The financial system has been severely tested and the testing is not yet over. The fact is that the system survived and the recent changes in economic management improve the chances that it will continue to survive. The process of credit contraction has been accomplished without a bust so far and one can now see a way in which it could be completed without a bust, albeit at the cost of a prolonged period of substandard growth.
Substandard growth is less than desirable almost by definition, but it may meet the policy objectives of the present administration perfectly. It has been long recognized that conditions in which goods and services are freely available are more rewarding to the owners of capital than conditions in which resources are fully employed. Not only does a larger share of the national product accrue to the owners of capital but entrepreneurs enjoy much greater freedom of action. That is certainly the case today. The reins of government are in the hands of people who believe in free enterprise and encourage it to the greatest possible extent or even beyond.
Submitted July 16, 2017 at 05:49AM by Adaptable_ http://ift.tt/2tYivJK
