Bad Economics is a book for everyone who wants to understand why things have gone wrong rather than slavishly accepting the mainstream version of events. It takes on the illusions and delusions which regularly shape economic policy. Absolutely no knowledge of economics is needed; only common sense and an open mind. It explains how bad economics is ruining Western societies, while good economics has been pushed aside. Its aim, by exposing the bad, is to contribute to the revival of the good. Two paths are still open: one informed by good economics, leading to hope; one by bad economics, leading to despair. The story isn't finished; the trends are unpromising. At the same time, the salutary experience Western societies are having in dealing with crippling government debt is keeping hope alive. CONTENTS PROLOGUE PREFACE 1. THE KEY TO TRUTH 2. PRICES AND PROSPERITY 3. SAVING AND INVESTING 4. KEYNES AND KEYNESIANS 5. KEYNESIAN WORLD 6. PRE-KEYNESIAN WORLD 7. BOOMING AND BUSTING 8. HOLY HOLES IN THE ECONOMY! THE GFC 9. HOLY HOLES II: WOEFUL POLICY 10. HOLY HOLES III: PESTILENT ECONOMISTS 11. DRESSED UP STATISTICAL NONSENSE 12. CONTRADICTION IN TERMS 13. SPREADING THE WEALTH 14. HOPE AND DESPAIR 15. CARGO CULT AND DEPENDENCY 16. INTERNATIONAL DEPENDENCY 17. UNHINGED FROM PRACTICALITY 18. UTOPIA 19. BAD ARITHMETIC 20. MASTERS OF THE UNIVERSE 21. GRAND BARGAIN APPENDIX: TEMPERAMENTAL BIAS INDEX