Great Leap Forward

The Rise and Fall of Money Manager Capitalism

Sorry for some self-promotion. Here’s a new book co-authored with Eric Tymoigne:

The Rise and Fall of Money Manager Capitalism:
Minsky’s half century from world war two to the great recession

Description: The book studies the trends that led to the worst financial crisis since the Great Depression, as well as the unfolding of the crisis, in order to provide policy recommendations to improve financial stability. The book starts with changes in monetary policy and income distribution from the 1970s. These changes profoundly modified the foundations of economic growth in the US by destroying the commitment banking model and by decreasing the earning power of households whose consumption has been at the core of the growth process.

The main themes of the book are the changes in the financial structure and income distribution, the collapse of the Ponzi process in 2007, and actual and prospective policy responses. The objective is to show that Minsky’s approach can be used to understand the making and unfolding of the crisis and to draw some policy implications to improve financial stability.

6 Responses to “The Rise and Fall of Money Manager Capitalism”

L. Randall Wray L. Randall WrayJune 18th, 2013 at 4:18 pm

Jane, I’m not sure what you are asking for. I think the context is this: govt has gone to extraordinary lengths over past 5 years, with very little positive impact on jobs. Fed originated $29TRILLION in loans to save banksters, on the argument we need to save them to save the economy. Fed has engaged in 3 versions of QE, pumping banks full of excess reserves on the argument that we need them to lend to save the economy. And we tried “growth thru austerity”–cutting spending and raising taxes on the argument that would get the private sector pumping. All of that was nonsense, of course! So why not just try jobs? For approx 1-2% of GDP we could start an ELR program.

nmmaierJune 19th, 2013 at 10:55 pm

Randall, you keep beating that Minsky drum that the Govt should create a massive jobs program for 25 million Americans. The only problem is that the Govt has no track record of creating jobs or industries that create positve GDP growth (ie. Solyndra and the whole Green Energy nonsense which was a complete misallocation of capital.) Did you know that John D. Rockefeller Jr. in the depth of the depression in 1933 decided to build the Rockefeller Center in NYC and employed 75,000 people? It is amazing what free enterprise will do and can do if unencumbered by Govt taxes and regulations.

jerryJune 20th, 2013 at 6:20 pm

Hey Randy,

What are your thoughts on the potential effects (if any) of QE tapering? Obviously the QE doesn't do anything for the real economy and is just an asset swap, but it seems like investors are preparing for the apocalypse which could bring down stock prices, house prices, reduce the "wealth effect", etc.

ChartalistJuly 5th, 2013 at 8:55 am

What about the WPA? Didn't the government create jobs that positively contributed to growth during the depression? It is dishonest to keep distorting historical facts!