[davidxc]

I never said that P/E ratios in the US are "too high". I said that they've been higher in recent years than in past history.

This is, as you said, because the amount of money chasing investment opportunities is increasing. I agree that the reasons for this are complex, but one significant reason that the amount of money chasing investment opportunities is increasing is central bank stimulus (not just in the US, but worldwide).

The rise of asset prices definitely is a much more complex issue than just US policy, but I'd still argue that stimulus by the US is one of the causes, not only a symptom.

I agree with you that the US has been more successful in managing the 2008 crisis than the ECB, and that part of that was because we recognized that we needed stimulus earlier on in the crisis. But this doesn't contradict anything else that I said.

I also never made the claim that the counterfactual of no stimulus would have been better - I personally believe it would have been worse, since the economy and labor market would have likely went through a longer and more serious collapse. But again, this does not contradict what I said about central bank stimulus being one of the significant causes in the rise of prices in financial assets.

[AngrySkillzz]

I appreciate your response and think you're mostly on the right track. I didn't intend to call you out, more to point out a few mistakes in thinking that are common in these kinds of threads on HN (and indeed are more egregious elsewhere in the responses to this OP).

[bobthepanda]

> I also never made the claim that the counterfactual of no stimulus would have been better

To be fair, that wasn't the only option. There was the debate in 2007/08 about how much of the stimulus should be monetary vs handouts directly to taxpayers vs infrastructure. There's some who believe that the "infrastructure" portion was too small of the pie, hence the stomach for things like "Infrastructure Week" from Trump or "Green New Deal" from the left wing of the Democrats.

[mrosett]

In the abstract, I liked the idea of spending it on infrastructure, but over the ensuing decade I’ve become deeply skeptical of the ability of the US government to effectively spend more money. California high speed rail and the NY subway are exhibits a and b.

[yamoriyamori]

I agree with you (to your point) about California high speed rail: a solution looking for a problem. But NY subway is arguably something that could generate huge returns if the capex was committed to modernizing and automating the public transport of the biggest city in the USA and a major financial capital.

[bobthepanda]

CAHSR is mostly proof of a few things that America gets wrong

- heavy reliance on consultants is not a financially prudent exercise compared to building up a competent civil service, particularly since consultants want to keep the gravy train running

- sustained funding for projects is the way to build up a civil service that can push out projects; conversely, "get a ballot measure passed first and ask questions later" is a very bad model.