Social value of spending

[vit_r]

Storage eats wealth, while productive enterprise creates it. People know this. No one "invests" in gold or oil when a financial system is working. They do so when it is broken. Like now.
...

The right way to sustain aggregate demand and maintain current income is to figure out what we should be investing in — not stocks, bonds, or CDOs, but factories, windmills, or schools — and then to put current resources to work. Our financial system is failing spectacularly because it erred grievously. It built homes and roads and sewers that oughtn't have been built, it "invested" in vacations and plasma televisions, and it paid itself handsomely for doing so.

Comments

[girit.livejournal.com]

How you would explain previous bubble bursts that were not really driven by investment in consumer based assets
(such as internet bubble and - i do not recall - but there was another 'bubble' between internet and the current one (?)

[vit-r.livejournal.com]

I or the author of the article?

By the way the Internet had become a bubble when the banks started offer courses "Investment strategies for the housewife"

[girit.livejournal.com]

I assumed you agree with the author so you can expand. Of course I understand that your point of view might be not exactly reflecting the authors.

What you are describing is the symptom of the bubble (any bubble). When it becomes mass, and people who have no understanding of the matter are heavily engaged... this is usually one of the signs that it is nearing explosion.

[vit-r.livejournal.com]

Bubble is an idea.
"A house is a good investment."
"Internet is a good investment."
"A bulb is a good investment." (If we consider the first crash)

If you do not reach masses, this is not a bubble but a trivial market overheat.

By the way there is no such thing as Web 2.0 bubble despite of all money burnt in this market.

[vit-r.livejournal.com]

PS: I use this LJ as a notebook. I quote not the meanings I agree with but the texts that are interesting.

[girit.livejournal.com]

Got it. For me the important part of LJ is that it is interactive. So when people post other's people materials - its not so much important for me whether they agree or not - but their thoughts about the subject they have referenced.

[vit-r.livejournal.com]

Размер постингов в ЖЖ - это не размышления, а заметки.
Тем более, что всё пишется "на ходу" без подготовки и раздумий.