Commentary On “Crisis Compels Economists To Reach for New Paradigm”
What happened? It is very simple. The premise of free advice and unregulated markets is that the market takes care of things in a rational manner. Obliviously this is not the case. There is no natural inherent law in free and unregulated markets that say that they will take care of things in a rational manner. A free market will behave freely, rationally and irrationally. Actually when you consider the huge amounts of money involved and that money corrupts absolutely it is very likely that they will behave irrationally and with a herd mentality until the herd stampedes over the end of the cliff.
