Wow! The Stuff Matt Y Knows!
The "Knowledge Problem" is a famous one in economics. Even a famous blog to go with it.
But there is NO KNOWLEDGE PROBLEM for Matt Yglesias. He knows all. Ay, marry now, unmuzzle your wisdom, sirrah!
Two tweets from this morning:
"I want to call it the rentier's fallacy: "If you don't let me overcharge, GDP will fall!" "
"Pharma frowns as consumers get access to useful medicine at close to market price: LINK"
In both instances, there is a correct price (Matt modestly calls it the "market price," but in fact it is the Yglesias Price, the price of God). Greedy, terrible people want to charge something other than the Yglesias Price.
But we must smite them! Price controls on rents, and force pharma companies to sell at marginal cost!
What, a shortage? Smite them again, for being greedy!
That's a lot of smiting, when it is the conceit that regulators (or bloggers!) think they know the correct prices that's causing the problem.
(I recognize that Michael G cringes, but my point is that I don't know the correct price, and neither does Matt Y. If you want to make an argument for rent control, it can't be about "overcharging." It just can't).