Reply #37: But there's a different way of looking at it than that, Doc...

[IrateCitizen]

When you invest money in infrastructure, such as roads, railroads, schools, power generation, parks, etc. -- you aren't simply sinking money into manufacturing a single item. Rather, you are creating an ongoing source of societal wealth. Investment in schools (programs and physical structures) is an investment in future generations. Investing in railroads and roads helps improve commerce. Investing in parks makes cities preferable places to live, resulting in more bright people choosing to live there. Investing in a world-class power grid and generation facilities helps prevent problems like the blackout of 2003.

When that capacity is used strictly for consumer goods, however, little of lasting value or creation of return is developed. Consumer goods are simply used and then tossed away.

You're also neglecting the rold of the advertising industry in this "irrational exuberance". The 1950's was the boom of the ad business in the US, and its methods gradually shifted from simply marketing products to helping create dissatisfaction in order to make people think those products were a necessity. JKG talks about this a good deal in The Affluent Society.