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Graeber's book Debt: The First 5000 Years documents that cycles of debt crisis and subsequent forgiveness is historically normal. And probably necessary. I mean, think about it: What other remedies do we have to winner-takes-all? Progressive taxation? Government largess?

Made me rethink all the bailouts, etc. Especially with the renewed scholarship on Keynesian 2.0 (MMT).

I'd probably be ok with bailouts, jubilees if they were more fair, more bottom up.

Financiers gobbling up all the cheddar, abandoning all their victim's, really pisses me off.

Insult to injury is lack of consequences, acting aggrieved when their malfeasance is examined. Just one example being Jamie Dimon clutching his pearls when Obama Admin merely suggesting the optics of huge bonuses for execs during a meltdown was a bad look.

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"I'd probably be ok with bailouts, jubilees if they were more fair, more bottom up..."

I think it is not so much the bailout that bothers me, as the "ok, crisis over, back to normal" that happens immediately afterwards. If it was something like "bailout, then break up into 50 smaller institutions immediately afterwards", I would not be so upset about it.

There are two ways to default. All at once or little by little. I think it is obvious that defaulting little by little is better.

There is a problem though. After the 2008 bailouts the default didn't even happen little by little.

Just look at Japan. You'd think that a real estate bubble that pops would also lead to the slow and steady erosion of debt. You'd expect maybe a 5% inflation rate to get rid of the debt.

Instead, inflation usually goes down after bubbles which means the default wasn't averted but spread over a period that keeps getting longer and longer with lower and lower inflation. Inflation is a soft default on debt but it isn't happening fast enough as inflation approaches 0% which is why I am in favor of negative interest rates.

You point out two aspects which confuse noob me.

I associate crashes with bubbles. Because economies are complex adaptive systems (butterfly effect), crashes are inevitable. Knowing this, policy makers do what they can to minimize bubbles, soften crashes. For which their is tremendous pushback (no good dead goes unpunished).

Some of the kibitzing wrt MMT is the distinction between inflation and interest rates. I gather that the anti-Keynesian rhetoric has traditionally focused on inflation (and deficits), and the MMT advocates are arguing that model is too narrow. I have no idea what all that means.

I think the course "economics of money and banking" might be of your interest. Really good insights there.

Looks fantastic. Thanks.

https://www.coursera.org/learn/money-banking

https://www.amazon.com/Economics-Banking-Financial-Markets-B...

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