Political Class Actions and The Many Unintended Consequences

One thing that most Americans never think is what happens after the political class takes action or passes a law? I think most of us just assume that once the law is passed, everything will be okay and work as planned. Unfortunately, that is almost never the case. For one, most of the laws pass never solve, or even address, the issue that they are purported to be addressing. Anti-drug laws do not work, Bush's public education initiative, No Child Left Behind, does not work (and the Obama version will not work either), the Federal government funded and started building a fence along our southern border to keep illegal Mexicans out of the country but the fence has been breached over 3,000 times, allowing who knows how many illegals to get into the country, we are told that we need an economic stimulus package that will be used to fix our crumbling infrastructure but the Associated Press reported that about half of the stimulus money for bridges was spent on bridges that were in excellent condition, etc. The list goes on and on.

Consider some more recent occurrences of unintended consequences:

• The main reason that BP has not gotten its runaway well under control is that the accident occurred about a mile under the Gulf Of Mexico. Why are they so far out in the Gulf and drilling in such deep water? Because Congress decided to force drilling further and further from the coastline, falsely assuming that our beaches would not get fouled by an oil disaster if the oil rigs were further away. The unintended consequence of their logic is that once the disaster did occur in deep water, it could not be readily fixed compared to if the drilling had been closer to shore. Yes, there may have been some localized ecological damage but it would have been contained and easily and more cheaply cleaned up. Now, this unintended consequence will spread disaster all along the Gulf and into the Atlantic Ocean, unintended consequences from a political class that did not think through the problem.
• In the past year or so, there have been horror stories of airline passengers spending hours and hours in airplanes waiting to take off resulting malfunctioning toilets, shortages of food and water, high degrees of stress, and other behaviors that one would expect being cooped up in a plane for long hours but not going anywhere. To remedy the situation, the political class passed a law that puts a cap on how long passengers can sit in a waiting plane before the airline starts being fined. Their logic was that if the airlines were facing stiff fines for delaying flights on the ground for more than a few hours, they would act more efficiently and promptly to get the passengers airborne. However, the unintended consequence of this law was that airlines can avoid fines if they cancel the flight before the time limit is reached. Consider this unintended consequence example: if a plane is scheduled to actually leave the ground fifteen minutes after the time limit elapses, rather than going through with the flight, the airline will cancel it to avoid the heavy fines and inconvenience all of the passengers even though they were very close to taking off. Thus, an airline will probably never get fined under this law but untold number of passengers will be inconvenienced by canceled flights, an unintended consequence.
• Back when the economy first started to implode, the political class told us that we had to bail out the banks because they "were too big to fail." If they failed, then the entire financial system might collapse. Two years after the political class sold us this bill of goods, it appears that the four biggest banks, Wells Fargo, Bank Of America, Citi, and JP Morgan, are now bigger than ever with a bigger percentage of deposits and assets than before the economic meltdown. Thus, in an attempt to save banks "that were too big to fail", the unintended consequence was that the political class made a handful of the surviving banks bigger than ever. This must mean that we are no closer to getting out from under the "too big to fail" dilemma despite wasting billions and billions of taxpayer dollars on bailouts.
• In almost every past recession, it was small businesses that led the country out of the economic downturns with their hiring of new workers. However, in this recession, unemployment has stayed very high and small businesses are not hiring people, they are just getting more productivity out of their current workers. What happened? According to many sources, small businesses are having a very difficult time getting loans to expand. No loans, no new hiring. Thus, the unintended consequence is that the political class has been so tied up with the big banks, all of their actions in the banking industry over the past two years has resulted in an environment where banks do not want to loan money except to the biggest companies.
• Last year, it was discovered that many children's products coming from China factories had high levels of lead in them. The serious concern was that kids might put the toys and other products in their mouths, ingest some of the lead, and suffer serious health issues. The political class and government agencies got involved after the fact and made sure that those products were removed from the shelves and not longer imported. The unintended consequence of their late actions were highlighted in a May 20, 2010 Associated Press report that found high levels of the toxic metal cadmium in some imported children's products. Thus, through incompetence, the removal of lead from products was not enough to protect our kids since the overseas factories just replaced one toxic metal with another. So, just when you thought it was safe to have your child suck on a toy because of what the government did to remove the lead, you run smack into the unintended consequence of a different dangerous metal to be ingested.
• The recent health care reform legislation that was passed was opposed by every Republican in both the House and the Senate and had to be carried by all Democrat votes. The Democrats have traditionally been strong advocates of abortion rights for women. However, according to an Associated Press May 17, 20120 article, the way the final legislation was written had the unintended consequence of making it easier for a state government to restrict abortion coverage by private insurance plans serving the 30 million uninsured Americans in the so-called insurance exchanges that will take place in 2014. In other words, if you buy your health insurance through these new exchanges, the state where you live can make it much more difficult to get funding for an abortion. Arizona and Tennessee have already passed laws to this effect and dozens of other states are considering doing the same. Not quite the result the Democrats wanted in the area of abortion rights, certainly an unintended consequence.

There are probably a number of reasons why political class and government programs do not go as planned and result in unintended consequences. First, some of these issues are very complex (the banking/financial industry, the 2,400 page health care reform bill) and the politicians are not smart enough to understand how things work. As a result, their intentions result in unintended consequences that they were not intelligent enough to foresee.

Second, there is no accountability for correctly implementing many of these programs. Why was taxpayer money wasted fixing bridges that did not need to be fixed, especially when we were told by the politicians that one benefit of spending obscene amounts of borrowed money is that our crumbling infrastructure would be improved? The fence on the border costs billions of dollars to build, why is no one being held accountable for its poor performance and numerous breaches?

Third, as we have said many times in this blog, politicians do not solve problems, they only get re-elected. They are either not smart enough to find root causes and solutions for problems, they are too lazy to find the the root causes and solutions, or they do not want to find the root causes and solutions since it may harm their election chances. In any case, we suffer the unintended consequences of bad legislation, legislation that is not properly executed, or politicians that are not held accountable for laws and policies that go astray.

Thus, in the future, whenever Congress passes a law, do not think what good the law will do. Focus on all the ways things that could go wrong, you are far more likely to be right tracking the latter possibility than the former. At the same time check out Step 39 and Step 34 in "Love My Country, Loathe My Government" to see what could be done to help minimize unintended consequences. If we do not do it, our political class will certianly not do it.




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