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Politics : PRESIDENT GEORGE W. BUSH
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To: Neocon who wrote (615714)9/1/2004 3:48:22 PM
From: DuckTapeSunroof  Read Replies (1) of 769670
 
"The market does not weed out everything, because market pressure depends upon both competition and informed consumers, and neither competition nor knowledge is perfectly distributed. That there is nothing more efficient than the market seems to have been proven. What has not been proven is that the market is will not tolerate a fair amount of inefficiency and deceit."

Correct. A prerequisite for a fair and well-functioning free market is the Rule of Law (including such things as regulation of those market actors who exercise monopoly power to disadvantage potential competitors, or those who perpetrate fraud upon their ownership base)....

One comment though: 'perfect knowledge' is no longer assumed by modern economists, rather, it seems to have been pretty effectively refuted by statistical analysis. Still... a properly functioning free market will be ORDERS OF MAGNITUDE better at calculating and discounting economic outcomes then any possible collection of government bureaucrats.

"Yes, the government can finance its inefficiencies."

LOL! Only as long as it has favorable access to the credit markets. why not ask Argentina or Brazil or Russia (or countless other nations in history who have debased their currencies and run fiscally reckless accounts) how easy it is to 'finanve their inefficiencies' once access to credit markets is cut off?

"But inflation automatically raises alarms, and so does slow growth. Thus, the electorate will only tolerate so much........"

In good time, after much damage has been done. 'De Nile' ain't just a river in Egypt....
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