From the “Credit Crunch” of ‘66, to the March Massacre of Silicon Valley Bank The Historical Hyman Minsky

Hyman P Minky documented historically the necessarily institutional function of government and central banks in the circumstance the natural processes of a financialized advanced profit seeking capitalist economy is inherently, prone to bouts of severe instability which if left alone will lead ultimately to credit crunches radical debt deflations runaway inflation or deep depressions. Minsky acknowledged the tendency toward market “coherence” which has been identified by writers on economics at least back to Adam Smith, “The invisible hand” or Law of value. However, in his view this tendency toward coherence, which may simply be understood as our common social interdependence, is not the only force operating. Coherence, like gravity, is a weak force not capable of resisting explosive bouts. The fact that capitalist economies to not spiral upward or downward in radical inflations or deflations (sometimes they do and have) is due only to the evolution of systemic management on the part of social institutions, central bank, government, regulators, or major institutional private sector players Minsky was an “original historian” of the movement toward instability in the mid to late 20th century. His theory of stages is explored and updated in this article.