What [Mark Thoma] has not shown us and, more upsetting, what so few advocates of government intervention even try to show us, is how a government regulator will have the right incentive to do the right thing. Will the government regulator be fired if he screws up? Not typically. Will he get a huge bonus if he does something right? Not typically.
Government bureaucrats, like private-sector middle managers and unionized ironworkers and associate professors, are human beings. They respond to incentives. They reason from imperfect information. They make mistakes. Expecting any given class of institution to transcend human imperfections simply because it happens to make you feel good is fundamentally ignorant and ultimately self-defeating.