>
> Finally, I did implicitly respond to the "subject" you mistakenly claim I
> was changing, namely, to your "point ... that certain post-Keynesians have
> criticised Keynes for neglecting the stock of financial wealth". This I did
> by pointing to the mistake involved in many "Post Keynesian" treatments of
> the "stock of financial wealth" (e.g. those of French "circuitists" and
> Basil Moore), i.e. to their mistakenly "associating idle balances ... with
> some aspect of current saving." It's also the mistake found in your
> connecting (following Toporowski) of "savings" , "too much saving/profits",
> to financial asset price inflation.
[...]
> I could of course be mistaken so that it's possible, for example, for part
> of current saving to be assumed to fuel financial asset price inflation
> without the assumption violating the national income accounting identity
> (e.g. in a simple model where this identity is Y necessarily equal to C plus
> realized I, to have some part of current saving (Y minus C) fuel financial
> asset price inflation without it necessarily meaning that Y minus C would
> have to be less than realized I).
It would indeed be pretty odd for people to argue that one side of an identity could become 'too much' for the other. You might wonder how such an idea could get through peer review and why the many people reading drafts of the books would all have missed the absurdity you spotted so easily. But then you might take another look, since if that's how you've interpreted the argument, you might have missed the point. We've had this conversation before.
[The idea of 'too much saving'] we talked about in that Fitch thread is a subset of [ideas in which the stock of financial wealth is important] which we have been talking about in this thread. Clearly, the 'too much saving' idea does not relate to the current flow of investment. Rather, it relates the stock of financial wealth, both as stores of value and as claims on currently produced value, to currently produced value. IIRC, in that debate I said I would not be confident arguing that there had been in fact 'too much saving' in that sense in the lead-up to the crisis, I was simply pointing out that such arguments are not necessarily naive or a contradiction in terms.
I can see where the confusion arises - it is that we use the same word 'saving' to refer to both (1) the difference between the two flows of income and consumption expenditure, and (2) the stock of stores of value. Ideally we should not use the same term to mean both things. But when you say that post-Keynesian treatments are mistaken in "associating idle balances... with some aspect of current saving", you are wrong. They are related, in that when units save, they do not merely refrain from spending, but necessarily accumulate some asset or another, i.e. add to their stocks of wealth. This is the basic point Chick and others have emphasised in this criticism of Keynes. It has implications beyond the possibility of 'too much saving', and you don't have to accept some version of that to accept the importance of the stock of financial wealth.
Cheers, Mike