Is Tim Harford, the undercover economist, just covering up for other economist colleagues?

Sir, Tim Harford, The undercover economist, writes about “matching mechanisms to address allocation problems without resorting to traditional markets” as “Nobody wants… to be assigned a place on the whim of a well-meaning bureaucrat who doesn’t really understand the situation.” “The refugee crisis – match us if you can” May 21.

O yeah! But why does he allow well-meaning bank regulators, who clearly don’t understand the situation, to distort the so essential allocation of credit to the real economy?

One thing is sure, no matching mechanism ever, would help those who by being perceived as safe already have easier access to bank credit, like sovereigns and the AAArisktocracy, at the cost of making life harder for those who perceived as risky, already have more difficult access to bank credit, like SMEs and entrepreneurs.

And no matching mechanism ever, would push banks to build up excessive exposures against little capital to those who have always produced the big bank crises, namely those ex ante perceived as safe that ex post turn out to be risky.

Could it just be that the undercover economist is really just an economist covering up for other colleagues’ mistakes?

@PerKurowski ©