You don't hear this every day:
the shortcomings of governments should not be taken as a given. Just as economists think about how to improve market institutions, they can devote their talent to improving the institutions of government. The informational and rent-seeking costs of government intervention can be ameliorated through appropriate institutional design.
It's bizarre, actually, how much time is spent lamenting the failures of government versus considering how to improve its functioning, and then on the other side, how much time is spent lamenting the failures of the market versus offering policy ideas to ameliorate its shortcomings.
If President Bush, all his cabinet members, and ever head of a government agency were seeing their salaries accelerate into the tens of millions of dollars for no apparent reason, people would be very, very upset, and it would be yet more evidence that bureaucrats are inherently untrustworthy and incapable. When it happens to CEOs, it's either justified as the market's inscrutable wisdom at work, or folks think about how to reorder Boards of Directors so it stops happening. In the one case, we try to fix it. In the the other case, it' would be used as evidence that the institution can't be fixed.
