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TC approved: Every Perry Mehrling Post

March 9, 2011

If you haven’t seen Perry Mehrling’s blog, go check it out.  It isn’t “100% MMT compliant”, but he writes writes smart things.  There is a real “boots on the ground” feel to his writings that I find really refreshing – he gets finance from theory to execution.   I like that he’s able to be very precise about what happens in the real world, and also able to look outside the current conventional thinking.

Here he is talking Minsky:

Minsky was all about credit-fuelled spending for business investment; our crisis was clearly about credit-fuelled spending for household residential expenditure. Minsky was all about expansion of bank credit; our crisis was clearly about expansion of non-bank credit in the emerging capital market-based credit system. And Minsky developed his thinking in a largely closed-economy framework of the immediate post-Bretton Woods period; our crisis was clearly global, and its global reverberations continue to echo.

So we can hardly say “Minsky was right”, and stop there. Rather, what Minsky was right about was the same thing that Hawtrey was right about, the inherent instability of credit. That also is not a place to stop so much as it is a place to start. Minsky found his life’s work in updating Hawtrey, and the current generation will find its life’s work in updating Minsky.

Amen.  The entire post is great.  He also wrote an astonishing book on Fisher Black!

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