I dont have a dog in the anti-Keynes fight. That said, I'm not sure where you are coming from when you say Keynes was a mercantilist. That statement is a real whopper.
If you have a point of view that is so far away from the mainstream, you need to start from the bottom up and make a case, not just state it as if it is somekind of a consensus view or something that has been well argued, vetted, accepted and peer-reviewed in a comprehensive forum of ideas.
Lets not go off on a tangent on Keynes or heterodox economics.
You dont need to be an economist or a follower of Keynes to reasonably conclude that monetary and fiscal accomodation might be a good idea in the midst and aftermath of a financial panic and economic crash.
In the wake of the crash, housing prices have fallen. Housing is the beating heart of the consumer in this consumer economy.
For years before the crash, incomes have remained stagnant.
Their are several policy levers we can use to compensate for these depressive conditions. We have seen many of these levers used so far.
For instance, Bernanke's novel use of the quantitative easing mechanism has incrementally lowered mortgage rates until a sweet spot was finally found this fall, sparking a revitalization of home buying and the first year over year reversal (I think) of home value decline in 6 years.
Monetary policy is a difficult problem of crowd psychology, feedback and control. Bernanke's use of brackets that will let participants unambiguously know when the accomodation will be stepped down (unemployment below 6.5%, 2-year inflation at 2.5%) might help to smooth out the uncertainty of potential policy shifts.
The wall of worry this market needs to climb is all based on the Virtual Civil War in Washington.
Production (individual ability to earn) is the beating heart of the consumer.
Housing is the slave-driver. Still beating, but transitively this time.
Put someone in a house with a mortgage and watch them all but kill to get and keep a job. Management gets away with increasing productivity without increasing wages proportionally because the homeowner has capacity to pull the oar harder to avoid the whip from his debt.
Oh, and house values didn't bottom this fall. They bottomed near the end of 2011, and it was pretty obvious.
Unfortunately, mREITs aren't pegged to house values, and other forces spent the year kicking them around. A lot of the early-year equity gains were probably from people betting the housing values, but then the Fed gave rates a haircut and that made mREITs a hard way to handicap RE, but still fun if you knew what the other variables are.