When the government delivers something, even in an atrocious and/or wasteful fashion, it gets credit for caring. Take Medicare -- the market could distribute all the health care dollars and services in a far more efficient manner, but then people would have no one to thank.

Markets just work, in a stunningly efficient and yet thankless way. Why?

The problem is one of agency. The agent of a government is a politician whom the people have placed in office for the management of government services. The beneficiaries of this agency are both the people (Food stamps! Auto bailouts!) and the politicians themselves (votes from food stamp recipients). Because the recipients of the goodies see a direct causal line from government to their mouths, they do not see the politician as acting in his own interest (basically bribing voters into keeping him in power). The voter thinks of his vote as a reward.

But who are the agents of the "market?" Businessmen. Their activity benefits the people, as well, of course. But the benefits to the people in the businessman's case are unintended -- his prime objective, about which he is nearly always straightforward, is to enrich himself.

So, "who you gonna trust?" A greedy, selfish businessman whose activities benefit you in a spectacular fashion by accident, or a paternalistic government that takes care of you dismally, though on purpose? Sadly for many, the questions of agency and purpose trump the only metric that really matters in economics -- results.

via Markets or government: Whom do you trust? | WashingtonExaminer.com.