Mike Rizzo raises a point that is a common theme here at Coyote Blog. People often propose a statist solution because they distrust some private actor (e.g. large corporations) and want someone with power over the top of them. However, to create such a regulatory structure, one has to give even more power to the state's regulator than the corporation has. At least one has the choice of whether or not to deal with a private entity (unless of course it is a government-enforced monopoly, but that just takes us back to statism). We give private actors power only to the extent that we choose to transact with them. When we give government power, there is no longer this sort of opt-out. Rizzo observes:
Just ask the person a question. “I can respect why you think this. But can you do me a favor? Can you imagine getting your ideal world in place, and then rather than “your guys” being in charge, how would you feel if the person/people running it were people you completely mistrusted, despised and disagreed with? Would you feel good about your system? Why or why not?”I tell folks all the time - I don't trust private actors any more than the people in government. What I trust more are their incentives and the tools I have for enforcing accountability on them."
Of, course the counterview is that we can always hire smarter regulators!
Hey, there's even a bipartisan belief in this. I recently ran across a report that a couple of conservative economists advised the Romney campaign to come out in favor of breaking up the largest banks (a good piece of advice by the way - Dodd-Frank actually enshrined too big to fail) and the response was they just needed better oversight by the regulators. Sigh.