For years before regulatory controls, free financial markets regulated themselves. Severe bubbles were rare, though economic cycles were common, as they still are.
But recessions were self-correcting, because they were market-oriented. Every economic downturn was brief, self-repaired by inherent market instincts.
There were no strict regulatory powers around, with no artificial tinkering and meddling by use of economic theories or any correcting stimulus.
Yet, the steeper the downturn, the faster and sharper the recovery in every instance.
The problem with a stimulus is that most are political and have no real economic function. Moreover, they are usually the wrong kind. That is, they are made to act too far into the future. They begin to work after the actual economic recovery. Natural market repairs are much faster than a political stimulus, which, as we know it, is merely a misnamed bait and switch device.
It should instead be called what it actually often is, a political slush fund.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)
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