Wednesday, September 08, 2010

At A Given Price, Anything Can Be Attractive

Here is a perfect example of how unfettered market forces, operating through the mechanism of price, shake off the excesses of a bubble and restore the conditions for economic growth. If the adjustment is allowed to happen as quickly and as sharply as the situation warrants, the quicker the economy can get back to growth. Among other things, the reason this economic recovery is anemic is because the government has bent every sail to keep this adjustment from happening effectively, if at all.

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