Reaching net zero – is it doable, or is it just a pipe dream? In podcasts recently Steve Keen has expressed thoughts that we are already too late to avoid catastrophic climate change. But this week, Harald Desing, a scientist at Empa, the Swiss Federal Laboratories for Materials Science and Technology, gives a more positive spin on the outlook. He reckons, if we focused on the task, accepted there would have to be an increased usage in fossil fuels in the short term, we should be able to get to net zero in 5 to 10 years. Of course, anyone who has watched “Don’t Look Up” knows that scientists might have the answer, but it’s the politicians and media commentators who will stop it happening. And the economists, let’s not forget them.

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Nobody wins when rates rise. Central banks might argue that everybody wins, because they are using these rises as the blunt instrument to knock down inflation. But the wealthy lose out because asset prices take a hammering, and the working poor become of the unworking even-poorer as the economic slowdown leads to rising unemployment. But it’s clear those on lower incomes suffer the most. This week Phil asks Steve if there’s a way for central banks to reduce the inequality as they seek to tame inflation?

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There is nothing or contentious that immigration, it seems. In the UK there’s a swathe of the population that don’t like foreigners very much, unless they are serving than fish and chips in Torremolinos. Others will deny being xenophobic but argue that Britain is full and there’s no room for anybody else. A more rationale argument might be that too much immigration happening too quickly can have societal and economic impacts – but what is too much and too quickly? This week Phil Dobbie and Steve Keen wade into the immigration debate.

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Not so long ago the world was worried about deflation, supposedly driven by low-cost imports from China, but also a stagnating economy driven by high levels of private debt. Now central banks are trying their hardest to bring down inflation, fearing without their expertise it will spiral out of control. So, will it? What caused it? And can we live with it? This week Phil and Steve look at the pros and cons of inflation and discuss whether it is here to stay.

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Silicon Valley Bank collapsed last month because there was a run on the bank and they didn’t have the assets to cover their customers deposits. They were trading insolvent, in other words, even though they had switched the money deposited into US Treasuries, supposedly the safest investment on earth. But they bought before the price of Treasuries came crashing down, as bond yields went up. This week Phil asks Steve if bonds now behave just like shares, and how much of the recent volatility is the result of QE by central banks?

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After the Great Depression a bunch of economists got together to hatch a plan to stop future runs on banks. The plan called for banks to only accept demand deposits “subject to a 100% reserve requirement in in lawful money and/or deposits with the Reserve Banks”. Some read that as an end to fractional reserve banking but, as Steve Keen explains this week, fractional reserve banking doesn’t really exist because banks don’t lend out deposits. And whilst some good came out of the Chicago Plan, he reckons restricting a banks ability to create money would be bad news for the economy. And wouldn’t stop a bank run – as evidenced by the recent collapse of SVB in the US. 

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If the west decouples itself from China and other autocratic regimes, just as we have done, to an extent with Russia, what does that mean for international trade? What does it mean for international investment if we exclude money from countries that are growing faster than we are? This week’s discussion follows a question from Pola, a listener, who asked, “Any chance you could talk about foreign debts and how this works? Also what impacts are likely to occur as BRICS etc move to payments in their own currencies instead of US dollars”. Or, perhaps, more poignantly, what would be the impact of a BRICs wide trading currency to challenge the dollar. 

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The collapse of Silicon Valley Bank last week can be put down to two things – first a management team that clearly ignored the falling value of the assets they held, and second the fact that the Fed was doing its best to make those assets fall even more\. The end result is hardly a surprise when you look at the numbers. In fact Frances Coppola predicted as much after the collapse of Silvergate Capital. This week Phil and Steve look at what went wrong and ask whether it could happen to other banks.

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At the end of this week’s mega-long episode of the Debunking Economics Podcast Steve Keen admits he longer sees Australian house prices as the most important issue on the planet. But it, along with private schools, continues to occupy dinner party conversations in many Australian households. So, with prices now falling, will they spiral down further as the RBA continues to lift interest rates. Or will they, as often seems to happen will they slow for a while than pick back up as inflation slows? This week Phil and Steve examine the growing wealth divide in Australia, driven by those who bought property early enough, and those who missed out and can’t get on the ladder. 

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This week on Debunking Economics Phil and Steve are joined by Richard McGahey, author of a new book “Unequal Cities: Overcoming anti-urban bias to reduce inequality in the United States”. One of the problems the US faces is that cities, by and large, are self-funded, with little in the way of federal or state support, beyond minimal welfare programmes. And cities compete with each other to survive. As Steve points out, being self-sufficient within an organism is not how organisms function properly. But that’s how the American economy is structured. And Richard suggests that the US is losing out, because properly funded cities are the most productive aspects of an economy, provided the ills of city living, such as pollution, congestion and social inequality, are funded and managed.

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