{"id":11956,"date":"2015-03-24T11:19:45","date_gmt":"2015-03-24T15:19:45","guid":{"rendered":"http:\/\/multiplier-effect.org\/?p=11956"},"modified":"2015-03-24T11:56:56","modified_gmt":"2015-03-24T15:56:56","slug":"public-banking-and-boom-bust-boom","status":"publish","type":"post","link":"https:\/\/blogs.bard.edu\/multiplier-effect\/public-banking-and-boom-bust-boom\/","title":{"rendered":"Public Banking and Boom Bust Boom"},"content":{"rendered":"

While in Spain for the launch of my Modern Money Primer in Spanish, I gave a long interview for Public Television. Parts of that interview are interspersed in this segment<\/a> on public banking.\u00a0My interview is in English (with Spanish subtitles), while the rest is in Spanish. Other portions of my interview will be broadcast later.<\/p>\n

The Boom Bust Boom<\/a> movie on Minsky will be released next month. Watch for it. I do not know how widely it will be distributed, but it is well worth seeing. Here\u2019s a nice piece from T<\/em>he Guardian<\/em>:<\/p>\n

\n

To Move Beyond Boom and Bust, We Need a New Theory of Capitalism<\/h4>\n

By Paul Mason, The Guardian UK<\/p>\n

23 March 15<\/p>\n

\"\"his is the year that economics might, if we are lucky, turn a corner. There\u2019s a deluge of calls for change in the way it is taught in universities. There\u2019s a global conference at the Organisation for Economic Co-operation and Development in Paris, where the giants of radical economics \u2013 including Greek finance minister Yanis Varoufakis \u2013 will get their biggest ever mainstream platform. And there\u2019s a film where a star of Monty Python talks to a\u00a0puppet of Hyman Minsky.<\/p>\n

Terry Jones\u2019s documentary film Boom Bust Boom hits the cinemas this month. Using puppetry and talking heads (including mine), Jones is trying to popularise the work of Minsky, a US economist who died in 1996 but whose name has become for ever associated with the Lehman Brothers crash<\/a>. Terrified analysts labelled it the \u201cMinsky moment\u201d.<\/p>\n

Minsky\u2019s genius was to show that financially complex capitalism is inherently unstable. Under conditions of stability, firms, banks and households will, over time, move from a position where their income pays off their debt, to one where it can only meet the interest payments on it. Finally, as instability rises, and central banks respond by expanding the supply of money, people end up borrowing just to pay back interest. The price of shares, homes and commodities rockets. Bust becomes inevitable.<\/p>\n

This logical and coherent prediction was laughed at until it came true. Mainstream economics had convinced itself that capitalism tends towards equilibrium; and that any shocks must be external. It did so by reducing economic thought to the construction of abstract models, which perfectly describe the system 95% of the time, but break down during critical events.<\/p>\n

In the aftermath of the crisis \u2013 which threatens some countries with a phase of stagnation lasting decades \u2013 Minsky\u2019s insight has been acknowledged. But his supporters face a problem. The mainstream has a model; the radicals do not. The mainstream theory is \u201cgood enough\u201d to run a business, a finance ministry or a central bank \u2013 as long as you are prepared, in practice, to ignore that theory when faced with crises.<\/p><\/blockquote>\n

Read the rest here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

While in Spain for the launch of my Modern Money Primer in Spanish, I gave a long interview for Public Television. Parts of that interview are interspersed in this segment on public banking.\u00a0My interview is in English (with Spanish subtitles), while the rest is in Spanish. Other portions of my interview will be broadcast later. […]<\/p>\n","protected":false},"author":208,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[111,112],"tags":[30,151,1135,1028,1027,229,981],"class_list":["post-11956","post","type-post","status-publish","format-standard","hentry","category-financial-reform","category-modern-monetary-theory","tag-minsky","tag-mmt","tag-modern-monetary-theory","tag-movie","tag-public-banking","tag-spain","tag-terry-jones"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/11956","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/users\/208"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/comments?post=11956"}],"version-history":[{"count":7,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/11956\/revisions"}],"predecessor-version":[{"id":11961,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/11956\/revisions\/11961"}],"wp:attachment":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/media?parent=11956"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/categories?post=11956"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/tags?post=11956"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}