Discussions about whether government should interfere with the workings of an otherwise free market tend to take on a dogmatic flavor; frequently, assertion meets counter-assertion with nary an empirical fact in sight. In part, this is because such discussions are forward-looking, and the future is by definition data-free at any present moment. To make matters worse, historical experience is often of limited usefulness in macroeconomic matters, either because there are simply too many economic variables to account for (and no way to control for irrelevant factors), or because some party to the discussion claims that “this time is different.”
Nonetheless, there are times when the balance of empirical evidence is so overwhelming that some conclusions are inescapable. For example, anyone who claims that government can fix the prices of goods and services without courting calamity is rightly dismissed as ill-informed (unless he’s talking about the price of money, in which case he’s appointed to the Fed).
As a further contribution to the list of Topics on Which We Have Very One-Sided Evidence, I offer this link to an interesting study by Clifford Winston Read the rest of this entry »