One of my stronger memories from the 1980-82 recession is the expression "crowding out". At that time the world pre-eminent uber-bear was Henry Kaufman of Salomon Brothers. It was Kaufman who called the bottom of the bear market in August of 1982. For, oh, two years he had been writing that growing government debt was "crowding out" private borrowers and pinching off economic recovery.
I still clearly remember the day in August of 82 when I read in the Wall Street Journal that Kaufman said that the economy was so weak that crowding out was no longer a problem. There was no business demand for money so it didn't matter. The market took off like a shot and never looked back. It was my first lesson in contrarian thinking.
Maybe I'm not the only one who remembers that connection.I've posted before on why I'd seen almost no talk of crowding out. Maybe it's making a comeback now.
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