From John Stuart Mill, “Of the Influence of Consumption on Production” (1844): Among the [economic] mistakes which were most pernicious in their direct consequences . . . was the immense importance attached to consumption. The great end of legislation in matters of national wealth, according to the prevalent opinion, was to create consumers…It is not necessary, in the present state of the science, to contest this doctrine in the most flagrantly absurd of its forms or of its application. The utility of a large government expenditure, for the purpose of encouraging industry, is no longer maintained.
Taxes are not now esteemed to be like the “dews of heaven, which return again in prolific showers.” It is no longer supposed that you benefit the producer by taking his money, provided you give it to him again in exchange for his goods. ….The more you take from the pockets of the people to spend on your own pleasure, the richer they grow (Obamanomics); that the man who steals money out of a shop, provided he expends it all again at the same shop, is a benefactor to the tradesman whom he robs, and that the same operation, repeated sufficiently often, would make the tradesman’s fortune…
What a country wants to make it richer, is never consumption, but production.
JS Mill is damning the nonsense of Keynes and all those who believe in “stimulating aggregate demand.”
Investment “Gurus”
Be your own “guru.” Meanwhile interesting reading here:
http://fpafunds.com/pdfs/commentaries/Caution_Danger.pdf Mr. Rodriquez says the greatest investing advice ever is: Read history! Read history! Read history! I second that admonition.
An excellent blog for new investors:
http://www.gannononinvesting.com/
A few of Geoff Gannon’s recent articles are linked below. I have no affiliation– and if I did, I would mention it upfront–but new investors can certainly learn from his Pod-casts and articles. Just read critically and think about what you can use. Geoff never went to college, but he is self-taught with (in my opinion) an excellent attitude towards investing. He seems rational while remaining focused on price versus value.
Can You Build a Liquid Portfolio with Illiquid Stocks?
Free Cash Flow: Adjusting for Acquisitions, Capital Allocation, And Corporate Character
What Are the Minimum Requirements for a Good Net-Net
Pain and Patience: Net-Nets, Magic Formulas, and Micro Caps
How to Read a 10-K: What is the Most Important Part? (Footnotes and trying to understand the customer).
Walter Schloss: 1916 – 2012
How Do You Estimate a Stock’s Intrinsic Value?
What Stocks Would Phil Fisher Buy Today?
