Tuesday, April 07, 2009

More On Unintended Consequences

Blogging at Salon, Andrew Leonard responds to the very same
Nation piece I linked to last week about the unintended consequences of too much government. (I found Leonard's response via Radley Balko's Agitator blog). Here's what Leonard had to say:

Granted, this is the kind of stuff that makes libertarianism look attractive. And it is doubly distressing that Congress doesn't appear eager to close the loophole in short order. Unintended consequences of legislation are inevitable -- the measure of good government is how politicians respond to them. Without the will to impose real oversight, acknowledge mistakes and fix them when they are discovered, and constantly strive to improve governance, we will be stuck with bad government. And that might be one of the most distressing results of decades of being told that government is the problem -- we hear a story like Hayes', and think despondently, you know, they were right, rather than squaring our shoulders and reapplying ourselves to the wheel.

It's a big step that Leonard recognizes that unintended consequences are inevitable, but almost funny that his solution is simply finding the political will to fix those unintended consequences after it becomes apparent they exist ... as if the lack of political will was somehow the problem in generating these unintended consequences in the first place. I mean isn't this just an argument for an unending cycle of bad government, with the legislative response to previous unintended consequences generating more unintended consequences of their own? The problem isn't political will, but complicated legislation and rule making combined with the ingenuity of the American people to take advantage of or ignore those rules.


Anonymous rose said...

If you believe that CO2 emissions impose a cost on society, then tax them across the board. Simple.

It good debate on global warming is a good thing (which isn't happening) and if the progressives win the debate, then so be it.

But for God's sake, let a fucking economist design your policy! Instead we get a grab bag of subisides like ethanol that caused increased worldwide starvation and regulations like CAFE that bankrupted an auto industry.

A rational person has to conclude that these legislators are not well-intentioned and that they exploit their well-meaning constituents.

9:59 AM  
Anonymous rose said...

Just wanted to add one more thing on a related topic, cap and trade and some of its more subtle unintended consequences.

Forget for a second whether its good or bad idea. It sounds as if its unlikely they'll be able to get it through congress.

If that is the case, they will have accomplished nothing in terms of reducing emmissions. What they will have done is delayed, postponed or completely prevented countless long-term investments by companies in the mean time.

Companies cannot even begin to estimate the cost of consuming a fossil fuel 5 years from now w/ the potential for cap and trade looming. That means a company can't conduct any kind of reliable cost-benefit analysis on a project that would require using fossil fuels.

How many long-term investments, that could stimulate borrowing, employment, spending, and innovation have been delayed or canceled because Barack Obama has introduced incredible economic uncertainty at a time we can least afford it?

Put a carbon tax schedule in place, and that problem is resolved and companies can plan and invest.

12:36 PM  
Blogger lonely libertarian said...

Good point on future investments, but isn't that really just a microcosm of the entire economy? Banks are afraid to loan and people are afraid to do business because no one knows what the government is going to do next.

1:50 PM  
Anonymous rose said...

A relevant example of unintended consequences in the form of delayed investment from your boy wilkinsons blog:

"The [Chicago city] council has debated mandating hybrid purchases. But the rumor among taxi drivers is that in addition, or perhaps instead, the city or other government agency will eventually subsidize the purchase of a hybrid.

Drivers have decided that they should not purchase a Prius or other hybrid until the subsidy arrived. Buying one now would mean over-paying.

Regardless of whether it is realistic to expect Chicago to someday subsidize purchases of hybrid taxis, the fact is that some cab drivers are considering the possibility. If taxi drivers consider future subsidies in their industry, then so must bank executives.

Last fall the public learned that banks were not selling many of their legacy mortgages and mortgage-backed securities, despite the impression that ownership of the assets were hindering the banks’ lending. A variety of theories have been put forward to explain this failure, and to suggest what the government might do to fix it.

But the lack of trade in mortgage-backed securities may have something in common with the lack of trade in hybrid Chicago taxicabs. The secondary market for legacy mortgages may have stagnated largely because of the (ultimately correct) anticipation of a huge government subsidy."

1:46 PM  
Blogger lonely libertarian said...

That was a great one, good catch

3:24 PM  

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