Recession, high property prices not signs of market failure
A pause in growth is the market's self-correcting mechanism that points economic efforts into new directions when binge investing has failed
In fact, the government has been playing a pivotal role in the market economy, especially in times of market failure, when it takes steps to restore the market balance to ensure that the community can share the fruits of economic growth … As I see it, government participation and market operation are complementary concepts. What matters is how to make the two work together and how to strike a balance between social costs and benefits.
Live and learn. When I was in school, I learned in physics that there can only be one pivot in any pivotal operation, and I learned in economics that the pivot of market operations is price.
But new advances in knowledge are made every day these days, and our financial secretary has just pioneered two new fields of scientific discovery - multi-pivot physics and non-price-pivot economics. Clear the way to Stockholm, folks. We have a double winner coming in this year's Nobel prizes.
As part of the peer review process before he gets there, however, let's examine some of the premises set out in this budget theme statement by a man whose education in public policy consisted of licking stamps for Kennedy family campaigns in the United States many years ago.
Just how does one define market failure? It won't do to say that an economic recession represents a breakdown in the workings of the market. Recession is a natural phenomenon that serves the vital role of pointing economic effort into new directions after binge investing has failed.