Government intervention often (more often than not) has unintended consequences because policy-makers have trouble thinking and planning dynamically. They assume that conditions are fixed and will remain fixed after the implementation of some policy.
We live in a complex world. We also have an abundance of information that is easily manipulated by ever more powerful computers. Sometimes I think this gives decision-makers the illusion of predictive power - but it is nearly impossible to predict what will happen in such a complex system. I believe that small scale experiments and likely behavioral effects must be considered before large scale policies are implemented.
As Ed Glazer, a professor of economics at Harvard University, explains that the recent "Cash for Clunkers" program has all the earmarks of bad policy that will have effects the run counter to its stated objectives.
Subsidizing high-mileage cars to reduce carbon emissions is a bit like subsidizing low-calorie foods or low-tar cigarettes in order to reduce obesity or lung cancer. If the amount of cookie consumption was constant, then a lower-calorie cookie would lead to thinner waistlines. But if someone makes a less fattening, delicious cookie, I’ll want to eat plenty of them. Anyone who thinks that the proliferation of diet foods should have made Americans thinner was suffering from the “lump of food fallacy.
Less expensive and more enjoyable driving per mile leads to - surprise! - more driving.
Program has clunky reasoning - The Boston Globe.
BERK
Votes and polls...
Posted by: Daniel M. Ryan | August 10, 2009 at 01:17 AM
As we already know that this particular It is hard to image a group of such well educated individuals with out a lick of common sense. I guess one does not get what one paid for with an educaton at an elite college just a feeling of superiority. What a Shame!
Essie
Posted by: esther tolan | August 10, 2009 at 10:53 AM