In defense of markets.

The Economist has an article tucked away in their special report on the world economy which provides one of the best overviews of how the financial crisis has exposed the strengths and weaknesses of various banking models.   Despite the turmoil experienced by the global financial system, a market-based economy remains the ideal way to nurture economic growth.  The market-based banking model has advantages, as well, particularly when it comes to funding disruptive technologies and projects.  The authors appear to have coined a new term “mincemeat securities”, which we like since it captures many aspects of the crisis while evoking similar risks with industrialized food production, where a small problem with one batch of meat can affect the entire supply.