It was the headline that got me:
Now that would be interesting. As any good Keynesian would know, it is hoarding cash that is the evidence of consumers and investors going into a bunker. So I looked at the article, which is a very long article, and finally found the actual statement about cash. I have added the bolding below:
HOARDING CASH: Looking for safety for their money, households in the six biggest developed economies added $3.3 trillion, or 15 percent, to their cash holdings in the five years after the crisis, slightly more than they did in the five years before, according to the Organization for Economic Cooperation and Development.
The growth of cash is remarkable because millions more were unemployed, wages grew slowly and people diverted billions to pay down their debts. They also poured money into bank accounts knowing they would earn little interest on their deposits, often too little to keep up with inflation.
People holding slightly more cash in the most recent five years in comparison with the previous five years is not headline news. It is what will happen anywhere as population and inflation rise. People hold more cash because the prices they are paying are going up more or less at the same rate as their nominal wages are going up. Slowly, but slightly higher all the same. What a useless measure but it does remind me once again how useless a Keynesian approach is in understanding what’s going on.
The article does, however, paint a grim portrait of the economic world in which we live. Things are going nowhere and living standards are falling. And why that is could not be more easily explained although not by using a modern macro text. Governments have taken over the spending from the private sector and the result is as dismal as one ought to expect. Governments only waste. Governments only divert resources into sub-optimal forms of production. Governments only follow, never innovate. Increased government spending in absolute terms and as a proportion of total national outlays will make an economy poorer and then if kept up long enough actually poor. This is such obvious common sense that you would have to be a Treasury Secretary not to understand what is going on right before your eyes.