2025 Levy Conference: Notes (Part 1)
James Keenan
On June 16 I had the opportunity to attend the Levy Institute's 32nd Annual Conference at Bard College in New York state's Hudson Valley. This was the first time the conference had been held in person since 2019, before the COVID-19 pandemic. This year's theme was Money, Finance, and Economic Strategies in Fractured Times.
This will be the first of two or three posts I will make to this list about this conference. Other readers who were in attendance, please share your observations. Because I'm working from my hand-written notes, in my posts I'm going to offer just a taste of the presentations at this conference. I expect that Levy will put videos on their YouTube channel, but don't have a date for that.
New Levy Institute president Pavlina Tcherneva led off the conference, speaking of "structural fissures in the U.S. and global economies" which pit "Wall Street and Silicon Valley" against "American families." She emphasized the need to study "long-period Minsky" -- and indeed Minsky's periodization of U.S. capitalism was extensively discussed in the subsequent session. She also spoke of the "self-paralysis of the administrative state."
Session I: Beyond Minksy Moments
Moderated by Talmon Joseph Smith of The New York Times, the first session featured three speakers.
Daniel Alpert of Westwood Capital spoke on "How Minsky's Money Manager Capitalism Will Frustrate the Purported Code of U.S. Economic Nationalism." Alpert took up the Minsky periodization of U.S. capitalism and argued that we are now in a process wherein Money Manager Capitalism is transforming into ... something else as yet undetermined. He contrasted Minsky's periodization with that of Karl Marx and Joseph Schumpeter. (Yes, Marx made an appearance at this conference!) Alpert sub-divided Minsky's Money Manager Capitalism into three sub-phases and argued that what finance is seeing now is a shift from money managers being incentivized to maximize returns to being incentivized to maximize the financial assets they have under management -- which leads them to try to do no worse than their competitors. Alpert argued that there has been a global capital glut for the past fifteen to twenty years -- a persistent excess of global production relative to aggregate demand (with the pandemic as a momentary exception). This leads many countries -- not just China -- to engage in rampant dumping, creating a "post-Ricardian environment." The working class has been under relentless economic pressure during late Money Manager Capitalism. The benefits of growth are flowing to capital in a way "not sustainable to social harmony." Alpert decried the rise of illiberal democracy and the kleptocracy and foresees "Minsky Moments v2."
Alpert's presentation was the most provocative of the conference and I look forwarding to catching it again on video.
Leila Davis of U Mass Boston next spoke on "The Evolution of Minsky Regimes in the US Nonfinancial Corporate Sector." Davis argues that since 1970 publicly traded corporations have become increasingly financially fragile as analyzed via Minsky's hedge-speculative-Ponzi lens. Many firms enter public trading already in a Ponzi state, i.e., unable to roll over either interest or principal on their debts. This is especially true of smaller firms, which suffer from "negative sources of cash", and this is true across business sectors.
Rogerio Studart of the Brazilian Center for International Relations spoke next on "Financing Development in Times of Climate Crisis: A Minskyan Approach." He touched on Keynes's liquidity preference theory as well as Schumpeter and Minsky, as well as on two-fold climate risk: physical and financial.
Session II: Economic Policy in the Age of Trump
This session was moderated by Ryan Cooper of The American Prospect and featured three of the best-known Levy Institute associates. What was unique about it was the fact that the social science data under examination in these talks was as much political data as economic.
Pavlina Tcherneva spoke on "Pocketbook Economics and the American Vote." She argued that the U.S. electorate votes in favor of progressive ballot initiatives (e.g., raising the minimum wage) while at the same time voting for Donald Trump. The shift of working-class voters toward Trump and the Republicans is geographically correlated with higher poverty rates and lower rates of labor force participation. Non-voters actually have more progressive views than voters. Democrats have been losing momentum in swing states since 2008. They've become "the party of the comfortable classes" at a time when most people are not comfortable. From the 1980s onward, the top 1% has captured most or all of the benefit of economic expansions. The federal Job Guarantee and federal management of health care track well in polls, but both the Obama and Biden administrations pivoted toward deficit reduction. Advocates of the "Abundance agenda" like Ezra Klein overemphasize the benefits of deregulation and underemphasize power relations. What is needed is a political vision consistent with Franklin D Roosevelt's Second Bill of Rights.
James K Galbraith of the LBJ School of Public Affairs asked, "What is Economic Policy For?" He continued Tcherneva's focus on U.S. politics, observing that Democratic voters were becoming concentrated in the two tails of the income distribution while Republicans occupied the middle (though they are controlled by an "oligarchic clique"). Bernie Sanders had a clear, pro-working-class message in 2016 but his message became less clear in 2020. Galbraith characterized the Federal Reserve as a "bankers' cartel" and called for decapitating the oligarchs.
L Randall Wray addressed "Should We Worry about the Deficit(s)? An MMT-Minsky Perspective." This presentation addressed recent chatter about the alleged decline of the U.S. dollar as a reserve currency. See his recent Levy Policy Note, "Ratings Agencies Downgrade the Dollar’s Exorbitant Privilege".
TO COME: Keynote Session and Session III, "U.S. Policy and the Global Economy."
Jay Mills
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