PODCAST: The causes of economic crisis by Thomas Palley

[mark]English starts at 2:00[/mark]

Thomas Palley‘s lecture

Milton Friedman’s influence on the economics profession has been enormous. In part, his success was due to political forces that have made neoliberalism the dominant global ideology, but Friedman also rode those forces and contributed to them. Friedman’s professional triumph is testament to the weak intellectual foundations of the economics profession which accepted ideas that are conceptually and empirically flawed. His success has taken economics back in a pre-Keynesian direction and squeezed Keynesianism out of the academy. Friedman’s thinking also frames so-called new Keynesian economics which is simply new classical macroeconomics with the addition of imperfect competition and nominal rigidities. By enabling the claim that macroeconomics is fully characterized by a divide between new Keynesian and new classical macroeconomics, new Keynesianism closes the pincer that excludes old Keynesianism. As long as that pincer holds, economics will remain under Friedman’s shadow.

Thomas Palley – Senior Economic Policy Adviser to the AFL-CIO and a Research Associate of the Economic Policy Institute in Washington. D.C. He was formerly Chief Economist with the US – China Economic and Security Review Commission. Prior to joining the Commission he was Director of the Open Society Institute’s Globalization Reform Project, and before that he was Assistant Director of Public Policy at the AFL-CIO. Dr. Palley’s recent books are From Financial Crisis to Stagnation: The Destruction of Shared Prosperity and the Role of Economics (Cambridge University Press); Financialization: The Economics of Finance Capital Domination (Palgrave Macmillan); and The Economic Crisis: Notes from the Underground (CreateSpace). He is also the author of Plenty of Nothing: The Downsizing of the American Dream and the Case for Structural Keynesianism (Princeton University Press) and Post Keynesian Economics (Macmillan Press). He also recently co-edited with Gustav Horn Restoring Shared Prosperity: A Policy Agenda from Leading Keynesian Economists (CreateSpace). He holds a B.A. degree from Oxford University and a M.A. degree in International Relations and Ph.D. in Economics, both from Yale University. His writings on economic theory and policy are available at www.thomaspalley.com

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