Higher Interest Rates Lead to More Investment

That appears to be the central claim of Kevin Warsh and Stanley Druckenmiller in a Wall Street Journal column criticizing the Fed's asset buying program. The central claim appears to be that because asset prices have rising, companies have been discouraged from undertaking productive investment. While Warsh and Druckenmiller are certainly right that the asset buying program has had limited benefits for the real economy, it doesn't follow that the economy would be stronger without it.

First, t...