Jeremy Grantham, chairman of GMO, has some wise advise and comments in his quarterly newsletter. Here are some highlights:
It is obvious to all of us that these are momentous days in which government actions
may well have make-or-break impact, but my confidence in government and leadership is at a low ebb.
Economic advice for President Obama covers the waterfront, and even the near consensus case for great stimulus is lacking in historical certainties or intellectual rigor.
Even the Japanese often express dismay at the costs they have paid due to their heroic level of public spending. Bridges to nowhere have not been as stimulating or productive long term as a focus on energy conservation and oil and coal replacement technologies would have been.
Japanese individuals went into the 1989 event with a very high savings rate and very high accumulated savings. In contrast, our households go into our crunch borrowed to the hilt (or beyond) and painfully undersaved.
It is worth remembering that real wealth lies not in debt but in educated people, laws, and work ethic, as well as in the quality and quantity of fixed assets and the effectiveness of corporate organization.