None of this makes sense unless capitalism's intention is to preserve the status quo at the people's expense.
Of course, we're told that a stable financial system is essential to economic prosperity. We're told that credit must be easily acquired again, so that businesses can meet payroll and consumers can resume buying. But these claims are also irrational. Businesses properly should be capitalized by investment and products should be purchased with earnings. So why do governments claim businesses and consumption need to be financed by debt? The answer is really very simple. The wealthy increase their wealth by lending and they do it without even having to use their own money by means of the Ponzi scheme known as fractional reserve banking. And when debtors cannot meet their obligations, their assets are acquired by the wealthy at fire sale prices who then become even wealthier. This is what capitalism does; it does it consistently and spectacularly. It really can have no other purpose. Credit is good only for creditors; debtors always lose.
What is there about this that economists cannot understand? Are they absolutely irrational or complicit? Each must answer for him/herself. But the economic system they advocate is nothing but an irrational tower of Babel that is based on principles derived from simplistic, imaginary situations and assumptions about rationality that are contradicted by hundreds of years of evidence, and is devoted to the worship of Mammon which benefits only the rich. Capitalism has been very successful; it has impeded the improvement of the human condition for two hundred years, and unless it is scrapped, it will continue to do so. No mere change in government can stop it.
John Kozy is a retired professor of philosophy and logic who blogs on social, political, and economic issues. After serving in the U.S. Army during the Korean War, he spent 20 years as a university professor and another 20 years working as a writer. He has published a textbook in formal logic commercially, in academic journals and a small number of commercial magazines, and has written a number of guest editorials for newspapers. His on-line pieces can be found here and he can be emailed from that site's homepage.
Comment: We might also ask if the Iraq War and Occupation was 'rational'? It is either a guargantuan mistake or a spectacular success depending upon the deliberative process, or reasoning, behind a person's perspective.
For those who reasoned (or rather, accepted the lies, suggestions and paralogical reasoning fed to them by the corporate media) that Saddam Hussein must be removed to make the world a safer place, neuter the threat of non-existent WMDs and seed liberty, freedom and liberal democracy in the Middle East (thereby removing some of the tremendous burden from Israel's shoulders of carrying the torch of Democracy for the region) alas! the humanitarian intervention in Iraq has proved a catastrophic failure - the Vietnam of our times.
However, for those who reasoned (correctly, given how events have transpired) that the removal of Saddam Hussein and the instigation of interneccine warfare between Iraqis would present vast opportunities to profit from no-bid military-industrial complex contracts, deliver another strategically located launchpad in which to base half a million pathologically infected US troops of the Imperial Guard, dramatically advance the geo-strategic aim of unhinging a fifth of the planet through shock and awe (Brzezinski's "Arc of Crisis"), enable the participating beneficiaries (the pathocracies of the US, UK, Israel, Canada, Australia in particular) to tap a bottomless well of fear from which to maintain social cohesiveness by repealing civil liberties and spying on its citizens, in the process culling the herds of both invaded and invading countries... the devastation wrought on Iraq has proved resoundingly successful.