My last post on Slugger, which mapped three decades of slowing growth in the US was met with the response that I must be a Keynsian. I’m not. Actually I’m not an ‘anyone-ian’ but my views are more complicated than I have previously outlined on Slugger.
Many of the things people believe about markets are actually not true. For example, 90 per cent of investment expenditures are drawn from operating profits, not stock. As a result of takeovers and buybacks in recent years, more stock has been retired than issued, resulting in the cold, hard fact that net new stock offerings were minus eleven per cent of capital expenditure between 1980 and 1997, making the stock market a negative source of funds.
The political left, meanwhile, trades in sentimental and economically illiterate caricatures that don’t bear up to scrutiny.
Now that I’ve alienated everyone where does that leave me? Mostly laughing at the idea that the recession is over. However, unlike the catastrophists of both left and right, I don’t think recessions have any progressive qualities whatsoever. People can complain about the ‘greed’ of the Celtic Tiger or the UK’s decadent boom in second-hand houses but both were better than what we are now faced with. What’s the real question in politics? It’s the stupid economy.