The always excellent Richard Fernandez at Belmont Club echoes a theme that I addressed in my post on the Critical Review’s special issue on the financial crisis, to wit, how government regulation tends to impose a variance-reducing standardization that by reducing diversity perversely increases systemic risks:
One of the arguments for centralizing power in government is that it reduces variance. People get ‘standard’ care, which is ‘equitable’ and predictable. This is contrasted with the wider distribution of outcomes when the same decisions are left to individuals. In the health care debate for example, there are people who obviously get great health care and others who get relatively bad insurance. Wouldn’t it be better if the variance were reduced by a government program?
Left out of this argument is the idea of systemic risk. Leaving decisions to individuals makes it unlikely that they will all get it right but it equally implies they almost never get it all wrong. Society based on individual choices has a diversified portfolio of outcomes. In contrast if a government gets it wrong, it goes spectacularly wrong. Let’s forget about Fannie Mae and Freddie Mac for a moment; turn our eyes away from Barney Frank and look across the Atlantic to the UK’s ironically named Office of the Public Guardian.
Mark Steyn poses a question that I’ve thought about too: what explains the disconcerting contrast between the Obama administration’s Alinsky-esque heavy-handedness in confronting its domestic opponents (or is it enemies?) and its pusillanimity in dealing with avowedly anti-American regimes abroad?:
Who are the real “Untouchables” here? In Moscow, it’s Putin and his gang, contemptuously mocking U.S. officials even when (as with Secretary Clinton) they’re still on Russian soil. In Tehran, it’s Ahmadinejad and the mullahs openly nuclearizing as ever feebler warnings and woozier deadlines from the Great Powers come and go. Even Obama’s Nobel Peace Prize is an exquisite act of condescension from the Norwegians, a dog biscuit and a pat on the head to the American hyperpower for agreeing to spay itself into a hyperpoodle. We were told that Obama would use “soft power” and “smart diplomacy” to get his way. Russia and Iran are big players with global ambitions, but Obama’s soft power is so soft it doesn’t even work its magic on a client regime in Kabul whose leaders’ very lives are dependent on Western troops. If Obama’s “smart diplomacy” is so smart that even Hamid Karzai ignores it with impunity, why should anyone else pay attention?
The strange disparity between the heavy-handed community organization at home and the ever-cockier untouchables abroad risks making the commander-in-chief look like a weenie â€” like “President Pantywaist,” as Britain’s Daily Telegraph has taken to calling him.
The Chicago way? Don’t bring a knife to a gun fight? In Iran, this administration won’t bring a knife to a nuke fight. In Eastern Europe, it won’t bring missile defense to a nuke fight. In Sudan, it won’t bring a knife to a machete fight.
But, if you’re doing the overnight show on WZZZ-AM, Mister Tough Guy’s got your number.
Not one of Steyn’s best columns (admittedly compared to a very high standard), but a fair point nonetheless.