It keeps popping up. Take the article on Page 1 of the Oct. 24 issue of the Los Angeles Business Journal. It’s about how the Clean Truck Program at the ports of Los Angeles and Long Beach perversely led to the reintroduction of some of the oldest and dirtiest trucks. Oh, sure, the cadre of unclean trucks is small, but isn’t it interesting that a massively planned and very expensive program to replace old trucks with clean-burning new ones also unexpectedly created a loophole that more or less encourages use of the oldest and dirtiest ones?
I used the word "unexpectedly," but that’s probably wrong. Whenever the public sector regulates or taxes the private sector and its citizens, you can almost expect unintended consequences. Examples are abundant.
The Family and Medical Leave Act of 1993, designed to force employers to be family friendly by allowing employees up to 12 weeks off for illness, is widely suspected of making employers very wary of hiring anyone with a chronic illness. Likewise, laws designed to protect older workers from age discrimination had the cruel consequence of turning older job seekers into untouchables, no matter how furiously they chop their salary requests. In that sense, both of those efforts increased discrimination.
One of the most famous unintended consequences resulted from a luxury tax in the early 1990s. The tax, designed to sock it to the rich, ended up hurting the working class. It so devastated the yacht business in the Northeast that 25,000 boat builders lost their jobs – resulting in unemployment payouts by governments that exceeded the money governments brought in from the tax. (One of the Kennedys later proposed creating a federal subsidy to help wealthy people buy yachts.) That was a consequence that was not intended.
My favorite? You might remember that Congress wanted to put the brakes on gas guzzlers, so in 1975 it passed the Corporate Average Fuel Economy standards, which mandated that auto fleets had to attain increasingly better mileage over time. Detroit responded by producing smaller and flimsier cars. Consumers, wanting sturdier rides, responded by gravitating to trucks, which weren’t subject to the more stringent mileage rules. Automakers responded by repurposing their trucks into SUVs, and a craze was born.
So many consumers bought SUVs in recent decades that some have argued that the CAFE standards, rather than curtailing gas guzzlers, actually increased their numbers. I don’t know about that, but I do know that when the standards were introduced, the United States imported about 35 percent of its oil; now it’s closer to 70 percent. Now there’s a consequence that was unintended, no?
The beat goes on. The chairman of the Federal Trade Commission hinted recently his agency may create a "do not track" registry for the web similar to the "do not call" list for telemarketers. That would allow web surfers to easily opt out of having their online activity secretly tracked by marketers who use the information to create profiles of them.
That seems reasonable, but if marketers can’t target their pitches to specific people, then the value of online ads will be seriously compromised. As a result, online publishers may be impelled to charge for content; web surfers will bump into more pay walls.
So an effort to protect the privacy of Internet users may result in reducing choices and increasing costs for them.
That’s the Law of Unintended Consequences. It just keeps popping up. I mean, it’s the law.
You can fight the law, but the law always wins.