@ Aristippus
For Hoover don’t forget that he personally implored/commanded captains of industry in a private meeting to reduce wage-rates last out of all the costs of their businesses.
The amount of evidence on the Great Depression makes the anti-liquidationist position untenable and inexcusable.
Debt as a % of GDP remained fairly stable from about the mid 19th century to about 1930. It rose dramatically from that point and peaked in 1933, 4 years after the great depression already began. Kinda hard to point to this variable as the cause when it occurred after (and because GDP fell dramatically).
Next, and this was always a major problem I had with Minsky’s work, what causes the private debt ratio (as a % of GDP) to rise so dramatically? Excessive appetite for risk cannot, by itself, increase the supply of loanable funds (which requires either (a) a higher savings rate or (b) monetary expansion in the capital/money markets). A higher demand for loanable funds does not automatically translate into a higher supply of loanable funds. It could just lead to higher interest rates.
The rising private debt ratio is merely one symptom of inter-temporal/monetary disequilibrium (what Austrian’s focus on). It isn’t, in itself at least, problematic; again, it’s only a problem when it’s the result of disequilibria in money/capital markets. I’ve also had a real problem with the Minsky’s “moment,” and the fact that he doesn’t explain how private debt accumulation automatically leads to malinvestment. In fact, I’m not sure malinvestments can even exist in the Keynesian framework of homogeneous capital and extreme aggregation.