Words to remember (goes for the author, too)

Martin Feldstein, The Risk of Economic Crisis, University of Chicago Press, 1991, p. 17:

In the decade of the 1980s the United States faced four major shocks to its financial sector and to the economy more generally. Each of these threatened to precipitate a financial crisis and a major economic downturn. Fortunately, none of these dangers materialized.

But looking back at these problems, the overall impression is that we face greater risks now than we appeared to a decade ago. My analysis of these problems also suggests that the major source of the increased risk in our economy has been a series of seemingly well-intentioned government policies. . . .

This is certainly not to say that all government actions in the 1980s have increased the risk of economic crisis. . . . But in virtually every case the government appears to be correcting problems of its own making and possibly sowing the seeds of future problems.

Comments

[JorgXMcKie]

Oh, gosh. Who would have thought that "well-intentioned government policies" can have unintended consequences, and that these consequences might not be good ones?

I seem to remember some aphorism or other about what the road to Hell was paved with.

Or, as Emerson said, "If you see a man coming towards you with the obvious intention of doing you good, you should turn and run like hell."

[jorod]

I believe Alexander Solzhenitsyn wrote a book about it. Cancer Ward.

[toad]

i remember when taking flying lessons, that in a light aircraft when things are getting all cattywampus the best thing you can do is to just let go of the controls. You'd do that and the wings would level out and the nose would go back to at least close to level and then you could gradually input/adjust on the throttle or the trim one at a time to get a dead level. What the government does is start inputing everything at once A cancels B, C makes D worse. Rocket and Missile control designers talk about negative and positive feed back loops. It is the postive feed back that gets you in trouble. The rocket starts moving left then right in bigger and bigger increments until it hits the ground.