Tag: unintended consequences
Great Moments in Unintended Consequences (Vol. 3)
“The Year: 1992
The Problem: Nude dancing is degrading to women and ruining the moral fabric of Alberta, Canada.
The Solution: Establish a one-meter buffer zone between patrons and dancers.
Sounds like total buzzkill! With puritanical intentions. What could possibly go wrong?
It turns out that dancers earn most of their money in the form of tips, and dollar bills don’t fly through the air very well. Thus, the measure designed to protect dancers from degrading treatment resulted in “the loonie toss”—a creepy ritual where naked women are pelted with Canadian one-dollar coins, which are known as loonies.
Way to make the ladies feel special, Alberta.”
As Bastiat Would Say, Peer Past the Obvious With Pandemic Policies
“Take, for example, the massive amount of additional debt the federal government has imposed on future generations of Americans during the COVID-19 crisis. That which is seen is the money flowing from the federal government to the unemployed, to those taking leave due to rescue money given to businesses during the pandemic. While we might be aware in the abstract that there is an accompanying rise in U.S. government indebtedness, that which is not seen is the increase in taxes that must be paid by future generations. Nor do we see the slower economic growth that will be caused by the need to pay off this debt.
Even less obvious are the unseen effects of making permanent the supposedly temporary creation of federal paid-leave entitlements. While it’s easy to point to all the advantages of such a move for the 35 percent of women who didn’t have any such benefits pre-COVID-19, it’s more difficult to see the lower wages and employment that will result. Also hidden from our vision is the increase in employment discrimination fueled by this policy: When governments arbitrarily increase employers’ costs to hire certain groups, fewer members of those groups get hired. The academic literature is clear that such legislation inflicts very real negative effects on women.
Also harder to spot are the unseen effects of rent-control legislation. Such regulations exist in states and cities nationwide, though it wouldn’t be surprising to see more such policies implemented in this crisis’s wake. The benefits are easy to see. The rules promise to make housing in high-value rent markets more affordable for middle- and lower-class families. But once such legislation is implemented, reality kicks in.
We see rents going up more slowly than they likely would have otherwise. When paired with eviction protections, this policy gives an illusion of control to tenants who were already in rental homes when the regulation was adopted. What is unseen, however, is significant. Rent-control statutes reduce the incentives for property owners to supply their facilities as residential housing, and they make it less attractive for developers to build rental housing. Rent control even diminishes landlords’ willingness to maintain the quality of their units. The final result is less and lower-quality housing for ordinary people.”