Even if regulators are as smart as Leonardo da Vinci and as incorruptible as Mother Teresa, they can never have as much knowledge as the decentralized, competitive market process, so planned economies and planned industries fall further and further behind free-market systems. But in reality, even if they're smart, they're not incorruptible. Political influence always comes into play. What we're seeing with the bailout funds will also happen with the stimulus money.
Government planners claim to be able to aggregate all the available information and make informed decisions for the whole society. But market economies clearly produce far more economic growth than planned economies. It isn't just the United States versus the Soviet Union or East Germany versus West Germany. Consider the customer service and technological advances you get from FedEx versus the post office, or Microsoft and Apple versus the DMV.
In these few words, Mr. Boaz captures the core of the Hayekian argument against government intervention. The House voted in favor of the plan 244-188 (all Republicans and 11 Democrats voted against); the bill is expected to reach the Senate floor early next week, and needs only two Republican votes (pending the seating of Al Franken) to pass, assuming Democratic unity on the bill. Hopefully the logic of Mr. Boaz's argument with prevail.