Is of course, the government, right? Here is Michael Crichton analyzing the “end of the world market failure du jour 1999” Y2K problem:
So governments can congratulate themselves! The only problem is, they have no reason to congratulate themselves, because governments didn’t solve this problem. The US government spent 6 billion dollars. But Citibank alone spent nearly 1 billion. And total US expenditures were on the order of 100 billion, which means the government spent 6% of the total needed to fix the problem.
Would Citibank have spent the money to fix its Y2K problem without government urging? Of course, because not to do so would have put them out of business. The same is true of other banks and businesses around the world. Yet government takes the credit.
The asymmetry between taking credit on the upside (when market failures get fixed) and bearing no responsibility on the downside (when markets “fail”) seems to be a common them in our government. Where have I heard about such things recently?
