From the beginning of Eliezer's piece

I think my libertarianism rests chiefly on the empirical proposition—a factual belief which is either false or true, depending on how the universe actually works—that 90% of the time you have a bright idea like “offer government mortgage guarantees so that more people can own houses,” someone will somehow manage to screw it up, or there’ll be side effects you didn’t think about, and most of the time you’ll end up doing more harm than good, and the next time won’t be much different from the last time.

I think there's an interesting congitive phenomenon going on here. If you tell the average Joe that you propose to deregulate some industry or activity, they easily call to mind the potential negative consequences - "they'll just pollute as much as they want now" or "only the biggest companies will buy up the fishing quotas" etc. What the average Joe doesn't think about are the potential negative effects of regulation - unintended consequences and regulatory capture for example. Regulatory capture is a sort of funny case because though the concept was invented by a Marxist (if memory serves), only economists and libertarians seem to think about it. When the average Joe does recognize these shortcomings, they virtually always get to designing a "better" law, agency, and/or policy. For evidence, I offer r/politics, though there's an admittedly liberal slant there (relative to the population).

I'm not sure what is causing this bias or even how to categorize it, but it seems related to how most people respond to the broken window fallacy. Some effects are "seen" and others "unseen", or rather more easily seen and less easily seen (which correspond to something like direct effects and indirect effects), and the average person is much better at anticipating "seen" effects. Something like this is going on in the political case - at least in terms of unintended consequences, but that's not all of it. Regulatory capture occurs, in part, because people in the government are no more or less corrupt than people outside of the government. Most people are quick to suspect private companies of being corrupt, but never a new regulatory agency to reign in that private company. The solution to a government failure is always government. Rarely does the average Joe even ask the question "is the government even good at doing this sort of thing?" At least at the surface level, this looks nothing like "seen" and "unseen." I'm not entirely sure what's going on here, but I suspect figuring it out will help explain political preferences.