"What’s depressing about all this is that Say’s Law is a primitive fallacy"
Cowen cant see why corporate hoarding is a problem. Like Riedl and Cochrane, he concedes that there might be some problem if corporations literally piled up stacks of green paper; but he argues that its completely different if they put the money in a bank, which will lend it out, or use it to buy securities, which can be used to finance someone elses spending.
But of course there isnt any difference. If you put money in a bank, the bank might just accumulate excess reserves. If you buy securities from someone else, the seller might put the cash in his mattress, or put it in a bank that just adds it to its reserves, etc., etc.. The point is that buying goods and services is one thing, adding directly to aggregate demand; buying assets isnt at all the same thing, especially when were at the zero lower bound.
Whats depressing about all this is that Says Law is a primitive fallacy so primitive that Keynes has been accused of attacking a straw man. Yet this primitive fallacy, decisively refuted three quarters of a century ago, continues to play a central role in distorting economic discussion and crippling our policy response to depression.
http://krugman.blogs.nytimes.com/2013/02/10/still-says-law-after-all-these-years/