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5 Unintended Consequences of Regulation and Government Meddling by Robert P. Murphy

Voters frequently support measures that sound noble and beneficial but end up causing serious mischief — and often hurt the very groups the measures were intended to help.

A well-known example is price controls, which include minimum wage laws and rent control. These can cause unemployment among low-skill workers and apartment shortages for those without connections.

But that’s not all. Not by a long shot.

Here are five more examples of unintended consequences.

1. “Shoot, Shovel, and Shut Up”

The Endangered Species Act and other laws restrict how landowners can use their property if it is discovered that their actions may adversely affect vulnerable wildlife. Besides the injustice of violating property rights, this regulation produces perverse results.

Imagine a landowner in the Midwest who had plans to sell to an outside developer who wanted to build a shopping mall. One morning, a few days before closing the deal, the man is sipping coffee and looking off his back porch into the woods. He suddenly sees a woodpecker that he recognizes as a protected species. What will the man do, if he follows pecuniary incentives? Is he going to call up federal bureaucrats and tell them the good news?

No. The man will probably go get his gun and shovel and never speak of this incident to anyone.

2. Seat Belt Legislation Kills

In the typical debate over seat belt mandates — in which drivers can be heavily fined if caught driving without buckling up — advocates of liberty tend to stress individuals’ “right to be stupid” while others claim that public safety trumps absolute freedom. Ideology aside, do such laws make us safer?

Economist Sam Peltzman looked at the evidence after some states enacted seat belt legislation, while others did not. He found that drivers did buckle up more frequently because of the government penalties but that traffic fatalities were roughly unchanged.

True, the probability of dying in a car crash went down, if you were in a crash, because wearing a seat belt definitely helps you survive a typical accident. However, the states that passed the seat belt legislation saw anincrease in rates of traffic accidents. Because people felt safer, they drove just a little more recklessly. No individual driver wakes up and says, “I’m going to get in a fender bender today,” but with millions of people driving hours per day, 365 days per year, we will definitely see more accidents in the aggregate if people are even slightly more aggressive on the margin.

Peltzman found that total fatalities were about the same. The death rate for motorists crept down, but this was offset by a higher death rate among pedestrians and cyclists hit by cars. Some groups obviously did not benefit from the higher prevalence of seat belt usage.

3. Stricter Vehicle Fuel Economy Mandates Do Little for the Environment

The federal government imposes minimum corporate average fuel economy (CAFE) standards on certain vehicles. Some states wanted to “do more” for the environment, so they passed tighter mandates. In other words, states like California imposed higher mile-per-gallon requirements on cars sold in California than the federal government insisted on.

But the way the states structured their rules led to a significant “leakage.” If a car manufacturer increased the average fuel economy for its vehicles sold in California, for example, then those cars counted as part of its “fleet” in calculating the average fuel economy for its cars sold in the nation as a whole. The manufacturer could then get away with selling cars that had lower fuel economy in the states that did not supplement the federal rule, and they were still satisfying both state and national standards. Thus, the California rule as originally designed led to fewer emissions per vehicle-mile in California — but not nearly as much in the nation as a whole. Some economists estimated this “leakage” to be as high as 74 percent. The hodgepodge of standards simply raised the total costs of vehicles while doing little to reduce total US emissions.

4. Jane Jacobs Combats City Planning

Fans of Austrian economics should not be surprised to learn that Jane Jacobs, the champion of the American city, found several flaws with typical bureaucratic city planners. For example, zoning regulations broke up the spontaneous growth of cities into “residential” and “commercial” sections, spawning crime and other social ills.

Originally, apartments were interspersed with shops, so that the owners could always keep an eye on their businesses and on their children. This “natural surveillance” was destroyed with zoning and other regulations, not to mention the interstate highways that would rip neighborhoods apart and the austere “housing projects” that placed most adults far away from the street and thus unable to monitor and shoo away unsavory characters. Zoned neighborhoods became unsafe neighborhoods.

5. Three Strikes Mean You’re Out

In an understandable reaction to “liberal” judges who would give slaps on the wrist to repeat offenders, the 1990s saw a wave of automatic sentencing legislation to take away judges’ discretion. This included California’s famous 1994 “Three Strikes and You’re Out” rule (Proposition 184), where someone convicted of a third felony would get 25 years to life. Currently, 24 states have some form of “three strikes” legislation.

One problem with these rules is that many acts are felonies that most people would consider petty, such as bringing a smoke bomb to high school. In California, one man with two prior felony convictions was sentenced to 25 years to life for being with a friend who got caught selling $20 of cocaine to an undercover cop.

An unintended consequence of the “three strikes” rules is that someone with two prior felony convictions now has a serious incentive to evade arrest for a third. And in fact, empirical studies of Los Angeles data suggest that more police officers have been killed because of this effect.

The Upshot

Incentives matter. It’s not enough for voters to endorse legislation that has a nice title and promises to do something good. People need to think through the full consequences of a policy, because often it will lead to a cure worse than the disease.

Robert P. Murphy

Robert P. Murphy is senior economist with the Institute for Energy Research. He is author of Choice: Cooperation, Enterprise, and Human Action (Independent Institute, 2015).

Open letter to the voters of Florida on Common Core 3-30-15

Here’s a simple question for you to ask YOUR representative and Senator: “Are you representing your constituents and the children and educators of your district? Or do you just push the buttons they tell you to push?”

“Did you make a back room deal, or do you really believe (not!) that the education bill now presented actually helps alleviate the problems of Common Core and High Stakes Testing?” If you do, exactly what improvement was proposed? Then watch them squirm…

I CHALLENGE you to do this, and do it NOW. They will vote in session on April 1 (April fools day-how appropriate) for a bill that KEEPS COMMON CORE, KEEPS HIGH STAKES TESTING, KEEPS the contract with AIR ($220 million) in spite of the FSA failures, and still spends BILLIONS to administer computerized tests which benefits the corporate cronies (Bill Gates, Pearson, GE, George Soros, Rupert Murdock, Walmart, HP) who are funding Jeb Bush’s presidential campaign.

You know, I have spent a lot of time in the State Capitol talking with legislators to let them know we have been FOOLED by the many false claims by Bush, Rick Scott, and their sycophants about how GREAT Florida schools are- How we have “accountability,” “rigorous standards” and learning gains are enormous!

But we have shown them the REAL story comparing our students with nationally normed and validated tests that have been in use for decades, the ACT test. It shows Florida’s results in free fall since Jeb Bush took over since 1998. We are 5th from the bottom when compared to other states in this validated test which measures knowledge, not just test taking skills.

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The FCAT and FSA is a proprietary test which does NOT provide accountability to taxpayers and parents. It has no relationship to other states. Listen to what Senator Gaetz, a former superintendent of schools, now huge supporter of Jeb Bush says.

In committee January 7, 2015, Senator Gaetz said: http://thefloridachannel.org/videos/1715-senate-education-prek-12-committee/. At hour 1:15, after Commissioner Pam Stewart’s presentation.

“Here’s what I’ve learned today.”

  1. “We don’t know how much time is consumed by Statewide Assessments.”
  2. “We don’t know how much money it costs to perform state mandated tests.”
  3. “We don’t know whether tests that are performed by state mandate are valid and reliable.”
  4. “We’ve learned today that we have no contingency plan if there are problems with statewide assessments.”
  5. “We have not beta tested statewide assessments.”

Then he voted for it.

WHY? Knowing all that. there is only one answer. MONEY AND POWER! Leadership controls everything in Tallahassee. Our shadow leader is Jeb Bush. His puppets are hoping for Washington appointments, jobs, endorsements, campaign money or other “crumbs from Longshanks’ table.”

Jeb Bush’s special friends include, Rick Scott, Don and Matt Gaetz, John Legg, Steve Crisafulli, Eric Fresen, Lizbeth Benacquisto, Garrett Richter, Jack Latvala, Bill Galvano, Andy Gardiner, Blaize Ingoglia, Kelly Stargel, Janet Adkins, Marlene O’Toole and others you may find attending the Foundation for Excellence in Education, their favors funneling organization.

Ask your legislators if they attend their functions. Ask who paid for their travel, expenses, incidentals, and what happened at the meetings they had there with Bush’s cronies, Pearson, Gates and other vendors.

Now you know why and how your children, the future of Florida and the Nation, are being thrown under the bus. Will you stand quietly, or will you join us in holding THEM accountable for massive spending and purposely crippling our kids future?

CALL THEM NOW to stop this bill, HB7069 and SB616, and start over.  We pay them for solutions, not kicking the can down the road while our children are subject to State sponsored child abuse.

REAL solutions were presented in HB1121 and SB1496, but Jeb Bush controlled leadership killed these bills by not allowing them to be heard.  Bring them back and STAY there until you get it right.  We are watching.

RELATED ARTICLE: This Top Teacher Is Right: Common Core Is Wrong Solution

Florida Legislature begins 2015 Session with Introduction of Motorcycle Friendly Bills

The Florida Legislature started its 2015 session this week with the introduction of 10 bills aimed at distracted driving and two pieces of right-of-way legislation designed to protect vulnerable road users.

S.B. 908, introduced by Sen. Thad Altman (R-Cape Canaveral), would require all motorists, when passing vulnerable road users, provide a distance of at least 3 feet between the vehicle and the vulnerable road user. It also would require all accident reports to include information in the official report if a right-of-way violation led to a crash between a motorist and a vulnerable road user.

Under S.B. 908, if a motorist caused bodily injury to a vulnerable road user, the motorist would be required to pay a fine of up to $2,000 and would face a suspension of driving privileges for six months.

S.B. 1376, introduced by Sen. Greg Evers (R-Pensacola), would require that any motorist who commits a moving violation that causes serious bodily injury to a vulnerable user be required to pay at least a $1,500 fine, serve a minimum of 30 days of house arrest and attend a driver improvement course.

A vulnerable road user is defined under Florida law s. 316.027 as:

  1.  A pedestrian, including a person actually engaged in work upon a highway, or in work upon utility facilities along a highway, or engaged in the provision of emergency services within the right-of-way;
  2.  A person operating a bicycle, motorcycle, scooter, or moped lawfully on the roadway;
  3. A person riding an animal; or
  4. A person lawfully operating on a public right-of-way, crosswalk, or shoulder of the roadway:
  • a. A farm tractor or similar vehicle designed primarily for farm use;
  • b. A skateboard, roller skates, or in-line skates;
  • c. A horse-drawn carriage;
  • d. An electric personal assistive mobility device; or
  • e. A wheelchair.

Additionally, legislators in Florida have introduced ten bills to reduce distracted driving. H.B. 1, H.B. 9, H.B. 17, H.B. 191, H.B. 1313, S.B. 192, S.B. 246, S.B. 270, S.B. 492 and S.B. 1022 would all limit cellphone use by drivers.

“With nearly 80 percent of crashes involving some form of distraction, the AMA supports legislation that provides an incentive for motor vehicle operators to focus their attention on driving,” said Wayne Allard, AMA vice president of government relations. “The text any driver wants to send is not worth hurting a motorcyclist.”

For more information on the bills please visit the AMA’s Florida state legislative page.

Please visit the AMA’s distracted driving position statement for more information on the topic.