Minsky Conference Proceedings

The 20th Annual Hyman P. Minsky Conference, organized by the Levy Institute with support from the Ford Foundation, featured a broad range of speakers, including Gary Gensler (CFTC Chairman—occasioning some interesting back-and-forth in Q&A regarding commodities speculation), Paul McCulley, Andrew Sheng, Phil Angelides, Charles Plosser, Gary Gorton, Charles Evans, Vitor Constancio (Vice President of the ECB), Sheila Blair (head of the FDIC), Martin Mayer (who is apparently writing a biography of Minsky), and more.  The proceedings, including Q&A sessions, can be found here; select audio can be accessed here.

There’s a lot of good material to mine, but I’d like to highlight one particular session:  “Financial Journalism and Financial Reform: What’s Missing from the Headlines?” (the title explains itself), moderated by John Cassidy of the New Yorker and featuring Jeff Madrick, Joe Nocera, Steve Randy Waldman, and Francesco Guerrera (see “Session 2” for the audio).  There’s a great quotation from Steve Randy Waldman here:  “Goldman Sachs is just an off-balance sheet special purpose vehicle of the United States government.  Lloyd Blankfein is either a civil servant or a government contractor.  It’s just [that] his pay is out of line.”

The context is a discussion (starting at the 9:50 mark of Waldman’s presentation) that jumps off from this Minsky quotation: “financial reform needs to confront the public nature of much that is private.”  Waldman argues that while financial writers talk about the heads of the big six banks as though they were captains of private industry, their institutions ought to be treated as pseudo-government entities (just as Citibank ultimately had to stand behind its SIVs, which were supposed to be legally distinct, the US government ultimately has to stand behind the big banks in cases of insolvency).