for more land? Gary’s argument is if you tax hard enough the rich will be forced to sell assets which will bring the price down. Steve’s less convinced, simply because the uber-wealthy have always found a way to avoid taxation. But he thinks the argument also ignores (or isn’t aware of) the fact that government deficits create money. Perhaps the focus should be ore on where that deficit spending ends up. Maybe we should get Gary on the podcast. Hosted on Acast. See acast.com/privacy for more information.
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44:05
Will Trump drive us to a better tax system?
It’s likely that many countries around the world will face import tariffs in retaliation for imposing a value-added-tax on American goods sold in their own country - alongside other goods, taxed equally, that are not from America. As Steve outs it this week, “What tortured brain cells have communicated to other tortured brain cells to make a proposition that VAT on imports from America is discriminatory”.Still, it looks like it might happen. And how do you resolve that situation. Do you get rid of a value added tax? Phil asks whether that could be a good thing. It’s unfair, complicated, bureaucratic and easily avoided. Would we all be better off with a transaction tax? Hosted on Acast. See acast.com/privacy for more information.
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39:11
There is no energy transition happening
Are we kidding ourselves when we talk about an energy transition? Sure, we are using more renewables than ever before, but the planet is also using more fossil fuels than ever before. Phil asks Steve whether part of the problem is that we pout faith in incumbent energy companies managing that transition. The way BP and others have switched focus back on fossil fuel exploration shows how ill-conceived that expectation was. But, irrespective of who drives the transition, is it too much to expect that we will leave energy untapped. If renewables provide a new source of energy, won’t we just use up more energy, because the more there is the greater the productivity, the better off we are.Watch the video of the podcast here: https://www.youtube.com/watch?v=ArfsehlKMo8&t=2s Hosted on Acast. See acast.com/privacy for more information.
Economist Steve Keen talks to Phil Dobbie about the failings of the neoclassical economics and how it reflects on society. Hosted on Acast. See acast.com/privacy for more information.
Ireland