I also don’t buy the idea that the sufferings of the middle class were inevitable. Over the past 15 or so years the financial sector has grown due to the vast amount of money that it has been able to extract. Where would we be if all of those bright hard working people and capital spending had gone to the real economy? I’m not suggesting a command economy, but senior policymakers decided to let leverage and risk run to dangerous levels. Your comment seem to indicate that this was simply the landscape of the world, but it seems more to be the product of a deliberate policy from the Federal government.

Sadly, my take from all of it is ever more disenchantment.

When financial markets rather than the real economy are being used to gauge where the economy is at and when short-term thinking blatantly disregards the potential long-term harm of policies, then the affirmation of your hosts of trying to be “wise stewards” rings hollow indeed.

Not only hollow, but arrogant, misleading and an outright oxymoron.

They need to look up the meaning of wisdom.

IMO its worthwhile make a distinction between, on the one hand, a transfer of fungible assets leaving the same amount of asset still available for spending/investment, and, on the other hand, a spending decision where fungible assets are exchanged for goods or services, causing those goods to be used for one purpose rather than another. The latter category is the final decision on how those units of stored value get used. So when a business buys a factory, that is a final decision whereas paying a dividend or doing a share buyback is a transfer (of course the transfer may be good or bad for the business, but its not a final decision for the overall society). From my POV, taxes are transfers and low taxes are either good or bad to the extent that the private sector makes better or worse final spending decisions than the govt.

Unless I missed it, he did leave out perhaps the worst of all decisions: the hundreds of billions spent on share repurchases at very high prices. I love share repurchases at the right time–it’s just that most managements are foolish about when and how to do it. We saw billions repurchased in 06-08, almost none earlier this year. Buy high and sell low baby!

I’m sympathetic that this perspective deserves more play than it has gotten, but IMO it misses another big part of the story that contains both more blame and more hope. The missing part focuses on the quality of spending/investing decisions by both govt. and the private sector. There are always choices about how to spend resources and most choices can be viewed through the lens of whether they pay out long term dividends or whether they immediately or quickly depreciate. Over the last few decades both the public and private sectors in the U.S. have been bent on a massive orgy of poorly considered spending that yielded low to non-existent investment return. There are more less obviously bad economic consequences to spending money on SUVs, wars, sports entertainment, McMansions, etc. instead of things like education, infrastructure, public transportation, and technological research (including alternative energy research). Keeping the economic focus only on GDP and tax rates misses/missed the boat, and contributed greatly to an economically less competitive population.

I just want to thank you for this wonderful series. I think it has been one of the most informative I have read in months. Keep up the excellent work.

I really enjoy your analysis and commentary. For that, you can eat the whole box of cookies.