It will be interesting to see the post analysis cranked out in Phd thesis over the next decade or so. AFAIK, the last year has been a resounding vindication of J.M. Keynes. People fail to consider what a large fraction of economic conditions are linked to psychology, and Keynesian economics leverages that angle significantly. The power of directed intervention is to avoid the immediate fatal collision.
The longer term issues of course remain to be dealt with, and that will be interesting. If you want to see Obama really get credit, you will need to see some of the inflated numbers in the 100's of billions to trillions that were "spent" on bailouts, magically get recouped, and of course, that will happen for some very large sums (already has for some). When people toss out numbers like $12T "spent" on the bailout, they should not be surprised to see a $T here and a $T there get "recovered". Of course the various media bents will spin such news one way or the other according to their proclivities.
What I find interesting is the degree of yelling and screaming by some bloggers, who have been staunch stock bears for the last year+, that the whole game is rigged, and one should avoid investing in stocks. One might well now get quite cautious about stocks, but if you were that way for the last year, ouch. Looking at real estate in certain places, its starting to look like stocks a year ago. The bears are yelling and screaming that we'll still drop another 30%. Buy low and sell high... |
