“So why hasn’t it worked just when we need it most? My theory is that the Keynesian apparatchik in both Japan and the US welcome economic and financial crises as great opportunities to grab power. So they come to our rescue with massive spending programs financed with lots of borrowed money. The Japanese government built roads and bridges to nowhere that nobody needed. The US government can’t seem to even do that. Instead, the stimulus spending has been focused on keeping unionized public workers employed. The government’s intrusion into the economy, with its huge deficits and mounting debt, depresses the private sector. Watching the central bank enable it all by purchasing some of the government’s debt is even more depressing. This is why quantitative easing doesn’t work.”
*I hasten to add that I suspect his S&P earnings estimates are total crap.