Why does any of that imply that the "self-cleansing market" thesis is wrong? Last time I checked, the first recession in the USA did not last forever - thus the market does "self-cleanse". In fact, the only time we've seen stagnation of 5 years + is where the dead hand of government becomes too powerful e.g. 1930s, 1970s, Japan in the 1990s and so on. Are you trying to say that bubbles don't eventually burst of their own accord, or that busts don't eventually end and then see recovery, without any government intervention, just by the price mechanism and supply & demand doing their job?