In the field of economics, unintended consequences are ubiquitous. There are many reasons why unintended consequences may result from the decision-making process: bad leadership, misinformation, insufficient data and so forth. These consequences may seem obvious in hindsight, but the glass ball into the future has no better than 20/200 vision.
Politicians create policy teeming with unintended consequences. The difference between unintended consequences resulting from government policy and those from economics is that the former has a much greater chance of being foreseen, and yet still ignored.
Two hundred years ago, our representatives would live part-time political lives, spending half their time creating and implementing policy, while spending the rest at their real job as a farmer, storeowner or other profession. Today, politicians employ every waking moment contemplating what new laws they can formulate.
This is why I partly consider it my fault so many of the policies cultivated in Washington fail. Civil servants simply have too much leisure time. It’s come to the point where they are not only politicians anymore. They consider themselves doctors, educators, CEOs, CFOs, police officers, and pharmacists. And because they consider themselves professionals of every field, they believe they know what is best for said field. When these arrogant politicians are given an eternity to do their jobs, the result is a government that finds ways to infiltrate every aspect of our lives.
There are countless reasons that explain why government legislation almost always creates more problems than it solves. But two stand out to me: policy based on populist ideology, and a general lack of knowledge concerning the effects their guidance will promote. There are literally thousands of laws and regulations created by big government than can be criticized:
Minimum wage laws are counter-progressive. These laws seem simple enough; raise the wage paid to the un-skilled. Not so simple. Minimum wage laws hurt small business – not evil multi-national corporations – the most. To accommodate wage laws, firms will do one of two things: fire a percentage of un-skilled labor, or raise the price of their product, hurting that laborer.
Subsidies, particularly those for farmers and oil companies, make me grind my teeth at night. Instead of calling them subsidies, they should be called, “I gave money to the senator’s reelection campaign, and he is paying me back tenfold with yours.” We are informed that subsidies are needed to protect an industry. In reality, they only create inefficiencies and push economic problems into the future. Think about the auto industry: because of subsidies Detroit has dug itself a whole twice as deep as it was in 15 years ago. An industry that is being subsidized cannot compete in the free market, by definition.
Government regulations on virtually every industry are a breeding ground for unintended consequences. And they always will be, because the private market is smarter than any legislator. Auto regulations such as fuel efficiency requirements will not lead to more efficient engines, only lighter cars that will be less safe. House Speaker Nancy Pelosi makes a victorious statement telling Americans that we will save money on gas thanks to the legislation. Hours later leading automakers tell us the increase in the price of vehicles will more than offset savings on gas.
Public education is my favorite example of unintended consequences, as intuition warrants that the government should have the ability to successfully manage an industry with no competition. Turns out that public education is the leading cause of many social inequalities our country is facing today. Ironic isn’t it? Every year more money soaks the public school system, and every year we act dumbfounded when test scores don’t meet expectations. Public education has resulted in race inequalities, and if we let it continue, it will be credited with the downfall of American ingenuity and a permanent underclass. By continuing to support public education our government is condoning, apparently unconsciously, the idea that only rich white kids can go to private preparatory institutions.
I do believe that politicians who create this legislation and others like it trust they are doing what is right. And there are some successful policies out there – somewhere, maybe, I think. But the point is the net effect of our government’s domestic policy is in the red. Moreover, the crux of today’s government legislation is that most is created in the hope of repairing passed failed policy.
What I am saying to you lawmakers is, go home! Take a break, and quit wasting my money on steroid inquires, attempts to “fix” public education and obsolete price-gauging legislation. Honestly, I would be delighted if you would use my tax money to fly yourselves to the moon and never come back.
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