Free-market economists' incoherent argument gets the story of COVID completely backward

[MissMillie]

**snip**

Mulligan and Philipson then argue that it was private enterprise that “quickly controlled” the pandemic (all thanks to Trump, of course), even though the virus is still running rampant. “Getting the government out of the way was essential,” they write. That was “the goal of President Trump’s Operation Warp Speed.”

Operation Warp Speed was indeed a success, but it was also a classic government intervention in the free market. Costing more than $10 billion, it was designed to correct a market failure—exactly the opposite of what Mulligan and Philipson claim. The market failure was the lack of incentives for private companies to invent and distribute a vaccine, presumably because the costs and risks could not justify the return if they succeeded. The government stepped in by throwing money at the companies, guaranteeing a market, and supplying technical advice and coordination.

**snip**

https://www.msn.com/en-us/money/savingandinvesting/free-market-economists-incoherent-argument-gets-the-story-of-covid-completely-backward/ar-AANHBwd?ocid=U483DHP&li=BBnb7Kz

[The Magistrate]

1. The 'Free-Marketeers', Ma'am, Never Are And Never Will Be Right

Humans and human systems never approach their stripped down models of behavior.

[Hugh_Lebowski]

2. The formatting on this article is terrible, and that center paragraph in your OP is meant to be

the blurb accompanying an illustration/graphic panel. That's why it's a total non-sequitur.

I would ditch that piece, and include 2 more of the many very salient paragraphs in the article ... if it were my OP. You're allowed up to 4.

I think these are excellent choices

A market failure occurs whenever a private agent’s actions cause social costs that exceed private costs. Such instances are ubiquitous. When people are rational and amoral (as economists normally assume), they have every incentive to dump waste in rivers, drive faster than is safe for pedestrians, cyclists, and other drivers, and spread contagious diseases to others if they feel well enough to go out.

The only thing that prevents market failures is the law, which is created and enforced by government. The idea that “government failures” are more common than or worse than market failures is incoherent. Without a government, there would be nothing but market failures.

OR

In a remarkable statement, Mulligan and Philipson write that, “Politicians craft tax policy to favor certain interest groups, but the private sector corrects such failures by substituting to less-taxed activities.” This, apparently, is another way that “markets” save us from “government failure.”

But, in fact, when economists use the word “tax,” they are referring not just to levies on income, but, more broadly, to sanctions imposed on polluters, fraudsters, criminals, reckless drivers, financial institutions that risk their customers’ money, and anyone else who causes harm to others. When private actors respond by substituting to less-taxed but functionally similar activities, that is called “regulatory arbitrage,” and it is an enormous problem whenever the taxed activity, like pollution, causes harm (as is usually the case).

I figure I'm also allowed to post 4 paragraphs

[MissMillie]

4. My bad. I'll fix it. (n/t)

.

[Hugh_Lebowski]

5. I didn't mean your OP, I meant the actual article at MSN, to be clear :) nt

[MissMillie]

6. I get that... we're cool (n/t)

.

[rickyhall]

3. The Fed did its job again. Who'da thunk it?