Somewhere Tom posted that the economy is driven by “producers” selling to producers. This kind of statement is made to put down Keynesian stimulus strategies and bolster trickle down economics. I don’t buy it.

I don’t think one even needs to do any research on the subject. Real life examples are everywhere.

Caterpillar buys steel to produce bulldozers. Developers hire the construction companies that bought the bulldozers to develop land. Houses are built- because of consumer demand for housing.

What if the dozers were sold to make a commercial venture? Say, an oil refinery (like that’ll ever happen). It’s ridiculously simple to understand that the end user demand for gasoline is the driving force of economic activity.

Maybe I misunderstood Tom’s point because I can’t see how anyone would expect the capital goods market to be self-supporting.