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Monday, December 12, 2005

Insightful comments

I enjoyed reading these comments by Economist Russ Roberts which were interspersed on this blogjam: Economists in their Pajamas.
This gem speaks for itself:

Roberts: The biggest philosophical problem we have today with government is government's desire to micromanage this industry or that one with this tweak or that yank while ignoring the intended or unintended consequences that inevitably follow. Hayek said it best: "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." Failing to understand this insight is the problem with the nation's energy policy, telecom policy and health policy just to take a few examples. Fiddling with energy policy is unlikely to make consumers better off. My hope is that the price of gasoline will come down a little bit more and politicians won't feel like they have to show they care about us.

Kudlow: Russ: was that part of Hayek's "fatal conceit"?

Roberts: Yes, Larry, that is what Hayek called the fatal conceit from the book of the same title. The Road to Serfdom is his most famous book. But the deepest insights are in The Fatal Conceit. Unfortunately, it is not light reading. But hey, at least it's short.

This one has some valuable insight into policy and decision making.

Roberts: … There is a virtue in not looking to far ahead and that's that a lot of bad solutions are never implemented. Samuel Johnson said "When a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully." There is something to be said for solving problems with a focused mind. When Social Security and Medicare head south, we'll focus on them. And if we don't mess up too badly, we'll have a lot of wealth to use in solving the problem.

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