QE was big news before the pandemic. Then, as governments issued bailouts to keep us at home, central banks went into overdrive, buying up the mushrooming bond issuance from government. In some ways, it was a sort of People’s QE, because the money was finding its way directly into people’s bank accounts. So, how does that compare to the QE before we all got ill? And is the pandemic-style QE at all responsible for the rise in inflation we’ve experienced since? Phil asks Steve if there are lessons to be learned about People’s QE and inflation.

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Phil and Steve return to the well-worn path of talking about house prices. Why? Because, despite the downturn during the pandemic, followed by sharp rises in interest rates by central banks around the world, house prices are again edging up. Clearly, nothing can stop the march higher, even though an increasing proportion of the population simply can’t afford to enter the property market. So, we know who the losers are. Ut who is winning? And what can government policy do to build a more affordable stock of housing?

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The UK is recovering slower than just about anyone from the pandemic. The UK’s GDP is flat compared to where it was four years ago, whereas most countries have recovered from the pandemic, and then some. Inflation rose faster than most comparable economies and is taking longer to come down. So why is the UK struggling so much. This week Phil asks Steve the obvious question, has Brexit got something to do with it? And what role does a growing trade deficit play in the tardiness of Britain’s recovery?

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One of the biggest problems Britain faces is that so much of the wealth is concentrated in the southeast. And it only seems to be getting worse. The country has shifted from a Prime Minister who promised to level-up the economy, to a fiscal conservative who wants to cut government spending and reduce real wages, meaning there is less spending power outside London. Phil asks Steve if there is an easy solution to the economic destruction London is rendering on the rest of the UK?

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The UK Chancellor and the Bank of England Governor have called for increases in productivity as a way of helping to brig down inflation. So, not only should workers expect wages to fall in real terms, people should also be doing more per hour worked. Are they dreaming? This week, Steve Keen says you can’t increase output without increasing investment in technology and machinery, something the Chancellor is less keen to do. So long as the UK is investment starved, you’ll never see a rise in productivity. 

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We last had a financial crisis in 2008 (ignoring the pandemic years), and if we’re not in another crisis now, we’re well on the way to it, with mortgages rising, taxes increasing and the price of everything continuing to rise. Your spending power is being hit in three directions. But, isn’t that what central banks want? So we spend less and inflation comes down, theoretically. Yet the banks, who might not be to blame this time, are now feeling the hurt. In fact, they stand to gain from rising interest rates because they can raise their borrowing costs. This week Phil asks Steve, will the banks always win, come what may?

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The UK economy is ready for a major downturn. In part it’s down to supply chain difficulties, thanks to COVID, the war, the great resignation, sickness and, let’s not forget, Brexit. Originally central banks recognised this and said the inflation was transitory and we just needed to ride it out. Since then, they’ve gone back to their conventional thinking that inflation can only be fought with interest rates. The higher the better it seems. But Prof Steve Keen tells Phil Dobbie that it is the worst response possible, causing unnecessary suffering and cutting back on the kind of investment that could fix the supply chain difficulties. So why are they doing what they are doing?

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If we ignore the flagrant human rights abuses, there’s a lot to admire about China. There economy has grown at an incredibly rate whilst the West has been stagnating. So, what’s their secret? Phil quotes Mervyn King, former BoE governor, who spoke to a Chinese central banker and asked that very question. Here what he said, and what Steve Keen thinks is behind China’s growth, in this week’s podcast. 

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Older Brits will be familiar with Bruce Forsythe’s Generation. Today everyone is playing the Generation Game, but the young are the one’s losing out. They are steeped in debt and faced with the prospect of progressively unaffordable housing. Many of the over 60s meanwhile, have accrued healthy amounts of assets. As Phil Dobbie discusses with Steve Keen much of this we4alth will be passed on, but not everyone will benefit. So intergenerational wealth is adding to the rich-poor gap. 

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We know we don’t pay a fair price for energy. Energy companies are making a mint because they extract the energy without worrying about most of the externalities – like the impact they are having on the ecology of our planet. But what if they did pay a fair price? Could the economy survive? Phil Dobbie asks Steve Keen if we can fix our problems with the pricing mechanism if there was a way to accurately cost energy.

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