MASON GAFFNEY, +1, IRVING FISHER, 0

“Stock prices have reached what looks like a permanently high plateau.”

Irving Fisher, 21 October 1929SVs-to-GDP-1024x548

Gaffney

<– “A rise in land prices cannot simply flatten out at a high plateau because the increment has become part of the expected return that buyers are paying for, and lenders are relying on. So prices that cannot rise further have to drop: there is no equilibrium level at the inflated level of the boom ….”

“Cleaning up the mess from the last few manic years will cost sweat and tears and some fortunes, whoever undertakes it. Lower rents and land prices will finally let us recover, but the process of getting from here to there entails a fall from illusion to reality, from high to low, that will agonize many ….”

“New administrations will prolong the agony by trying to defer it. They will bail out a few of the victims and many of the culprits by raising national debt and inflating the currency to validate bad debts and sustain land values.”

– Mason Gaffney, “After the Crash: Designing a Depression-Free Economy

———————————————————————————–

Many thanks, Ed Dodson, at the School of Cooperative Individualism