http://www.atimes.com/atimes/Global_Economy/JL09Dj02.html
Benedict XVI is magnificently right
By Spengler
...If moral rot has taken hold of a society, the market mechanism will take it to hell faster and more efficiently than any of the alternatives.
There is an even greater flaw in the theory of the free market, perhaps, and that is in the assertion that the market can form adequate expectations about the future profitability of firms and make proper judgments about allocation of capital. How do we explain away the misallocation of capital to Internet stocks during the late 1990s and to homes in the United States (and elsewhere) during the ensuing years?
The world simply is too uncertain for the market to look more than a year or two over the horizon. Technological and social change occurs in unexpected and dramatic ways, frustrating the best guesses of the cleverest entrepreneurs, not to mention the stodgy decisions of central planners. The market cannot form accurate long-term expectations; at best it can imagine future outcomes. The quality of its imagination in this case depends on cultural factors that transcend economic judgment...
The Pope's essay is at:
http://www.acton.org/publications/occasionalpapers/publicat_occasionalpapers_ratzinger.php?view=print
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