Minsky Meltdown and shut up, Bullshit-pedia!

“We are in the midst of a Minsky moment, bordering on a Minsky meltdown” said prophetically last Summer Paul McCulley of PIMCO (no.1 bond-fund manager), one of the many financial people paying attention to the intellectual work of Hyman P. Minsky. But he had also added, in January 2001 (“Capitalism’s Beast of Burden”), that Wall Street boyz quote Authors they have not read, by saying it was creative destruction moment, when the New Economy bubble was blowing up.

Pity that the same is true for Wikipedia, such a mess and anti-intellect meltdown! Try Hyman P. Minsky item; there is not even the usual caveat: this is a provisional draft, quotations are still missing. The text is outrageous, an insult to the memory of the great economist. You better shut down wiki, instead of publishing this bullshit: WSJ, the voice of the bosses, is much fairer to Minsky than you are (although Minsky was “obscure” only to WS journalists).

Cream of the cream (you evaluate arguments, and missing quotations):

“Yet, Minsky’s conjecture as how this instability develops proves to be misguided.

Ludwig von Mises explained how booms fueled by the expansion of Federal Reserve credit backed by nothing to member banks leads to malinvestment into unproductive activities. Unlike Minsky, Mises showed how the Federal Reserve destabilizes the economy. Minsky held the false belief that capitalism itself is unstable.”

We thought the Fed was a loosely, scarcely independent State institution, that had something to do with capitalism as a system, and the euthanasia of the rentier (e.g.: Randall Wray 2007; Galbraith, Giovannoni and Russo 2007); and lately it was coming closer and closer to max entropy and limited, shortrun impact (Aglietta, Chesnais, Roudini, etc.: goto our subprime references static page): we just needed this wiki’s lesson to refresh our knowledge.

We are curious, hungry to see the alleged, but still missing proof against Minsky’s Financial Instability Hypothesis. We suspect wiki contributor does not know what he is evoking, when referring to the von Mises version of the neo-Austrian paradigm, as if it were a dogmatic, obvious and  standard source … (von Mises VS Minsky is a nice match, in any case). At the moment, there is a 6-0, 6-0, 6-0 pro-Minsky collective mental experiment ongoing – in the global “shadow financial system” laboratory of the capitalisms of the future.

Then, in the references, Bullshitpedia gives you the wrong addresses: perhaps just to prevent the reader from being misguided by the persuasive Minsky’s prose. At the address they first recommend, all links are wrong and outdated, since they point to the Levy Institute, where Minsky actually worked 1991-96, but the entire link structure needs to be updated from the http://www.levy.org/ site, goto: working papers.

The famous 1993 paper is a good introduction to the Hypothesis: Hyman P. Minsky (1993), The Financial Instability Hypothesis. In: Philip Arestis and Malcolm Sawyer eds., Handbook of Radical Political Economy. Aldershot: Edward Elgar.
An anti-dote to Bullshit-pedia?

The proceedings of past Minsky Conferences, and the program of the imminent one:

17th Annual Hyman P. Minsky Conference on the State of the U.S. and World Economies.
Credit, Markets, and the Real Economy: Is the Financial System Working?

This year’s conference focuses on the current economic and financial crisis in the United States and its effects on the world economy. Topics include: causes and consequences of the “Minsky moment”; the impact of the credit crunch on the economic and financial market outlook; dislocations and policy options; the rehabilitation of fiscal policy; margins of safety, systemic risk, and the U.S. subprime mortgage market; lessons from earlier times to rehabilitate mortgage financing and the banks; financial markets regulation-reregulation; the inefficiency of computer-driven markets; currency markets fluctuations; and exchange rate misalignment.

The conference will be held April 17–18, 2008, at the Levy Institute’s research and conference center at Blithewood, on the campus of Bard College, Annandale-on-Hudson, New York.

Published in: on March 22, 2008 at 2:10 pm  Leave a Comment  
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