Every Wednesday I cross post what I've written here to my other blog, Have Coffee Will Write, but I can't recall the last time, if ever, that I brought something from there to here. I thought while writing this plug for Terry Jones' documentary Boom Bust Boom, that the topic was equally appropriate for my readers here at The Writing On The Wal. Enjoy. As we approach the 8th anniversary of our most recent Minsky Moment we still do not know how to prevent the next one. What we ought to know is that repeating the prophylactics of the past is, by one popular definition of the word bat-shit crazy insane, well, insane. Could the answer come from a Python? Perhaps.
This is the year that economics might, if we are lucky, turn a corner. There’s a deluge of calls for change in the way it is taught in universities. There’s a global conference at the Organisation for Economic Co-operation and Development in Paris, where the giants of radical economics – including Greek finance minister Yanis Varoufakis – will get their biggest ever mainstream platform. And there’s a film where a star of Monty Python talks to a puppet of Hyman Minsky. Terry Jones’s 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. Terrified analysts labelled it the “Minsky moment”. Minsky’s 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. 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.
This reminds me of one definition of war, from the view of those actually fighting, as days and weeks of seemingly everlasting tedium and boredom separated by brief moments of inconceivable terror. I'm all for eliminating that terror bit. Jeff Hess: Have Coffee Will Write.

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