The volume of really, deeply stupid things I have heard and read in the media in the last week regarding the credit crisis is simply astounding. At the head of the list is that some amorphous "free market" caused the crisis. Despite what you might think from listening to some libertarians, the "free market" is really just a conceptual tool, with no single clear and direct mapping into something in the real world. Someone or something is always defining property rights and other institutional features within which markets work. Those rights and features can be smart or not smart. In the case of credit market some of the institutions were not so smart. Here is the NYT on the origin of some of the not so smart institutional features of the US credit market.
Hat tip: Ken Troske
Whew.
8 years ago
