domingo, 25 de setembro de 2011

A gangrena (2)

What has happened could not occur in a free market economy. Free markets allow prices to adjust and resources to be re-allocated automatically. Free markets don’t enable crony capitalism and a corrupt banking system. Problems develop in free markets, of course. But they amount to sniffles or the common cold. Benignly ignored, they cure themselves.

In a world of central management of the economy, every sniffle is treated as a crisis. Interventions are taken to prevent the discomfort of the common cold. Underlying adjustments that allow the economy to correct itself are deliberately suppressed by interventions. Over time repeated interventions need to be larger to cover new and larger problems created by prior interventions. Ultimately a point is reached when further intervention no longer works.

After almost eight decades of government interventions, we have reached that point. Now, it is time to start amputating or else the patient will die.

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