Mike and the late Merton Miller during a Nobel laureate panel at the 1999 Milken Institute Global Conference.
Mike asserts there is no one right way to capitalize a corporation, and that no single structure can be correct at all times. Sometimes, as in the late 1980s, companies in general would have been advised to deleverage by issuing equity. but for much of the 1970s, conditions generally favored debt financing. Yet, Mike believes, for certain companies at certain times – such as airlines in the 1960s – even a dollar of debt is excessive, because risk in capital structure should vary inversely with business risk. Rote references to the "junk bond king" perpetuate a one-dimensional caricature of a multi-dimensional financial innovator. Consider the variety of corporate divisions reporting to him at Drexel Burnham Lambert:
"Milken's real contribution was far greater than simply to sell portfolios of bonds. His real contribution was to get investors to understand that the stock and bond markets were not really separate markets. Milken created a tremendous pool of liquidity and guided its use with surgical precision. He did it in a way that took an often bloating and ailing American economy and made it lean, mean and resilient. Much of the strength and resilience of the economy today – including its ability to rebound in times of adversity – is due to the way people using Milken's financing vehicles remade ailing companies or put their entrepreneurial zeal to work."