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Quotation of the Day…

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… is from page 54 of my GMU Econ colleague Richard Wagner’s excellent 1989 book, To Promote the General Welfare [2]:

But the regimen of profit and loss that firms face in a market economy is not faced directly by governments in democratic polity. And the weakening of such a regimen weakens the incentive that policy entrepreneurs have to seek policy successes and avoid policy failures. For instances, what if the Edsel had been a government product, say the outcome of a public policy similar to the federal government’s creation of Amtrak? Would production have been halted as quickly? Or would there have been efforts to continue the program, such as requiring government contractors to use Edsels? Any such measure would make the Edsel look more successful, at the expense of an increased burden on taxpayers. Government regulation would have been used to cover up an additional tax burden that was used to subsidize the government Edsel.

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