Talk 2013-10: HS2 and economic development

Café Economique talk given by Bettina Lange
When: Thursday 24th October 2013, 7:30-9:30pm
Where:  Vat & Fiddle pub, Queensbridge Rd NG2 1NB (in the Visitor Centre room, ground floor, left end of pub – wheelchair accessible)

Do the economics of High Speed Rail stack up ? The talk will
  • investigate the claim that HS2 will regenerate the local economy and steer economic activity away from London and the South East and towards the Northern English regions
  • examine the claim that people around the HS2 station proposed at Toton will benefit economically
  • have a look at the model for financing the HS2 project
  • outline uncertainties and risks regarding who will fund development and infrastructure associated with HS2 (for example addtional road capacity or public transport links)
Bettina Lange chairs the East Midlands Transport Activists’ Roundtable, is a member of the Nottinghamshire Campaign for Better Transport committee, has many years experience of transport campaigning and policy work, and has co-ordinated and written reponses to the emerging HS2 plans for East Midlands and Nottinghamshire Campaign to Protect Rural England.
She will be presenting her own take on HS2.

Talk 2013-09: Islamic Banking

Café Economique talk given by Bushra Merghani
When: Thursday 26th September 2013, 7:30-9:30pm
Where: City Gallery, 14a Long Row East, Oriel Chambers Courtyard NG1 2DH

Copy of talk: Islamic Banking

Does Islamic Banking offer a solution to the problems that have blighted western banks in recent times?

A growing number of Islamic, state-owned and private banks in Asia, Middle East and Africa are offering a range of ‘sharia-compliant’ financial products (business loans, mortgages and hire-purchase finance) without charging interest or up-front fees and are still making huge profits. Deposits into these banks have been growing at the rate of 30% per annum. Currently, it’s estimated that almost $200 billion transactions take place through these banks every year.

This talk by Bushra Merghani will discuss the benefits and limitations of Islamic banking and to what extent western banks can benefit from their experience.

Summary of a radio interview with Australian economist Steve Keen

Keep the parasitic banks alive and the economy dies

Steve Keen talks to Paul Mason – Analysis, BBC Radio 4, June 2012
(This is a 30 minute interview with a live audience at the London School of Economics.)

This has now become the July 2013 meeting for Café Economique: Keep the Parasitic Banking Sector Alive and the Economy Dies

Steve Keen was one of the few economists who predicted the financial crash. (In 2005 he noted that Australia’s debt to GDP ratio had been increasing exponentially.)

In this interview he argues that the big failure of economists is that their models ignore the impact of money, banks and debt. This is only valid in a world where there is no credit, no debt and no banks.

Banks make profits out of money which they generate – as long as they can persuade people that debt is good for them. But eventually the mountain of debt becomes unsustainable – a massive Ponzi scheme. [This echoes a main campaign objective of the Positive Money campaign which wants to remove the right to create money from private banks.]

Now that the financial crash is requiring the private sector to reduce debt, that reduces GDP and creates austerity – which will continue until debt levels have been brought down. This is not the time for the public sector to also reduce spending.

To avoid the 20 years austerity which could be necessary, Keen advocates a ‘Modern Debt Jubilee’. The government should create money to put into people’s bank accounts – with a requirement for it to be used to pay down debt as a first priority – quantitative easing for people not the banks. This would reduce the profitability of the banks but help to restore the economy.

He also suggests that shares traded on the stock market should have a limit on how many times they can change hands – to reduce speculation. Challenged that this would reduce the dynamism of capitalism, he argues that capitalism was dynamic when it was led by engineers producing things, with the support of banks. When bankers take the lead it causes asset bubbles.

Keen was predicting a further crash in the UK in 2012 – because our debt levels are higher than the US. The Treasury’s own figures suggest the UK debt to GDP ratio peaked at 450% (compared to 300% in the US), and for the financial sector alone 250% (120% in the US). He estimates that 60% of the rise in aggregate demand in the UK in recent years has been from debt. Reducing this debt could cause a crash worse than Lehman in the US.

For background to this discussion, see Chapters 13 & 14 of Steve Keen’s ‘Debunking Economics’, 2nd edition (2011), Zed Books. A summary of Keen’s analysis of the UK debt problem is at:

For a more detailed explanation of debt jubilee see Brian Davey’s blog, including a reference to Keen and a link to a similar idea put forward by Martin Wolf of the Financial Times, and a suggestion that it could be used to invest in green projects as well as paying down debt: