When the Invisible Hand slaps your face

NA:
"Why should Lehman bother you? I wish they would let the market WORK. Just quit fucking with it. Let it go as low as it wants to. "

me:
That's like saying we should let 747's fall out of the sky when the mechanics screw up. Because markets are made up of people, and people do dumb things: they are not rational actors, they are emotional actors. Apparently people need limitations placed on their behavior because they are unable to control themselves.

NA:
"You cannot legislate rationality. What will happen if Congress makes it illegal for makets to go down? "

me:
They already did by making shorting of stocks illegal.
The idea was that politics and economics could be separated. You are living in an historic moment, when this idea that started back in the 1600's has finally run its course. Politics and economics have always been two halves of the same coin (which is why it was called Political Economy in Mr. Smith's day). The Invisible Hand has always been attached to a political/social/philosophical/emotional/religious body. The Western practice of dissolving things into their constituent parts and treating them in isolation is highly useful but it has its limitations.