You know of those religious people who say "God will provide", the Libby equivalent to that is "the market will take care of it". While Libbies do not apply it to everything they do apply it to the economy, job markets, etc.
The market does not take care of things, it doesn't even take care of it self much of the time. What is dose and doesn't do depends on the many variables (supply, demand, how much money people have, how much people are wiling to spend, how many people there are, what people are buying. when and where they are buying "it", and many, many more). These variables determine what the market does and what it does may or may not be good for the economy, the people, business, the country, etc. The market is is a human creation and humans actions are what determines the major variables.
Markets are the product of human interactions and humans can be quite stupid. Economic bubbles are prime examples of this. A market grows and as it grows more people get into the market to take advantage of the growing market and make money (which in it self is not unreasonable and can be a good idea) but due to circumstances the market grows beyond a sustainable level. Do the people investing in the market see the unsustainable growth and get out? No. Even when it become clear that a bubble has formed they will deny it and remain in the market and continue investing. The bubble bursts, the market plummets and allot of the money that has been invested in the market evaporates. This effects not only that particular market but the economy as a whole and while few may actually invest in the market the money lost effects everyone.
The libby may reply: "the bursting of the bubble is the market correcting it self". If the market was self sustaining there would be no bubbles. A bubble (as well as other economic problems) can cause major damage to an economy and one big enough can cause an economic collapse. The problem with economic bubbles are: a market grows to an unsustainable level. The problom isn't bubbles, its markets and even economies as a whole growing to unsustainably high levels (an unsustainably high market is not always a bubble).
In a stable economic system the ups and downs would be minimized and it would never rise above an unsustainable an level. The cause of economic ups an downs would only be non-economic conditions that effect markets and/or economies as a whole (natural disasters, increases/decreases in populations, passing/repeal of laws, etc) (note: I don't mean what the bumps and dips of the market should be small (ideally yes they should), noneconomic conditions can have large effects on economic systems).
Now the market is not completely impotent; it can take care of somethings but not everything. Though I am pro-regulation I do recognize that bad regulations, over regulation and unnecessary regulation are harmful but what the libbies need to recognize is that a market left to itself isn't as stable as a regulated market.
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