Matthew Yglesias wades into a debate I've been having with a large portion of the libertarian community:
Recently right-of-center commentators were complaining that Jon Chait underestimates the quantity of regulatory capture in the United States. The way I would have phrased the smart liberal point to make on this is that regulatory capture is a real problem, and the liberal view of the problem is that we need to work, constantly and consistently, to try to reduce its incidence. The conservative approach is some combination of handwaving and deliberate efforts to make things worse.
I don't really disagree with him. Libertarians keep saying I "denied" that this phenomenon exists, but I didn't. What I disputed was this sweeping claim by Will Wilkinson:
In my opinion, the seeming inevitability of Orszag-like migrations points to a potentially fatal tension within the progressive strand of liberal thought. Progressives laudably seek to oppose injustice by deploying government power as a countervailing force against the imagined opressive and exploitative tendencies of market institutions. Yet it seems that time and again market institutions find ways to use the government's regulatory and insurer-of-last-resort functions as countervailing forces against their competitors and, in the end, against the very public these functions were meant to protect.
We are constantly exploited by the tools meant to foil our exploitation.
Basically he was arguing that deploying government as a countervailing force against the excesses of the market -- we've been tossing around the phrase "regulatory capture" but Wilkinson is referring to something broader than just regulation -- almost inevitably fails. And then he and a gaggle of fellow libertarians expressed surprise that I would disagree. Of course I disagree! The question of whether government intervention usually backfires or only sometimes backfires is an essential nub of the disagreement between economic liberals and conservatives. If I agreed with him, I wouldn't be a liberal.