More proof Keynes was right.
'What We’ve Learned from the Financial Crisis' by Justin Fox
http://hbr.org/2013/11/what-weve-learned-from-the-financial-crisis/ar/pr
"Five years ago the global financial system seemed on the verge of collapse. So did prevailing notions about how the economic and financial worlds are supposed to function.
The basic idea that had governed economic thinking for decades was that markets work. The right price will always find a buyer and a seller, and millions of buyers and sellers are far better than a few government officials at determining the right price. In the summer of 2007, though, the markets for some mortgage securities stopped functioning. Buyers and sellers simply couldn’t agree on price, and this impasse soon spread to other debt markets. Banks began to doubt one another’s solvency. Trust evaporated, and not until governments jumped in, late in 2008, to guarantee that major banks would not fail did the financial markets settle down and begin fitfully to function again."
"Companies achieve great economies, but they do so in part by driving wages down, and over time they will drive wages below the subsistence level unless the government intervenes to prevent them." Adam Smith
'What We’ve Learned from the Financial Crisis' by Justin Fox
http://hbr.org/2013/11/what-weve-learned-from-the-financial-crisis/ar/pr
"Five years ago the global financial system seemed on the verge of collapse. So did prevailing notions about how the economic and financial worlds are supposed to function.
The basic idea that had governed economic thinking for decades was that markets work. The right price will always find a buyer and a seller, and millions of buyers and sellers are far better than a few government officials at determining the right price. In the summer of 2007, though, the markets for some mortgage securities stopped functioning. Buyers and sellers simply couldn’t agree on price, and this impasse soon spread to other debt markets. Banks began to doubt one another’s solvency. Trust evaporated, and not until governments jumped in, late in 2008, to guarantee that major banks would not fail did the financial markets settle down and begin fitfully to function again."
"Companies achieve great economies, but they do so in part by driving wages down, and over time they will drive wages below the subsistence level unless the government intervenes to prevent them." Adam Smith
