Riot reading

Handy guide to the week's riot writing: eight explanations and eight excellent riot commentaries from the press/blogs. What am I missing?

Werner-nomics (or how to turn debt into jobs)

After my last post on stimulating growth, inspired by the riots, I stumbled across an article on the q-finance website by Richard Werner, the rebel economist from Southampton University. As a layman’s introduction to his ideas on credit and economic growth, it was pretty thought provoking. 

Werner is a heterodox (as in, not orthodox) economist whose theories on credit creation and money are proving a major challenge to mainstream economics. He invented the term “quantitative easing” while working on the Japanese banking crisis in the 1990s and his book “New Paradigm in Macroeconomics” has been hailed as a classic in the making. Despite his dubious choice of words, he recently become a Qualified Member of Finance Watch and seems to be working hard to live up to his 2003 Davos billing as a “Global Leader for Tomorrow”.

Here is a summary of the article and a few thoughts about what it could mean for growth:

Growth pains

Violence among unemployed north Londoners, panic in the financial markets, teetering public debt – the UK is really missing economic growth. It seems we need a hit of good economic news quickly, before things turn even uglier. 

But before grabbing the economic morphine of QE and tax cuts, shouldn't we check if they will actually improve the way we use our resources, rather than merely expanding credit and inflating asset values?