The game that I call "trolling for libertarians" seems to be quite popular this week. I guess it's a slow summer. So you make straw-man attacks in order to draw hits.
Do you want to dissuade people from taking a libertarian position? Then you need to convince me that I should expect the institution of government to outperform individuals in making decisions. That is a tough sell.
Broadly speaking, individuals can make prudential errors, and they can make moral errors. I can fail to act in my best interests. Or I can fail to act in others' interests when it would cost me little to do so.
Contrary to straw-man representations, I believe that individuals make prudential and moral mistakes all the time. However, the institution of government is not some magic correction fluid for wiping out these mistakes. So, on the issue of economic inequality, for example, it is not enough to say that you believe that extreme inequality is unacceptable and therefore we need government. What if private institutions, flawed as they are, do a better job than government at improving the lives of those who are not well off? I believe that is the case. If you want to engage in an empirical debate over that issue, then let us agree that I will not simply assume that markets always work and that you will not simply assume that government works wherever markets fail.
I actually think that the best point at which to engage libertarians is over how, not why. In the real world, how can the potential harms of the institution of government be minimized? It is on the how questions that I see libertarians divided among ourselves, evading difficult issues with hand-waving, and engaging in wishful thinking.
For example, on the issue of financial bailouts, it is easy to say that we oppose bailouts. What is difficult to do, starting from where we are today, is to implement institutional mechanisms to prevent bailouts. Each bailout is like paying ransom for a kidnapping. No matter how much you promise never to pay ransom, in a real case involving someone you love, the incentive is to pay the ransom. Similarly, no matter how strongly we believe that bailouts are wrong, in a real case where a major financial institution is in trouble, politicians have an incentive to undertake a bailout.
There are many problems like this that libertarians face. It is really difficult to restrain the use (and, most importantly, the misuse) of power. I am more than willing to discuss the challenges of restraining the misuse of power. But I don't respond to trolls who assume away the misuse of power and from that assumption proceed to reject libertarianism.