At 04:13 PM 10/30/01 -0500, you wrote: >Jim Devine wrote: > >>what did he [Minsky] say? I can imagine he said that Fisher's >>debt-deflation depression couldn't occur nowadays. He may still be right. > >It's been ages since I read it, and my copy is in storage in my parents' >garage, but as I remember it, Minsky said that big government and >indulgent central banks make a Fisher deflation impossible today.
yeah, that's what he said many times. But these days, at least in the US, we have a smaller government (until recently running a surplus). The Fed may be indulgent at times, but until recently it was afraid of inflation (sometimes finding itself "between a rock and a hard place," in Minsky's phrase, wanting to avoid debt defaults but afraid to fuel inflation). Further, an indulgent Fed could simply cause over-indebtedness to deepen. BTW, I wouldn't call recent Fed rate cuts "indulgent." It's more panicked. >I like PEN-L alum Penny Ciancanelli's formula - that in the Third World >debt crisis, the Third World got a Fisher deflation and the First, a >Minsky bailout. that's right, though the Minsky bail-out was attenuated by the late 1990s. I guess that kind of bail-out wasn't needed anymore, but the Fed helped cause the current almost-recession. Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine
