Bubbles are part of the system, not a sign that the system is dead

From Emerging Markets Storm On The Horizon? by Walter Russell Mead.

A lot of people, including some senior policymakers in places like Beijing, misread the financial crisis of 2008-9 as somehow signaling the failure of liberal capitalism and the end of American economic dynamism. What they missed was that the modern liberal system is more than 300 years old (the Dutch started it back in the 1600s before the British took it over and then handed it off to the Americans) and those 300 years have seen one economic crisis and financial panic after another from the bubble in Dutch tulips to the bubble in American houses. Bubbles are part of the system, not a sign that the system is dead.