Proponents of the “invisible hand” theory coined by Adam Smith will respond with a screaming “Yes” to the notion that the market issues will eventually resolve themselves. I was reading Al-Qabas daily today when I stumbled upon another proponent of the invisible hand theory; It isn’t Milton Friedman, but our Deputy Prime Minister for Financial Affairs. He too proposes that the Kuwait Stock Exchange cleanse itself. I personally oppose such a stance not only because my nickname is Keynesian and I advocate a more prominent government role especially in a market failure situation, but also because I believe our stock market doesn’t have the necessary structural elements to cleanse itself. For example, there are no bankruptcy laws and we don’t have a Capital Market Authority yet.
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