Economists rarely subscribe to the approximately 60-year ‘long wave’ between economic depressions noted by the Russian economist Nikolai Kondratieff. You see, they can’t, because it displays their absolute impotence in managing economies. So, as with the 18-yearly recession generated by land price bubbles which have been reduced to “a natural part of the business cycle”, they’re forced to put devastating socio-economic depressions into the same category. “They’re just a naturally-occurring phenomenon!”
The problem is that the neo-liberal economist is too busy with his head up his arse, fascinated by a vast amount of trivial detail–such as today’s cash rate being reduced to 1.25%–but unable to stand back and see the deflationary forest for its many trees.
What do we really expect if neoclassical economics can’t see the vast difference between (a) extractively pillaging unearned income out of the economy and (b) actually contributing to the creation of real wealth?
All the classical economists from Adam Smith, David Ricardo, JS Mill and Henry George understood that unearned “ground rent” needed to be taxed away for economies to work. Henry George reduced it to the simple proposition: wages and capital yields are what’s left after unearned economic rent has been extracted.
And haven’t we and our banks been majoring on capitalising land rent into obscene land prices! And why wouldn’t we do this if that’s what the tax regime tells us to do?
Problem is, we believe economists know what they’re doing as they inspect their own rectum interiere – but they’re unprepared to distinguish between speculation and productivity.