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Related: About this forumCapital Account: Steve Keen on the Minsky Singularity and the Debt Black Hole's Event Horizon
Welcome to Capital Account. Greece drops demands for softer bailout terms, fearing rejection from international lenders. Australian economist and Debunking Economics author Steve Keen will tell us if this is a case when debt deflation wins and the real economy loses. In the US, new jobs numbers disappoint again. However, the number of consumer and business bankruptcies are falling and could end the year at the lowest level since the 2008 financial crisis. Is this good news? Maybe not, as it may be due to rock bottom interest rates. Also, student loan delinquencies are rising. Economist and Professor Steve Keen will talk about the toll that too much debt can have on an economy once it has broken past the "event horizon."
Plus, UK authorities open a criminal probe into the attempted rigging of LIBOR. Meanwhile, a US bank regulator warns banks are taking increasing risk as a result of ZIRP (zero interest rate policies). Have we reached the event horizon of a Minsky singularity, which is sucking us into a black hole of all consuming debt? Is this the point of no return? There have been many efforts to paper over the debt, but it hasn't gone away. Economist Steve Keen, author of "Debunking Economics: The Naked Emperor Dethroned," will explain. He agrees that ZIRP is resulting in increased risk taking by banks. Yet the bad practices of banks, including the manipulation of markets and profiting from ponzi schemes, are ignored in the economic models of academics who influence policy. Professor and economist Steve Keen will tell us how this is possible.
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Capital Account: Steve Keen on the Minsky Singularity and the Debt Black Hole's Event Horizon (Original Post)
girl gone mad
Jul 2012
OP
This post from Wray gives more insight into the neoclassical/post-Keynesian banking debate:
girl gone mad
Jul 2012
#1
girl gone mad
(20,634 posts)1. This post from Wray gives more insight into the neoclassical/post-Keynesian banking debate:
KRUGMAN VERSUS MINSKY: Who Should You Bank On When It Comes to Banking?
Author: L. Randall Wray · April 2nd, 2012
Last week I explained why Minsky matters, outlining his main contributions. See here: http://www.economonitor.com/lrwray/2012/03/27/why-minsky-matters-part-one/#idc-container
This was, in part, a response to a blog by Paul Krugman that appeared to dismiss the importance of trying to find out what Minsky really meant. See here: http://krugman.blogs.nytimes.com/2012/03/27/minksy-and-methodology-wonkish
But, more importantly, it was a response to his defense of a simple model of debt deflation dynamics that left banks out of the picture. In Krugmans view, banks are not very important since all they do is to intermediate between savers and investors, taking in deposits and packaging them into loans.
In my post last week I promised to go into more detail on Minskys approach to banking. And right on cue, Krugman expanded on his views in this post: http://krugman.blogs.nytimes.com/2012/03/27/banking-mysticism
Now, I know that Krugmans own specialty is NOT money and banking, so one would not expect him to have a deep understanding of all the technical details. However, he is an important columnist and textbook writer, so if he is going to expound upon what banks do, he should at least have the basics more-or-less correct.
read more: http://www.economonitor.com/lrwray/2012/04/02/krugman-versus-minsky-who-should-you-bank-on-when-it-comes-to-banking
Author: L. Randall Wray · April 2nd, 2012
Last week I explained why Minsky matters, outlining his main contributions. See here: http://www.economonitor.com/lrwray/2012/03/27/why-minsky-matters-part-one/#idc-container
This was, in part, a response to a blog by Paul Krugman that appeared to dismiss the importance of trying to find out what Minsky really meant. See here: http://krugman.blogs.nytimes.com/2012/03/27/minksy-and-methodology-wonkish
But, more importantly, it was a response to his defense of a simple model of debt deflation dynamics that left banks out of the picture. In Krugmans view, banks are not very important since all they do is to intermediate between savers and investors, taking in deposits and packaging them into loans.
In my post last week I promised to go into more detail on Minskys approach to banking. And right on cue, Krugman expanded on his views in this post: http://krugman.blogs.nytimes.com/2012/03/27/banking-mysticism
Now, I know that Krugmans own specialty is NOT money and banking, so one would not expect him to have a deep understanding of all the technical details. However, he is an important columnist and textbook writer, so if he is going to expound upon what banks do, he should at least have the basics more-or-less correct.
read more: http://www.economonitor.com/lrwray/2012/04/02/krugman-versus-minsky-who-should-you-bank-on-when-it-comes-to-banking
dixiegrrrrl
(60,010 posts)2. I keep forgetting to check into that show, thanks for posting it!
girl gone mad
(20,634 posts)3. You're welcome, dg!