“If You Want to Head-Off Fascism, You’ve Got to Find a Politician Willing to Take on the Financial Sector”

Professor Steve Keen, prominent among a small group of economists who correctly foresaw the 2007 meltdown, talks about the parallels between the Great Depression of the 1930s and the current “great” recession.

The key indicator he uses to predict periods of major economic collapse is the ratio of private debt in an economy to GDP.

In America in the 1920s, he says, the ratio of private debt to GDP was something on the order of 190%. In the current crisis it was over 300% prior to the bursting of the bubble. By this indicator, I’d say we’re in another depression now.

Both the Great Depression and the current “Great Recession,” Keen reminds us, are periods of massive “deleveraging.”

Discussing the rise of Hitler after and as a result of the Great Depression, he sees a similar danger now, and says, “If you want to head-off fascism, you’ve got to find a politician willing to take on the financial sector.”

To which I say, be afraid … be vcry afraid.


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