[A4ET8a8uTh0]

<< But shortly after, when all inefficient companies bankrupt,

Eh. It sounds great in theory, but in practice ( including in US, where all the more recent crises shown ) inefficient companies get saved if they are sufficiently connected or 'important' enough to the system writ large.

I am not defending the practice, but I want to point to obvious flaw in the analysis since it diverges from reality somewhat ( I just noticed the inclusion of government involvement ).

[CSMastermind]

The government bails out comparatively few businesses.

While many, myself included, dislike the practice, I don't think it happens on a large enough scale to make a significant impact on the economy at large.

[endtime]

I don't really feel like I know much about this, so someone may point out an obvious way in which I'm wrong, but:

How do you measure the effects of the moral hazard created by the post-housing crisis bailouts circa 2008? Are major financial institutions incentivized to take outsized risks if they're too big to fail? How can we be sure that doesn't "make a significant impact on the economy at large"?

[mistrial9]

the War economies are related to this phenomenon of massive, inefficient companies getting new contracts and new cash; similar to Old World central contract awards connected to long-term govt cash flows, I believe..