credit

I caught this statement from Alan Blinder in a debate on the New York Times about teaching economics. Clearly, Blinder sees a huge financial crisis and reflexively understands changes must be made.

Remember the scene in A few Good Men where Colonel Jessup (Jack Nicholson) and Lieutenant Kaffee (Tom Cruise) trade insults? Following some pretty intense questioning, Kaffee yells at Jessup: “I want the truth”. With the deadly glare that…

I think the real difference between what Nick Rowe is saying and what people like Scott Fullwiler and Steve are saying is that Nick believes over the medium-term, central bank interest rate policy is endogenous. What I think Nick means is…

The video below is from On the Edge with Max Keiser. I speak to Max during this show from 31 March about the US economy, Federal Reserve policy, financial repression and more. On the issue of financial repression, I think my view is pretty…

Paul Krugman’s claim that those who argue banks play an essential role in macroeconomics are “Banking Mystics” has a natural riposte: Neoclassical economists like Krugman who believe that capitalism can be modelled without either money or…

The Free Exchange blog at The Economist has accepted my bet, and very cleverly (the bastards!) they have added a second one. For two years I have been arguing that a Chinese rebalancing will require much slower GDP growth rates than we…

Yesterday, John Carney at CNBC had a nice little post comparing Hyman Minsky's Financial Instability Hypothesis with some of the thinking by Friedrich von Hayek behind Austrian Business Cycle Theory. John rightly points to this passage as…

My view as developed in that post is that debt is central to understanding economic systems, and not just because it has a redistributive element in apportioning losses between creditors and debtors when recession forces credit writedowns.…

Alan Holmes wrote in 1969 that "in the real world, banks extend credit, creating deposits in the process, and look for the reserves later." Holmes would turn in his grave at Krugman’s naïve assertion, half a century later, that banks need…

This is a thematic post, I am also putting outside the paywall because there is a lot of chatter today about Spain needing to tap EU bailout funds this year. The messaging in the analyst community follows the thematic prediction I made in…