Mother Goose

"Son, your ego's writing checks your body can't cash."
--Commander Tom 'Stinger' Jordan (Top Gun)

Over the past few months we've heard a litany of complaints about economic decisions made by government officials and regulators. Here are a few I ran across just yesterday.

"OFHEO regulators were lax in their oversight of Fannie Mae (FNM) and Freddie Mac (FRE)."

"Paulson mistakenly let Lehman fail."

"Central banks around the world are not moving quickly enough to unfreeze global credit markets."

"Greenspan kept interest rates too low for too long and precipitated the housing market bubble."
"Bernanke hasn't lowered rates enough and is exacerbating the housing market decline."

Such complaints are as old as our choice to let bureaucrats govern economic decisions rather than letting market participants police themselves. Lacking the incentive and information of the market context, bureaucrats will consistently make erroneous economic decisions. Moreover, central planners will be slow to recognize their errors and to revise their decisions.

In the wake of bureaucratic errors strewn over decades, one would think we'd realize the folly of this approach and hand control back to market mechanisms. Instead, we seek more state control--or control from a different set of bureaucrats (e.g., "Our central planners are better than theirs.")

This is the mother of all wild goose chases.

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