> 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
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Um, Harry Magdoff and Paul Sweezy....gotta have an expanding repertoire of stuff to invest in, otherwise it's just building redundancies--just look at the auto sector. There's plenty of innovation that needs to be done in the energy and materials sector in order to severely reduce energy costs per unit of output especially if energy prices continue to climb and how about enviro technologies for reducing effluent profiles per unit of output too.....But C's won't invest unless the rate of return is projected to be sufficiently high compared to just trading on already existing assets, so we'll see.......
Ian