"We have argued that financial cycles are not driven by savings gluts but by procyclical interaction between intermediary leverage and the price of property that can serve as collateral for secured lending. Shin’s banking glut hypothesis is more compelling to us as the general motor of the financial cycle, rather than any savings glut (of the oil and manufacturing exporters, corporations, or the rich). At the heart of all financial cycles is loans against real-estate assets."
Dr. Minsky, please pick up the white courtesy phone, Dr. Minsky...
Anyway, the reason that Khanna, Trump and Biden push the outflows thesis is that this allows foreigners to be blamed for economic woes, rather than politically connected domestic interests.
-It had much less to do with our trade deficit and much more to do with the Clinton surplus. Holding the trade deficit roughly constant and flipping the government sector into surplus means that the US private sector has to be going into debt. And wouldn't you know all those safe treasury bonds aren't around anymore so Wall street creates credit default swaps and now there is a major demand for mortgages.
Thank you to all the morons who actually think that we need to save up and pay off the national debt.
"We have argued that financial cycles are not driven by savings gluts but by procyclical interaction between intermediary leverage and the price of property that can serve as collateral for secured lending. Shin’s banking glut hypothesis is more compelling to us as the general motor of the financial cycle, rather than any savings glut (of the oil and manufacturing exporters, corporations, or the rich). At the heart of all financial cycles is loans against real-estate assets."
Dr. Minsky, please pick up the white courtesy phone, Dr. Minsky...
Anyway, the reason that Khanna, Trump and Biden push the outflows thesis is that this allows foreigners to be blamed for economic woes, rather than politically connected domestic interests.
Somewhat tangentially, China's WTO accession had zero effect on the 50-year rate of fall in manufacturing's share of the US economy.
-It had much less to do with our trade deficit and much more to do with the Clinton surplus. Holding the trade deficit roughly constant and flipping the government sector into surplus means that the US private sector has to be going into debt. And wouldn't you know all those safe treasury bonds aren't around anymore so Wall street creates credit default swaps and now there is a major demand for mortgages.
Thank you to all the morons who actually think that we need to save up and pay off the national debt.