Several
people (Huntington) tried to name the late August abrupt worldwide
stock market downturn a Minsky Moment. The Wall Street Journal ran an
article on it.
We name unexplained, sometimes random, phenomenon in the hopes of understanding them. The Minsky Moment is a mistake. A big mistake. Wrong man, wrong name.
When I was a graduate student in
economics at U.C. Berkeley, Hyman P. Minsky was one of my monetary
theory professors. Minsky was an out and out Marxist who loved Fidel
Castro and prayed vigorously for the destruction of capitalism. Unlike
most of my fellow grad students, I found Minsky narrow minded and
pathetically ideological. The Berkeley Econ department was a band of
unrepentant Trotskyites and probably still is (Only a few exceptions).
The
publications in Minsky's later life were focused on a not-so-unique way
that capitalism might destroy itself. He proposed that speculation and
risk inflation would grow as the periods of economic success were
extended. Markets would crash. Minsky must have hated those long
periods of economic expansion with no crashes.
Whatever actually
happened in late August of this year won't be known for several more decades. But
one thing I do know is that if any time period of economic travail
should be named a Minsky Moment, it should be a period of general
starvation brought on by communism in Cuba or North Korea.
Footnote: Haman is an evil figure in the Purim story of Esther.