Mark Thornton dissects “contagion” hype and argues it’s not a market pathology. He shows why, in a free market, failures reallocate customers, labor, and capital to better firms rather than spread panic. Contagion appears only when government links balance sheets and distorts prices. Mark traces how credit booms set up bust,s and why even the Fed now sits upside-down, while homeowners are “rate-locked” and supply is frozen. The takeaway: politicians and central bankers invoke contagion to demand more power and money—yet their interventions cause the very fragility they decry.

See also “Fight Inflation Now” (Minor Issues, episode 72): Mises.org/MI_72

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