Thursday, July 12, 2012

I've seen worse

Greetings, EconoSpeakers. As a special bonus for your devoted attention to this blog, you have the privilege of enduring me for the next few days.  Who am I?  Don't ask.  Those who tell don't know, those who know don't tell.  Of course for many it will be perfectly bleeding obvious, just STFU about it, okay?

We've all heard of the Great Recession and more recently, the Little Depression.  These days I'm reading Hyman Minsky, so I'm inclined to think neither phrase is appropriate.  More apt would be "Business as usual."  By Minsky, the sort of collapse we are currently experiencing is not a bug, it's a feature of unregulated capitalism.  If you doubt the ubiquity of such events, you should consult "This Time It's Different," by Reinhart and Rogoff.  In the most basic sense, this is normal.  It sucks, it's worse now than usual, but it's normal.  Deal with it.

R&R do not mention Minsky -- theirs is an exhaustive empirical work with some theoretical b.s. included, and little in the way of policy remedies.  In theoretical terms it is shallow.  Minsky is deep.  He gets into the pores of the financial system, long neglected in macroeconomic theory.  I hope to have more to say about him in due course.

Time for breakfast . . .


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