Winston on market and government failure

by Russ Roberts on December 28, 2009

in Podcast

The latest EconTalk is Cliff Winston of the Brookings Instiution talking about market failure and government failure. He discusses the empirical evidence on government’s interventions in antitrust, safety regulation, and environmental regulation.

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  • Great podcast. I'm going to take a look at Winston's book. Here's an idea for future work for Winston: Answer the question why so many people believe something that isn't true.

    I think people use two different measures when considering the effectiveness of government and private activities. With private activities they use the standard of systematic perfection, or anecdotal imperfection. If it isn't perfect, or as perfect as they think it should be (whether they're right or wrong), then we need to give government a shot. In other words, if it costs just one life, then we need government to step in.

    With government action, they use a different standard, anecdotal success: If it saves just one life, then it's good. Even it if indirectly takes more lives net-net than without government involvement.

    Anecdotes are easy to understand and just as dangerous as statistics.
  • Government failure:
    Senate Homeland Security Committee Chairman Joseph I. Lieberman (I-Conn.) joined GOP critics in asking how the suspect was able to retain a U.S. visa — issued by the U.S. Embassy in London in 2008 — after his name appeared in the terrorist database.

    “What happened after this man’s father called our embassy in Nigeria?” Lieberman asked. “What happened to that information? Was there follow-up to try to determine where this suspect was?”
    http://www.washingtonpost.com/wp-dyn/content/ar...

    Private Solution:
    Jasper Schuringa, an Amsterdam resident, lunged toward the fire in Row 19, jumping from one side of the plane to the other and over several other passengers. He burned his fingers as he grabbed a piece of melting plastic held by Umar Farouk Abdulmutallab, the Nigerian man accused Saturday of trying to bring down the passenger jet with a homemade explosive device.

    Schuringa, a video producer, restrained Abdulmutallab as others used blankets and fire extinguishers to douse the flames.

    "When I saw the suspect, that he was getting on fire, I freaked, of course, and without any hesitation I just jumped over all the seats," Schuringa told CNN on Saturday. "And I jumped to the suspect. I was thinking like, he's trying to blow up the plane."
    http://www.washingtonpost.com/wp-dyn/content/ar...

    "I am grateful to the passengers and crew aboard Northwest Flight 253 who reacted quickly and heroically to an incident that could have had tragic results..."
    http://www.tsa.gov/press/happenings/northwest_s...
  • BoscoH
    Yeah, I like how in the aftermath of this, all the news readers are spouting off about how TSA agents watching for suspicious people and dogs sniffing out fear are going to protect us. Methinks that if some dude at TSA could identify people who were gonna bomb airplanes, he'd be on the poker tour, not working for TSA.
  • Well we didn't have any terminals to, you know actually, cross reference passport/ID with watch lists or no fly lists.

    TSA/DHS is more concerned with PR than actually security. Anyone that has traveled through Israel will know exactly what I mean.
  • BoscoH
    I'm curious if you can answer this Justin, and if not, I understand. Having worked for TSA at apparently a low level, does the training make employees believe they are effective? Is there any unwhispered (or whispered) skepticism about it? I can't believe they train you to just act like your doing something to assuage the public's fears while they wait in line.
  • There is no secret, you can look up all the SOPs online if you want. You can even go to the x-ray manufacturer website and demo the x-ray.
    They gave about a week long class room training course and about 3 weeks shadow on the job training. Could have changed by now.
    Oh there is a lot of not even whispered skepticism all the time. I was on checkpoint one evening, when my buddy picked up a bag for random and opened it up to a glock. The x-ray opp didn't see it at all. Cops were there immediately, but if it wasn't for the random search it would have gone through.
    It's not that they intentionally train us to act like that, it's just that all the incentives involved, procedures in place, etc...end up in with the net effect of being a PR stunt. There were numerous times when celebs would "by pass" security on airline authority, Paula Abdul paid a Southwest employee to swipe her through to San Diego I think, (You can probably google it) the whole plane had to be re-screened at SD, the employee got fired I think, Paula got a small fine.
  • brotio
    ... if some dude at TSA could identify people who were gonna bomb airplanes, he'd be on the poker tour, not working for TSA.

    He sure as hell wouldn't want some government-employees union negotiating his wages. :-p
  • I used to work for TSA in Vegas. No unions thank god, although they tried to form one, but it didn't go over. That was a few years ago so I don't know what they have now.

    I can tell you first hand that things get through all the time. It is impossible to catch everything all the time, any common sense will tell you that.

    Like everything, it's all about the quality of people working for the organization that makes it work. Management at TSA was and probably is crap. The actual TSOs some are good, most are crap. What do you expect for 11 bucks an hour? It was great for me, part time going to school, but 11 bucks is shit living in Vegas during the bubble. Rents were and still are in the $700-900 for a one bedroom. Now throw in passengers that want "security" but don't want to be bothered to be searched. Ironically, it was the weekend workers (strippers, this was Vegas afterall) that were the most accommodating.
    Now throw in antiquated procedures meant to make the public "feel better" but don't actually do anything to "secure." We didn't have the authority to stop people from getting on a plane. Only the airport police and airlines could stop a passenger from boarding. We are not allowed to "profile" meaning we have to stop and secondary screen granny instead of the one that are trying to blow up the planes. Now let me be specific here so I don't get called racist. We weren't allowed to hold, detain or inconvenience a guy acting "squirrelly" for fear of bad PR or lawsuit. Now couple that with the fact that those "squirrelly" folks are more apt to be causing trouble, not necessary terrorists but also just dumb rednecks that don't want to check their knives or guns, and think they can sneak it past security.

    Basically, what I'm saying is don't blame the TSO, blame the agency that sets them up for failure.

    I do have some great stories working there though.

    Here is an old but good article on some of the issues.
    http://www.usatoday.com/travel/flights/2008-06-...
    "The report says screeners have complained about discrimination, selective hiring, nepotism and "management misconduct" but gives no details."
    I can personally attest to each and every one of those complaints as well
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