On this off day here at STB -- we typically publish here Mondays, Wednesdays and Fridays -- I wanted to pass along some video and audio from an economist I stumbled across named Mark Blyth. In addition to being Scottish and entertaining (great accent - very funny), he also has some strong insights and a fresh way of presenting them.
Yesterday we talked here about the parallels between America's economic changes and the change in the physical layout and composition of our cities. The Capitalism 2.0 and especially the 3.0 versions we discussed rely heavily on mathematical models. As our long time readers know through our numerous quotes of Nassim Taleb, it is the height of intellectual arrogance to believe we can model a system as complex as the world economy by simplifying it down to a few variables. In this first video, Blyth delivers a variation on this theme from a different perspective.
Blyth has also been quite passionate about the injustice of the financial system to the poor and middle class, first through decades of fraudulent finance that took advantage of them and then through austerity brought about after government bailouts. In this unique video, Blyth explains his view on the paradox of austerity.
Finally, and this is the piece that actually got me looking into Blyth's work, there is this audio interview of him talking about the Irish debt crisis and how it relates to the world economy. He explains the reason why the bailouts happened and paints a vivid picture of what would happen if the repo market failed to function and businesses all had to have cash in order to make payrolls (cash that would not have been there).
“You’ve got 300 million Americans and 500 million handguns. And 72 percent of Americans that live paycheck to paycheck. Do the math!”
In other words, there were some pretty strong incentives to keep the economy liquid, regardless of the long-term consequences.
You'll find the rest of that interview to be equally compelling. He paints a vivid picture of what went wrong in Ireland and how that, and related financial problems, truly threaten the long-term stability of the economy.