The stock market continues to tumble downward this morning. Why? Why didn’t the passage of that so-called “economic stimulus bill” fix matters? Are speculators still waiting for our Dear Leader to sign the bill (see here)? Perhaps, but I expect the markets have already discounted the “economic stimulus bill”. What investors probably fear is still greater stupidity yet to come.
Bearing Drift (here) ends one post with this line.
The free market is dead.
If you google that phrase, restricting yourself just to the last month, you will get about 380 hits. Without restrictions, you will get 2,160 hits. The phrase seems somewhat popular. Is the free market dead?
P. J. O’Rourke is one of those who uses the phrase. So his is one of the articles that turns up in a search.
The free market is dead. It was killed by the Bolshevik Revolution, fascist dirigisme, Keynesianism, the Great Depression, the second world war economic controls, the Labour party victory of 1945, Keynesianism again, the Arab oil embargo, Anthony Giddens’s “third way” and the current financial crisis. The free market has died at least 10 times in the past century. And whenever the market expires people want to know what Adam Smith would say. It is a moment of, “Hello, God, how’s my atheism going?”
Adam Smith would be laughing too hard to say anything. Smith spotted the precise cause of our economic calamity not just before it happened but 232 years before – probably a record for going short. (continued here)
In the long run, the answer is no. The free market is not dead. In the short run, however, I don’t think we can expect stocks to climb upward especially fast. This generation has yet to learn its lesson. However, there is plenty of reading material. One place to start is to finish reading O’Rourke’s commentary.
