First off, I really appreciate what you guys are doing with Ingenuism and I eagerly await future posts.
I have some concerns about the "Bubbles are Good" essay. What isn't addressed is: what is a bubble? What are its causes? How is a bubble different than a regular bull market? What is the role of government money-printing in creating bubbles? How does government redistribution of wealth through inflation distort the incentives within the wider market, and how does that contribute to "bubble companies" failing or succeeding?
Looking only at the average outcome of a bubble bursting is not enough to tell whether they are good or bad. If it were, it would be just as valid to say "Well of course government roads are good because how would we get anywhere without them? They're clearly a net positive!" This is not a good argument. Yes, many of the results of the dotcom bubble (Amazon, Google, etc.) were unfathomably good, but the ends do not justify the means. When talking about bubbles in the context of today's United States, monetary policy is an evil that cannot be ignored.
First off, I really appreciate what you guys are doing with Ingenuism and I eagerly await future posts.
I have some concerns about the "Bubbles are Good" essay. What isn't addressed is: what is a bubble? What are its causes? How is a bubble different than a regular bull market? What is the role of government money-printing in creating bubbles? How does government redistribution of wealth through inflation distort the incentives within the wider market, and how does that contribute to "bubble companies" failing or succeeding?
Looking only at the average outcome of a bubble bursting is not enough to tell whether they are good or bad. If it were, it would be just as valid to say "Well of course government roads are good because how would we get anywhere without them? They're clearly a net positive!" This is not a good argument. Yes, many of the results of the dotcom bubble (Amazon, Google, etc.) were unfathomably good, but the ends do not justify the means. When talking about bubbles in the context of today's United States, monetary policy is an evil that cannot be ignored.
- Garrett Garcia