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View Diary: The Most Important Economic Theorem You've Never Heard Of (174 comments)

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  •  "markets perform best" is the freedom to (4+ / 0-)
    Recommended by:
    KJG52, fumie, gerald 1969, Calamity Jean

    place value on a goods and service.
    --Emmanuel Kant.

    In other words, how much we are willing to pay for a good or service depends on how much we value it.

    Our current deregulated market system is dysfunctional because of our inability to place value on a good or service.  The value is either masked (mortgages bundled and sold on an open international market) or downright manipulation (average leveraging at 30 to 1). The collapse or bailout of some of our financial institutions – AIG (AIG), Lehman Brothers, Fannie Mae (FNM), and Merrill Lynch (MER) - was primarily due to leverage.

    Or looking at it still another way....a well regulated system is like the picture frame around the picture.  You can paint whatever you want within the frame.  Without the frame there is no tangible product parameters to place value on.

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