[cleetus]

I think maybe a better question is not if markets are fully efficient, but if markets are more efficient than the alternatives. I read the Cassidy book years ago, so I might be misremembering, but I don't think that was something he spent much time discussing. I don’t think many would argue that markets can't fail and aren't fully efficient - he spent the entire book demonstrating that.

The idea that regulators have the ability to design, implement, and maintain laws that correct or protect from market failures without producing unintended consequences, perverse incentives, significant costs, or market distortions more severe than the original market failure was not sufficiently addressed, from what I remember. Despite their problems, markets tend to be dynamic, adaptive, and innovative, while regulations tend to be rigid, slow, and reactionary. I don't know what the answer to market failure is, but I found the book unsatisfactory in that regard.

[onlyrealcuzzo]

Cassidy spends plenty of time stating that regulations are often bad for markets, and he spells out clearly which types of markets need to be regulated: specifically markets with negative spillovers, mono/oligopolies, and the financial industry because of its unique ability to impact money supply.

He goes to GREAT lengths to talk about all of the potential pitfalls and problems with placing regulations on these industries. And he even gives many examples of times in the past where things did and did not work.

Sure, you can get a positive outcome from the wrong approach. But examples are probably the best thing we can look to...