The Law of Unintended Consequences

Here is a guy who has the best explanation for how the law of unintended consequences operates, especially in how that deals with government regulation.

His last sentence explains why we have so many problems today:

Does the law of unintended consequences mean that the government should never try to regulate complex systems? No, of course not, but it does mean that regulators should be humble (no trying to remake man and society) and the hurdle for regulation should be high.

The issue we have is that our politicians today have NO HUMILITY at all. They think they know it all and treat the common with disdain. Secondly, since many of the current politicians were alive and active in the 1960's, they have a world-view that makes them think they already fundamentally changed society. (I personally believe society was already evolving. The action of the 60's may have sped up the process by 5-10 years, and the turmoil they caused was just the friction of making something move faster than it was intended to go). Because they think they did it once, they think they can do it again. Finally, there is no high hurdle for when to regulate. If any Sally, Jane, or Louise whines, then the politicians think they need fix a problem.

Meaningless Economic Stimulus Package v 2.0

More information has come out about the package. I have to wonder, though, is it really a "stimulus" if checks won't be cut until June? We must really be in dire straits if we can wait 5 months for the fix (sarcasm).

It just goes to prove my earlier point that we probably don't really have a problem. Most of the reason people think we do is because of the extra hyperbole produced by a presidential campaign. Somebody is trying to "re-ignite" Clinton's 2002 win with "It's the Economy Stupid." Of course, to run on that platform, then the myrmidons must believe that the economy is bad. So, the candidates preach the economy is bad, the journalist endlessly repeat that the economy is bad, and the lemmings start believing the economy must be bad.

We have been raised to rely too much on experts and not enough on ourselves.

Economic Stimulus is Meaningless

Many economist and experts believe that we are sitting at the precipice of recession, if we are not already in one. I'm not sure I believe them because my experience tells me that people are working and I still see lots of "hiring" and jobs available. However, for the sake of argument, I will concede that they are correct and assume that the economy is not doing well.

As in most cases these days, the government sees a problem and believes that they "have to do something." People read the papers, become worried, and demand solutions to the problem. They call their congressman and senators and ask, "How is the government going to protect me from this possible calamity?"

We've been hearing about a possible "economic stimulus package" that congress has been trying to deliver that will "fix" the problem. It appears that once again, the government thinks the best way to "fix" the problem, is to send everybody some money. The problem is, though, that this is not a solution.

Didn't we do this in 2001? It would seem to me that if sending everybody $300 would "fix" a recession, then we wouldn't need to do it again. So, that means that when this plan was tried 7 years ago, it didn't "fix" the problem, it only delayed the problem. It may temporarily "fix" a symptom, but it doesn't address the root causes of the economic problems. Why does congress think it will work this time?

The real issue I see is that the "common man" has chosen to burden himself with lots of personal debt and little savings. Many people have jobs, but are living paycheck to paycheck. Because the individual's financial situation is shaky, it causes people to feel that the economy is shaky. The truth is that $300 isn't going to "shore up" anyone's financial health. So, the most that this can do is give each family enough "extra" cash to frivolously spend while they think that the government has "helped" them.

The reality, though, will be that they are worse off because they will rush out to spend the $300, but instead buy something that is $350 or $500, thus increasing their debt load. So, they are still in the same financial situation (or worse), except they feel better because now they have a new flat screen TV, thanks to Uncle Sam.

So, the government gets credit for "doing something" even though that something does not actually fix the root cause and only has a fleeting impact.

Countries I've Been To

create your own visited country map

States I've Visited

create your own personalized map of the USA