I wonder if there is such a thing as idle assets.  If one wishes to sit on his money for years because the costs and risks of deploying it are too high is that any different from a land owner who wishes to speculate on a piece of property rather than plant it or a factory owner who wishes to idle a factory machine until the demand for its output rises.  These are all the same economic decisions.  Even wealth withheld from what one may consider ‘productive’ use creates value in the form of security, potential,  and stability.  Everything that can be measured is not worth measuring;  everything that is worth measuring cannot be measured. Central authorities miss this when they think they know better how our wealth and assets should be deployed.

The so called trickle down effect of rich people spending money on frivolous luxuries is illusory.  It is a relatively small portion of aggregate demand.  The greater demand is from the growth in spending from the lower economic strata.  Economic history is a story of luxuries becoming necessities.  This is stimulated by high innovation and investments that drastically reduce the costs of common items- from steel to computers to cellular phones.  These innovations spawn entirely new industries.  Respect for these innovators like Jobs and Musk is as much cultural as economic.  Populist rhetoric that these giants and innovators owe their success to political magicians subverts that respect that they are due.

Keynes understood that wages were “sticky”. Because of unions (and todays minimum wage laws),  wages are less subject to market adjustments that kept unemployment low.  His answer was monetary stimulus, leaving the gold standard, tariffs, and government spending even though he considered tax cuts to be a faster stimulus.  Keynes was a very bright man who believed  that in the dire times post WWI that Laissez faire would  not bring the solutions in time.

While he believed the monetary systems must be managed he was most often very critical of the those who were doing the managing.  If only they were as brilliant as he.  They never are- thus the “fatal conceit”.

Keynes and FDR (who Keynes sharply criticized for pushing major reform during a weak economy- sound familiar?) would have been chagrined to see that the effort to increase employment even with government programs would have degenerated into a massive welfare state with low worker participation and a high and growing  long term dependency rate.  This state of affairs is destructive in many ways more than economic.  The longer it persists the more difficult and painful it will be to correct.