Markets as blessing (amv)

Many opinion-makers seem to agree that the financial crisis results from market failure(s) and that policies pursued during the "neo-liberal" era (1980-2005) proved to be flawed. Here some facts pointed to by Andrei Shleifer:

1. During 1980-2005 per capita income worldwide grew by 57%! That is a 2% average growth rate.
2. Infant mortality, a characteristic of poor countries, fell by 42% over the same period!
3. Wordwide share of people living with 1$/day or less fell from 35% in 1980 to 19% in 2005!
4. The median global inflation rate fell from 14,3% in 1980 to 4,1% in 2005!

So if you prefer wealth to poverty and life to death you should embrace the liberal agenda. Further, the magnitude of our current crisis is due to policy mistakes. If central banks would insure against base drifts in aggregate demand by some kind of NGDP-level-path targeting, instead of inflation targeting, most asset devaluations could have been avoided. There would be no need for bail-outs, for further regulations, etc. Systemic crises are by necessity demand driven, and demand is controlled by credible monetary policy ....