Nobel Prize Winner's Warning

“Even if the recession is entirely blamed on capitalism, and it deserves a good share of the blame, the recession-induced losses pale in comparison with the great accomplishments of prior decades,” Nobel-Prize winner Gary Becker and Kevin Murphy write in today’s Financial Times. The duo argues, in fact, that these problems will largely fix themselves: “Given the losses, actors in these markets have a strong incentive to correct their mistakes the next time. In this respect, many government actions have been counterproductive, shielding actors from the consequences of their actions and preventing private sector adjustments.” Of course, one could argue that the government is, in fact, punishing actors for the consequences of their actions and forcing private sector adjustments.