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To go further. We had easy access to capital and it was good times. A lot of stuff got built around here. We got big box stores, cool big-ass convenience stores, a bunch of new neighborhoods and the tax money built a nice new extension on the schools.
Now we have difficult access to capital and it's bad times. Does that mean the good times were fake? Well for one thing, all that stuff didn't go away. The box stores will get new names on them and the houses will be foreclosed on, but it just means other businesses will move in and other people will move to the houses.
The hard access to capital is because of a market failure leading to a crisis. Here's where the philosophers come in. It seems that crisis is inevitable. We had a market failure in 1929. We built protections. Now we have one in 2009 and we wonder if the protections failed.
Maybe it's more like a river; some rivers flood every 10 years, some every 50 years and some every 100 years, but the flood is inevitable.
So markets make us rich, but every 4 generations there's a major upset and a bunch of people suffer. Should we A) stick to the markets because the good times are very good, and not lost simply because bad times come? B) Stifle the markets so that there is less chance of upset, but not so many good times either?
Should we not build on the flood plain, where all the grains grow? Should we move to the mountains where there are no floods but very little grows?
I would say that the non-upset market is the norm, so productive that it pays off enough to make it worth it when the bad times show up.
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