“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” — Ludwig von Mises, Human Action
A new definition of madness: legislating potent new fiscal incentives for capital spending when the longest running and most severe asset inflation in modern times has gained new and threatening momentum. That is what happened in the US last year. The chickens are already coming home to roost as the spectre of calamitous malinvestment looms large.
For years, anyone arguing that China’s spectacular economic rise was less impressive than it appeared was liable to be dismissed. There were always doubters, however, and I found myself among their ranks.
The highest and best use possible for southern Nevada land is for a hotel/casino. But these aren’t normal times. The Boyd Group, a sophisticated casino operator, bought the Eastside Cannery and the Cannery in North Las Vegas for $230 million in 2016.
The Keynesian paradigm suffered in the stagflation of the 1970s. Price inflation and unemployment surged simultaneously, which resulted in broad skepticism of the old Keynesian models while loyal Keynesians scrambled to offer explanations. Moreover, it became apparent that the Keynesian consumption function didn’t hold up to empirical scrutiny—disposable income wasn’t as good of a predictor of aggregate consumption as early Keynesian models assumed.
