Arthur Keynes is the man largely responsible for creating the economic theories that justify our current form of big government capitalism. He is the man most commonly cited to defend fiscal stimulus and bailout packages and is followed by most modern economists, but is he the true father of abundance, and the current economic collapse the attempt to create abundance has created?
Everyone is looking for convincing evidence that prices have bottomed before concluding the recession is on the way out. I strongly disagree with that approach. Rising prices in the stock market reflect the speculative mood of investors and the lack of alternatives, it’s not a measure of new productive jobs. Rising prices for housing should actually be considered a negative given the millions of homes still waiting to be sold, if anything we should hope for lower prices so the market can clear and construction can resume. Rising prices for consumer goods or commodities can just as easily reflect a reduction in supply as an increase in demand. Prices are not irrelevant, but almost.