From David's @BeachCitiesRealEstate Page on FB

Showing posts with label Economics. Show all posts
Showing posts with label Economics. Show all posts

Monday, October 31, 2011

More on Keynesian Economics: Next Topic for Today's Big Fail?

TodaysBigFail is a website and Facebook page devoted to videos of things going horribly wrong.  I'm nominating the fatal flaws of Keynesian Economics as its next topic!

So here's more on the demonstrated bust of Keynesian (stimulus) economics, touched on in this morning's post. This from none other than the nonpartisan think tank RAND Corporation: Where Keynes Went Wrong.

The failure of the US government's massive stimulus actions is as plain as day to all with an open mind. We'll be paying for those colossal mistakes for years to come, and that's doing nothing but damage to the real estate and jobs markets.

That the Keynesian theory upon which they were based is fatally flawed is a lesson for all to remember, most notably economics professors, textbook authors, politicians, and voters.  These diseconomic theories equating "benefits" of government spending and taxation with the merits of business investment and consumer spending have been taught, practiced, and sold like snake oil for far too long.  Just sayin.'

-David

P.S.  Don't let a politician talk you into trying to jump over anything on a BMX bike either!

Thursday, January 28, 2010

An early warning system for asset bubbles - McKinsey & Company

McKinsey & Co. is working on something really valuable: a predictive model for overheated asset markets (bubbles) like the one we're recovering from now. Key quote from the article, which first appeared in the Financial Times:

"The answer lies not in the level of debt alone, but in the sustainability of debt."


The right predictive models could be enormously helpful. We probably wouldn't have believed them during the recent real estate run-up, but I'll bet we pay attention going forward. - David