The premise is incorrect because real rate of return is what determines how you can “live”. Even if you received 10% returns every year, it makes a huge difference if the medicine/food/labor you need increased by 5%, or 10%, or even 20%.

Additionally, if you have lost the ability to earn an income, then you cannot afford to be down a few years, hence you need to greatly expand the proportion of assets that are earning less than equities, and quite possibly putting you behind inflation. Especially if you live in a popular area.

Combine this with a nation whose population is aging and therefore competition for buying young people’s labor is going up, and you might want to be more conservative about expectations of the future.

The US government came out and said that it would guarantee Freddie's/Fannie's debt which caused a sharp downtick as the government effectively admitted there was a possibility they could go to zero. Short (on the scale we're looking at) downturns, even if large in % terms, aren't a failure of a market. So, to answer your question, no.