Thanks for posting it. I admire and respect Dean, but, based on a quick
reading of the summary, I worry that he has bent his argument too much
in the direction of "standard economic theory" in order to gain
respectability. In particular, I very much disagree with:
"At present, the additional consumption attributable to the bubble is
having the same negative effect on national savings as a $320 billion
budget deficit.
According to standard economic theory, this loss of savings has reduced
the amount of investment in the United States. More importantly, it has
been a major cause of our trade deficit, which in turn has led to large
U.S. borrowings from the rest of world."
This confuses an accounting identity with a causal process. The trade
deficit is as much a cause as a consequence of the stock market bubble.
Peter
