The peak of the 2020 to 2021 speculative cycle will be studied in future editions of Kindleberger the way the South Sea Bubble and the dot-com peak are studied in current ones: as a unusually well-documented case of euphoria, where the evidence of excess is preserved in SPAC prospectuses, venture term sheets, crypto white papers, and the social media commentary of the participants in real time. What made 2021 unusual, even by the standards of speculative manias, was the simul

Charles Kindleberger's Manias, Panics, and Crashes, first published in 1978 and updated through five editions, is the most useful book ever written about financial bubbles — not because it provides a predictive model but because it provides a diagnostic one. Kindleberger, drawing on Minsky's theoretical framework and his own deep knowledge of financial history, described the anatomy of a speculative mania with enough precision that subsequent bubbles can be mapped onto his sc

Hyman Minsky spent most of his career at Washington University in St. Louis largely ignored by mainstream economics, which had concluded — with the confidence that precedes most large intellectual mistakes — that financial markets were self-stabilizing and that the business cycle had been tamed. Minsky argued the opposite: that financial stability is itself destabilizing, that the longer a period of economic calm persists the more fragile the financial system becomes, and tha

Joseph Schumpeter's concept of creative destruction rests on a mechanism that is easy to describe and politically difficult to allow: the elimination of unproductive capital. In Schumpeter's model, recessions perform a necessary function — they clear the economic landscape of firms and capital structures that are no longer viable, freeing resources for more productive deployment. The recession is the forest fire that makes new growth possible. The ZIRP era was, among other th

The venture capital boom of 2020 and 2021 was not primarily a technology phenomenon. It was a monetary phenomenon that expressed itself through technology. The distinction matters because the lessons drawn from the subsequent correction are different depending on which explanation you accept. The technology-as-cause narrative goes like this: extraordinary technological progress — cloud computing, AI, remote work infrastructure — created genuine business opportunities of unpre

Between 2008 and 2022, with one brief interruption between 2015 and 2019, the Federal Reserve maintained interest rates at or near zero. The European Central Bank and the Bank of Japan went further — negative nominal rates, a policy innovation so radical that its architects treated it as temporary and its critics treated it as dangerous. What followed was the longest period of artificially suppressed borrowing costs in the history of modern central banking, and its effects on