How many people will have meaningful input in determining the overall allocation of the billion [sic, trillion] stimulus? 10? 20? It won’t be more than 1000. These people–let’s say that in the end 500 technocrats will play a meaningful role in writing the bill–will have unimaginable power. Remember that what they are doing is taking our money and deciding for us how to spend it. Presumably, that is because they are wiser at spending our money than we are at spending it ourselves.
And then this comment on that same post:
This argument by Kling is one of the most persuasive (and easily shared) that I’ve seen yet against the bailout. Most people don’t necessarily understand the complex relationship between demand and the economy, the effect of a “multiplier”, or any other bizarre macro effects. On the other hand, they CAN put themselves into the shoes of the techno-crat and see what an impossibility this would be. (Particularly for someone who doesn’t have a track record of success or accomplishment).
Its possible, though, that people putting themselves in the technocrat’s shoes will conclude the technocrat would actually be more able then them to allocate these resources. But that’s not the argument. The point is nobody is able to allocate such a large amount of resources in such a small amount of time.
I wonder what the turnover rate in large private equity funds is… I’d guess it takes 10 years for a billion dollar fund to completely divest itself and reinvest those funds.