I have two interrelated quibbles with Harford’s talk. One is that, despite Harford citing several instances in which regulators made dangerous situations worse, not better, his axiomatic position is that it is regulators that will prevent crises in the future. I think this is a deeply flawed position, since regulation and regulators have an incredibly poor track record with regards to various kinds of crises. (Not only did they not prevent the global financial meltdown, they also provided many of the conditions that fostered it. They were also definitely responsible for the real estate crisis in the US that lit the fuse on the whole unhappy incident. Which is to say nothing of the fact that there’s good evidence that they’re actually slowing the recovery and prolonging the economic pain.)
BTW, I love the name of his blog, "Magic Blue Smoke," even if I'm not yet sure what it means.
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Magic Blue Smoke is what makes integrated Circuits work. You know they are done for when it escapes.
ReplyDeleteAlso recall that "regulate" means to make regular. It the language of the founding fathers it meant to promote and grow and to make more commonplace.
Thank you very much B-Daddy for the Quote of the Day. I'm honored!
ReplyDeleteAnd thanks Doo Doo Econ for the explanation. Magic Blue Smoke is, indeed, the stuff that makes circuitry work. As evidenced by the fact that when smoke starts escaping from the circuits, they always stop working.
Great blog, B-Daddy. Please keep up the great work.
-AMB