What happens when you're a Free Market Fairy true believer
Tyler Cowen Alex Tabarrok and the current financial meltdown represents a total
repudiation of everything you believe?
You descend into conspiracy theories:
Finally, my own work (pdf) unearthed the real reasons for the separation in a titanic battle between the Morgans and Rockefellers.
Would you like a tin-foil hat with that pdf?
For a description of recent events that originates on the same planet that you and I live on, you can read this post on the Freakonomics blog.
Just to put this in a broader historical perspective, we had the great depression and following that laws were put in place to govern the operation of banks. Since then there have been two rounds of deregulation of the banking industry, the first led to the Savings and Loan Crisis in the late 70s and early 80s. ( That meltdown also included the Keating Five as a side show, starring one guy who is now running for president. ) The second was this last round that led to the current financial crisis.
How many times are we going to have to go through this before the lesson sinks in - markets are a means to an end, not an end unto themselves.