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Most people understand cause and effect. Even a young child comprehends what happens to ice cream left outside. Political leaders routinely ignore the long-term effects of their legislative causes. Consider the following unintended consequences.
Congress outlawed age discrimination giving people over 40 legal tools to inflict tort pain upon their employers. Many older job seekers are now wondering why employers don't want to hire them.
Congress decreed that automakers improve gas mileage. Corporate average fuel efficiency was supposed to reduce fuel consumption and protect the environment. These standards did not apply to trucks, and the term SUV did not exist. Mandated fuel consumption restrictions gave birth to sport utility vehicles and gasoline consumption skyrocketed.
In 1990 the Americans with Disabilities Act was passed to protect jobs and promotion opportunities for the handicapped. According to a recent MIT study, employment for disabled men has decreased by 10% since 1990.
Scandalized by reports of excessive compensation, in 1993 Congress took away the corporate tax deduction for executive salary over $1 million. There was an exception for "performance based" pay. The use of stock options soared and somehow government blames corporations.
The list goes on and on. Consider public education and the war on drugs. More and more punitive legislation, billions of wasted taxpayer dollars, and millions of wasted lives have failed to achieve the desired effect.
They can pass as many laws as they like; but short of throwing everybody in jail, they cannot repeal human nature. Unscrupulous people will prey on those easily separated from their money. Creating more complex laws will only give the bad guys more cover to continue their theft.
The most recent congressional reforms-will--have unintended consequences. Perhaps some companies will go private to avoid the public scrutiny. This will hurt small investors by limiting the number of companies they can purchase stock in. Perhaps the boundary between risk taking and fraud will become blurred. Will financial loses due to bad business decisions send corporate officers to jail? Perhaps the economic benefit of limited corporate liability will be destroyed and our economy slowly smothered.
President Bush and Congress are creating barriers and incentives that will affect the economy and us. Unfortunately, they're not looking beyond the next election. We do know this. The new reforms will benefit lawyers, bigger government, and chronically incompetent regulatory bureaucracies with more money, staff, and authority.
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