Kling on Kindleberger

Kindleberger was an economic historian, who wrote extensively on the Depression and on historical episodes of speculative frenzy. He noted that these episodes, such as the Dutch Tulip Mania in the 1620's and 1630's or the South Sea Bubble in England in roughly 1710-1720, had common elements. A country achieved wealth as a result of the combination of winning a war and encountering a new market opportunity. Kindleberger called this process "displacement." Displacement resulted in early speculators achieving riches, leading masses of people to join in, resulting in overspeculation. This was followed by a panic, a crash, and an economic recession. This model of fluctuations was laid out by Kindleberger in his book Manias, Panics, and Crashes.Econolog

Well, sound like the lil Bush plan.We entered Baghdad on 2003, the start of the housing bubble. Did we get mania from entering Baghdad?  Wow, that would require a kind of collective unconsciousness. We would be thinking, like the first gulf war, we came home and had the Internet bubble.  Was it a plot? Did we unknowingly elect baby Bush so we could smash Arabs and  have an Internet bubble?

I am serious here.