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Great diary, afew.

What the free marketeers constantly decide wrongly on is an index on the number of regulations to decide whether a country has "good" or "bad" economic policies.  Regulations aren't inherently good or bad, in my opinion.  They are what they are, and there are good ones and bad ones.  Regulating natural monopolies, like, for example, utility companies, on prices and quality is a necessity, because, otherwise, they'll game the market and rape consumers.

However, regulating how many cars Toyota can ship to the American market is, in my opinion, incredibly stupid, because it artificially increases the price of a Camry and allows shitty companies like GM -- which can't innovate and is going to royally screw its employees -- to remain alive while punishing Toyota for being a better company with better products.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Tue Mar 7th, 2006 at 11:19:04 AM EST
The key here is that "pure quantitative" analysis just can't do the job. You need to sit down and make judgements about bad vs. good regulations.

I often feel that the neo-lib hallucinations in economics are rooted in an attempt to make conclusions from numbers alone.

by Metatone (metatone [a|t] gmail (dot) com) on Tue Mar 7th, 2006 at 11:34:14 AM EST
[ Parent ]
What's wrong with numbers alone?
by Jérôme Guillet on Tue Mar 7th, 2006 at 11:59:37 AM EST
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They don't mean anything.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue Mar 7th, 2006 at 12:00:19 PM EST
[ Parent ]
Well, perhaps it's OK in the case of a 5...

(Now who can be the mystery user who was Number 5 signing on to ET? Numéro, hey? French?)

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Mar 7th, 2006 at 12:07:01 PM EST
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One wonders...

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Tue Mar 7th, 2006 at 12:13:50 PM EST
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A witty comment, anyway. Let's hope Numéro 5 chimes in with more...
by afew (afew(a in a circle)eurotrib_dot_com) on Tue Mar 7th, 2006 at 12:27:14 PM EST
[ Parent ]


A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue Mar 7th, 2006 at 12:31:14 PM EST
[ Parent ]
By the way, Miguel, I'm working on a diary in response to the ProsperityUK website.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Tue Mar 7th, 2006 at 12:42:03 PM EST
[ Parent ]
It's really rooted in ideology -- more specifically, the desire to make the numbers fit the ideology, rather than the other way around, as it should be.  But I do agree with you that economics can't rely only on numbers, because the economy is too large and complex (and constantly changing) to rely only on numbers.  You can draw all sorts of conclusions from using just numbers.  What separates the great economists from the Neoliberal Hallucinationists is the ability to look at the numbers, combine the analysis with solid intuition, and provide some general predictions on outcomes.  (The best ones, with the possible exception of Keynes, think of great analogies to explain their ideas.  Paul Krugman is incredibly talented at this.)

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Tue Mar 7th, 2006 at 12:40:36 PM EST
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Thank you.

I fully agree on these indices, which OECD go in for a great deal. They're mostly aimed at handing out lessons in an oversimplified way. It's just funny when one of them turns against its master, that's all.

As for quotas, your Toyota/GM example is, not exactly extreme, but a fairly obvious one. Ideally, quotas should give the home industry breathing-space to adapt and become competitive with the imports. I think that has happened to some extent in Europe (though there's a way to go yet for Renault and Peugeot, for example, compared to Toyota and Honda). I don't support the British (Thatcherian) choice of abandoning the national industry to its sort (with the result that there's nothing left of it). And I'm not sure the sogginess and lack of fight of GM and Ford can entirely be ascribed to shielding by import quotas.

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Mar 7th, 2006 at 12:45:41 PM EST
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