I think that razor blade example is very important and could be investigated more. It might happen that proof exists in the case. The rest of it is highly influenced by the above-mentioned paradigm; i.e. if you have a proof then you know the future, and if you don't have a proof then you got to wait for the results, i.e. empiric way, to make a judgement.

>I cannot prove that government averted a financial Armageddon by rescuing the failing market. Nor can I prove that it will harm me if I swallow a razor blade. IMO it would be incompetent to try to prove such things and astonishing for anybody else to insist that decisions cannot be valid in the absence of such proof.
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>If it is agreed that neither of us can prove anything, surely the correct approach is to review the empirical evidence and draw conclusions from there? The challenge for you will be to assert credibly in this particular case that the efficient market had it all under control until dopey government interfered.
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>For the rest of it: IMHO it is perfectly rational to believe in general that government has no natural place in business but that nationalizing AIG and propping up banks was the correct course in this particular case. Also It seems logical that government will have to impose further regulations not because it wants to interfere but because the evidence clearly shows that when the market screws up, its participants will run for cover leaving chaos for the general citizenry unless government stumps up with hundreds of $billions. It seems entirely competent and proper to impose restrictions to prevent the market doing this again.
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>It is also reasonable to hope that government will realize its stake in these businesses at the first opportunity. Personally I would favor a Thatcherian share distribution that would increase personal wealth or get converted into consumption, but it would be OK to sell the equity back to the same sort of people who screwed up this time as long as rules are in place to prevent them being stupid again.
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>The other stuff about obstructionism and divinity etc has no obvious relation to the above and is nothing to do with me.