Saturday, March 29, 2008

Interesting reading

I found this Wall Street Journal article about Hyman Minsky. He was a "post-Keynesian" economist whose writings focused on the inherent instability of financial markets. I found his writings were a good summation of the behaviors that cause financial bubbles. Taken together with one of my favorite books, Mackay' s "Extraordinary Popular Delusions and the Madness of Crowds" - it gives a good explanation of how bubbles happen and burst.

What it should remind people, especially politicians, that human behavior has been a constant throughout existence. Bubbles have happened before, and will happen again.

1 comment:

Fortitudine said...

"Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one."

Mackay's insight remains trenchant today. I submit for your approval Al Gore's climate change crusade.

Your subtitle quotation is, incidentally, one of my favourites from Atlas Shrugged. Every Objectivist leans towards one of the three boys. By your blog name I assume you fancy yourself as Galt. Myself, I lean towards Ragnar.