Michael Boskin: The Anatomy of Government Failure - WSJ.com - 0 views
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Gary Edwards on 26 Oct 12Good summary of a very important issue in this election - the role of the government in a "capitalist" free market economy (cough cough). If you have trouble loading this locked WSJ article, the solution is simple. Paste "Michael Boskin: The Anatomy of Government Failure" into a google search. The article with link will show up as "online.wsj.com/...../ Just click the headline and read. The google paste gives you a free pass to WSJ articles. ........ Great cartoon image with this post :) http://goo.gl/7QQZh excerpts: In a market economy, price signals automatically steer society's scarce resources to the uses people value most, and at minimum cost. This is Adam Smith's famous Invisible Hand. But sometimes markets aren't competitive, or they generate effects such as congestion or pollution that are not accounted for in the price system. These "market failures" potentially justify government intervention......... "More generally, the costs of government regulation may be higher than the benefits-the cure may be worse than the disease. Before undertaking a new government intervention or adopting a new rule, instituting a new program or expanding an old one, the problem of "government failure" has to be considered. Government failures include the cronyism and pork that arise from spending and subsidy programs. Helping people experiencing hard times to get back on their feet is proper, but if overdone it may induce dependency. Laws are administered by agencies, from the EPA to banking regulators, with their own bureaucratic incentives-and they are prone to capture by the very interests they are supposed to regulate. Government failures are as pervasive as market failures due to monopoly or externalities, such as pollution, that arise because of ill-defined property rights. The potential for such failures grows as government grows. More government spending or regulation doesn't necessarily lead to better outcomes. If that were true, Washingto