Hy Minsky, Low Finance: Modern Money, Civil Rights, and Consumer Debt


New Economic Perspectives has the article Hy Minsky, Low Finance: Modern Money, Civil Rights, and Consumer Debt. It is hard to know what you are going to get from this article by just looking at the title. I’ll start by quoting a conclusion stated in the article.

We have an economy that eats people’s fundamental rights for breakfast.

Now, I will back up to a couple of paragraphs that I think supply some of the justification for this conclusion. MMTers are proponents of Modern Money Theory which just explains how our monetary system works.

Consumer finance, in general, is becoming increasingly complex and moving faster and faster, meaning it’s becoming harder for people to see the forest through the trees. Today, in the current environment of federal deregulation, the American Bankers Association is trying to get banks back into balloon-payment payday loan. Subprime mortgages are coming back, auto finance is a total racket, healthcare woes will churn medical debt until we fix that system, and student debt is just going to get more abusive under Betsy. Additionally, there’s a debt crisis for living expenses in many major cities. I’ve encountered mattress debt, sewing machine debt, and puppy dog debt. Then, on top of all this, and this is for other folks on the panels, people are taking out loans so they can pay their debts to courts, municipalities, prisons, and other entities other folks on the panel will talk about.
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So what do we about all this? MMTers already have the answer: we spend money for public purpose on things that actually make people’s lives better as whole people. We can’t just throw money at people. (I mean this in the context of lending, obviously, but if you’ll indulge me a minute, I’m also talking about some approaches to Basic Income here. If you’re just receiving a check, but you don’t have any increased, structural power over other aspects of your life, the money is just going to go down the drain. Forget income, people are in debt up to their eyeballs, and they’re being plundered. The way things are going now, if we get UBI without transforming the underlying structure of the economy, people are going to get their UBI money on prepaid Chase debit cards loaded with fees, their financial data is still going to surveilled by anyone who can check a consumer reporting system, and they’re going to lose their checks on the back-end to abusive, fraudulent debt collectors.)

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