Yes, China's stock market woes are an embarrassment. But not in the way free marketers think.

The real problem is that China was subsidizing a massive gambling ring for the wealthy, instead of building its economy from the bottom-up

A man looks at the Chinese stock exchange
(Image credit: AP Photo/Shizuo Kambayashi)

Now that the precipitous slide of China's stock market seems to have abated, we can step back for a moment and ask what, if anything, is to be learned.

One takeaway that's coalescing in the media is that China's ruling elite embarrassed itself. The government is on record pledging to allow markets to play a "decisive" role in directing resources, and the smorgasbord of emergency measures the government pulled out to stop the slide made "a mockery" of that promise, Scott Kennedy of the Center for Strategic and International Studies told The Washington Post. "They were spending their hard-won credibility in an effort doomed to fail," added Daniel Rosen, a partner at the advisory firm Rhodium Group.

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Jeff Spross

Jeff Spross was the economics and business correspondent at TheWeek.com. He was previously a reporter at ThinkProgress.