What do these stories all have in common? They all demonstrate that government organizations do not systematically make better decisions in the same circumstance than do private organizations.

Leftists like to argue that, by some magical mechanism, real-world politicians make better decisions, especially better economic decisions, than do private actors in the free market. They usually make this argument after either the free market corrects itself naturally or the government interferes. They then simply assert, without any possibility of empirical verification, that the magic government unicorns could have prevented the problem if only they had been given enough power to do as they wished.

Such arguments are clearly ex post facto. Leftists cannot predict market correction any better than anyone else, so clearly they don’t have a predictive model of the relationship between any particular regulation and any particular market correction. More importantly, when they do have the power, they often do nothing to address the causes of the correction. Last year’s financial collapse demonstrates this clearly.

via Chicago Boyz » Blog Archive » The Illusion of Government Competence.