Notes on 2026 Levy Economic Conference (part one)
James Keenan
On Friday, May 8, I attended the Levy Economic Conference at Bard College in New York's Hudson Valley. This was the "40th Anniversary" iteration of this conference and the third time I myself attended in-person. (I and some other readers of this list also attended the 2022 Levy Summer Seminar on MMT, Minsky and Godley. See here for a series of posts on that event.)
Here are brief comments on the morning session of this year's conference. Other readers of this list who attended should post about their own experiences. As will become apparent, there were a lot of provocative insights -- so many that this post will only cover the first half of the conference.
Levy Institute president Pavlina Tcherneva welcomed attendees by arguing that precarity is now the U.S. economy's defining characteristic; its default econoic model. She characterized the Institute's focus as the development of policies promoting economic security for U.S. families while investigating the financial architecture needed to support that security provisioning.
William H Janeway gave the morning keynote. If you are of (ahem) a certain age, you may recall the widely syndicated mid-20th century economic columnist Eliot Janeway, William Janeway's father. Janeway earned a Ph.D. at Cambridge University under Richard Kahn, Keynes' collaborator and the creator of the multiplier. He left academia to become a venture capitalist, then re-engaged with economics when he became a friend of Hyman Minsky. He admired Minsky for stressing the role of uncertainty in Keynes' thought: "Keynes without uncertainty is like Hamlet without the prince." Janeway's talk was replete with Minskyisms and Keynesian/Minskyesque nuggets: Liquidity preference is something which, the more you need it, the less available it is. The investment theory of aggregate demand and the finance theory of investment. Wages are set in money terms, as are debt contracts. Wage stickiness is a feature of modern capitalism, not a bug. Janeway covered how stability breeds instability, the three stages of finance and characterized the current financing of the AI bubble as a specific type of Ponzi-stage investment: PIK-toggle investment. Janeway made specific reference to the work of other economists, including Brad DeLong and Luigi Pasinetti.
In the conference's first panel discussion Gennaro Zezza and L. Randall Wray reflected the Godley and Minsky sides of Levy scholarly thinking. Speaking of the AI bubble, Wray, working along lines developed in a Levy Institute working paper from earlier this year, argued that that bubble is well into the Ponzi-stage of the financial cycle, claiming that the AI bubble is 17 times as large as the late-1990s dot-com bubble and 4 times as large as the mid-2000s housing bubble. He decried the "shadow-bank financing" of AI; said that "For AI, we are the prey, not the consumers"; and characterized AI as "useful in supporting a domestic police state -- the rest is hype." He also noted the dangerousness of synthetic risk transfers.
The second panel discussion was titled "Energy, Entropy & Economic Crises" and featured James K Galbraith -- yet another economist son of a mid-20th-century economist/political advisor -- and Chris Kennedy, native of Britain but now at the University of Victoria, British Columbia. Galbraith posed this question: "Nearly 100 years after the Great Crash and Great Depression, do we really know what caused it?" That question was actually answered -- or at least responded to -- by Kennedy's talk, which argued that the Great Depression of the 1930s should be seen as a period of transition in energy production and consumption -- from coal to petroleum. He noted that in 1926 coal was king, while petroleum was viewed as scarce and being stored as a hedge against uncertainty. In 1929, however, new oil fields were discovered in Texas, petroleum prices dropped and the "future supply of crude oil was no longer an uncertainty." Over the decade of the 1920s, tractors increasingly replaced horses in agricultural production, which freed up the 25% of farm land that was used to graze horses, which in turn led to a big drop in the price of farm land. Was the Great Crash triggered by the transition from King Coal to Big Oil? I'll have to read more about this.
As you can perhaps tell, these presentations had me furiously taking notes -- and this only takes us to lunch! I'll have to write up the balance of the conference in a later post.
Warren Mosler
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