>
> Really? Can a server farm be redeployed so easily? And if the problem
> is just too much capacity, what good is redeployment?
But does Brad believe in too much capacity? To wit, his post of Jan. 10 (http://nuance.dhs.org/lbo-talk/0101/0507.html) :
>The ghost of the monetary overinvestment theory of depressions still
walks the night, undead, seeking to drain the economy of its blood...
Seventy years ago, John Maynard Keynes wrote:
It seems an extraordinary imbecility that this wonderful outburst of productive energy should be the prelude to impoverishment and depression. Some austere and puritanical souls regard it both as an inevitable and a desirable nemesis on so much overexpansion, as they call it; a nemesis on man's speculative spirit. It would, they feel, be a victory for the mammon of unrighteousness if so much prosperity was not subsequently balanced by universal bankruptcy. We need, they say, what they politely call a 'prolonged liquidation' to put us right. The liquidation, they tell us, is not yet complete. But in time it will be. And when sufficient time has elapsed for the completion of the liquidation, all will be well with us again.
I do not take this view. I find the explanation of the current business losses, of the reduction in output, and of the unemployment which necessarily ensues on this not in the high level of investment which was proceeding... but in the subsequent cessation of this investment. I see no hope of a recovery except in a revival of the high level of investment. And I do not understand how universal bankruptcy can do any good or bring us nearer to prosperity...
He was right then. He is right now.
>Brad DeLong
Christian