Yes, we know the argument, if only those wise people who had learned how to steal the most votes were put in charge of running everything then we'd all be gambolling in flowered meadows and life for all would be immeasurably better. This argument works right up until we look at what actually happens when the politicians manage to run something. Like, say, the monopoly off track bookie in New York State.
OTB is operating with a negative cash flow of $600,000 to $800,000 a month on a betting handle of $900 million a year, largely because of a revenue-sharing formula dictated by Albany that forces it to pay out more than it takes in after operating expenses...
Yes, the wise and omniscient beings face incentives, just like everyone else, and as everyone likes something for nothing they've set up a bookies so that it must (note, MUST) pay out more than it gets in plus the costs of doing so.
Of course, a bookies isn't that much of a problem but what happens when similar pressures are brought to bear on a more important segment of the economy?
What great advice! Make more loans, but make better loans. What a great banker he would make! I mean, the guy is just amazing, he knows everything about everything. I’m sure all the bankers in the room slapped their heads in a collective I-coulda-had-a-V8 moment and said as one: “Why didn’t I think of that!?!" And of course Putin knows just what the interest rate should be. 14 percent is Just Right. Pretty amazing to watch a bald guy do a Goldilocks impersonation.
It's not going to work out well, is it?
Aren't you glad that there is at least a modicum of sense in our own government regarding the banks? They're desperate to sell them off, get them out of governmental ownership, before the sillier parts of the Labour Party have a chance to offer such sterling advice.