Bad times here to stay

[Charles Brown <BrownBingb@xxxxxxx>]

NY Times, Mar. 24, 2003
OP-ED CONTRIBUTOR
Battling the Fog of Finance
By JAMES GRANT


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The truth about the three-year
decline in stock prices and the hot-and-cold-running economy is that they
have their roots in prosperity, not in war.

The paradox is easily explained. High stock prices invite capital
investment. Ultrahigh stock prices invite redundant capital investment.
Stock prices higher even than those on the eve of the 1929 crash invite
titanically redundant capital investment. No wonder, then, that business
spending on new plant and equipment has been so weak for so long: The
sky-scraping stock market of the late 1990's (which indeed commanded
valuations higher than those of 1929) induced enough corporate spending to
sate demand and cause a recession.

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^^^^^^

CB: We should report this guy to the Homeland Security Department for
spreading red economic theories.



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