Via Brad DeLong, Luigi Zingales offers some strident criticisms of the European Financial Stabilization Fund that seem persuasive to me. However, his flourishes of rhetorical libertarianism are very annoying:
After the sub-prime mortgage crisis, politicians alleged that the market was short-sighted and irrational, and rushed to propose new regulations. While some of the criticism might have merit, what gives politicians the moral authority to criticize? After all, as the EFSF shows, their orientation can be more short term and irrational than the market’s, repeating the same mistakes because they seem not to have learned from them.
Since “politicians” are among the most-despised social groups, it’s always convenient to position oneself in opposition to politicians. However, it’s simply not the case that “let’s not have politicians do anything” is a viable solution to any kind of problem. “The market” isn’t