An interesting quotation:

“Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works.” — John Mills (1821-1896)

Prof. Gordon Haave applies the lesson:

This is a critical point for those in charge of public policy. Everyone is worried that house price declines, etc. are going to harm the economy. The economy has already been harmed. Billions were spent building houses that were not needed. The damage is done. The debate now is ultimately whether or not those who did the damage will bear the costs, or if the costs will be pushed onto the taxpayers.

Ola Dunk replies:

Disagree, although I still like the quote.

I mean, panics can reveal a lot and in a Darwinian way remove those that are unfit, but unfortunately panics often also destroy those that under normal or even slightly adverse situations would make it.


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