B.S. Sentences that I read today..

From my money and banking textbook:

As with adverse selection, the government has an incentive to try to reduce the moral hazard problem created by asymmetric information, which provides another reason why the financial system is so heavily regulated.

I fail to understand why textbook writers in general stop doing economics when the get to government intervention. It's one thing to say that these problems potentially justify government intervention, but the above sentence is simply false.

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Which textbook is that BTW?

I've never taken an economics course, but it seems that even in the blogosphere, that view is obselete.  Or perhaps it's only obselete in the blog circles I travel.

The Economics of Money

The Economics of Money Banking and Financial Markets, 8th ed., by Frederic S. Mishkin. There's more like it in this chapter. Chapter 8 for anyone reading along, pg 194.

I remember the macro half of my principles text being nearly as bad at times. I was beginning to think it was trend in macro texts, but as a counterexample, I remember Mankiw's intermediate macro text being good about avoiding these things.