Unintended Consequences
46 reasons why we can’t trust the government to do much of anything
Introduction
Today we are going to discuss various government programs and how they went awry. We are doing this for the purpose of demonstrating why we can’t have nationalized health insurance or the Bismarck or Beveridge models for solving the healthcare crisis. These models rely on heavy and frequent government control and intervention and that simply won’t work in the US, not even taking the incredible tax burden they would create into account. This article is arranged into sections with a name, a problem statement, a solution the government implemented and the sometimes ridiculous outcomes. These vignettes are cribbed directly from ReasonTV’s YouTube channel and can be found here.
These are presented chronologically with the earliest first. As you go down you will notice that nobody ever learns the lesson that there are always unintended consequences that the government fails to mitigate. These are presented tongue in cheek and hopefully you will laugh as you read them, but we are making fun of the people who make these mistakes. This is serious, however and in many of these cases people died.
Let’s dive in.
1585 - Spanish Blockade of Antwerp
The Problem
The blockade stopped merchant ships and cause food shortages and rising prices.
The Solution
Enact strict price controls on food.
The Unintended Consequences
Merchants don’t like to run blockades and get shot at. Without higher prices to control demand, food supplies dwindled. People started starving, since Antwerp had a more effective blockade than the Spanish.
1662 - Hearth Tax
The Problem
Charles II, King of England, needed money
The Solution
The Hearth Tax was implemented. The number of fireplaces was seen to be a proxy for wealth. The more fireplaces you had the more tax you could afford.
The Unintended Consequences
Nobody wanted government officials invading their homes to count stoves. Many stopped up chimneys to avoid the tax. One intrepid individual knocked out the wall between her fireplace and her neighbor’s and caused a fire that consumed 20 homes and killed 4 people. The revenue generated was less than expected and was repealed.
1696 - Window Tax
The Problem
England needs money
The Solution
Tax windows as a proxy for wealth. More windows means a bigger house means the owner can afford to pay more.
The Unintended Consequences
To avoid higher taxes houses were built with fewer windows. Existing windows were bricked over. Apartments were charged as single dwellings, putting them ina higher tax bracket. The lack of fresh air led to disease and stunted growth. It took politicians 150 years to see the error of their ways.
1773 - Light House Tax
The Problem
England needs money (Does anyone but me see a trend?)
The Solution
Levy a tax on merchant ships by length and width, more area, means more taxes
The Unintended Consequences
The tax didn’t address height, so ships got narrow and smaller in length but grew taller to avoid taxation. That made them almost unsailable. I guess you don’t have to pay taxes on a boat at the bottom of the sea.
1862 - Transcontinental Railroad
The Problem
The US needed a transcontinental railroad.
The Solution
Pay Railroad companies to lay new tracks
The Unintended Consequences
Union Pacific unnecessarily extended their tracks for hundreds of miles. The extensions did not run across the country as intended from East to West, but only around Omaha, from there to 40 miles outside of Omaha at a cost of over half a million 1862 dollars.
1883 - Controlling Rats
The Problem
Rats in Hawaii were taking over
The Solution
Import the Indian Mongoose to control the rat population
The Unintended Consequences
Rats are nocturnal but the Indian mongoose is active during the day, so never the twain shall meet. The mongoose, however, feasted on turtle eggs and endangered birds and remains a massive problem to this day.
1896 - Raines Law/Temperance
The Problem
Alcohol is ruining the moral fiber of New York.
The Solution
“Raines Law” An aggregation of laws that made it harder to open and maintain a drinking establishment. This included a ban of alcohol on Sundays, except for hotels and lodging houses that served drinks with complimentary meals. This was designed to cater to the rich who dined out when the servants were off on Sundays.
The Unintended Consequences
Basements and attics were converted to barely furnished rooms and bars made deals with neighboring lodging houses. In Brooklyn the number of registered hotels went from 13 to 800 in six months. To satisfy the food requirement, the bars invented the “Raines Sandwich” an easy, simple meal that would be served with the client’s drink, but not consumed. The frequently inedible sandwich would be whisked away in seconds, to be quickly paired with the next order. It was not uncommon for the same sandwich to be reused for weeks.
1900 - Argentinian Bachelors
The Problem
Argentinian bachelors sucking up resources without producing more Argentinians. (I’d like to see some proof on that one.)
The Solution
A bachelor tax. Tax unwed men of age. Strangely, the tax was waived if the bachelor asked a young lady and was rejected.
The Unintended Consequences
Professional Rejectors. These young ladies would reject your suit, for a price of course, helping the hated bachelors avoid the idiotic tax.
1903 - Political Cartoons
The Problem
Journalists keep portraying Pennsylvania senator Samuel Pennypacker as a parrot
The Solution
Ban all cartoons where a person is depicted as a beast, bird, fish, insect or other inhuman animal.
The Unintended Consequence
Turns out that people who make fun of politicians for a living are pretty comfortable with the First Amendment. Depictions of Pennypacker as a turnip, tree, chestnut burr, squash and beer stein among others, exploded. Penny packer doubled down with a new bill that made publishers and editors personally liable for the offending likenesses and challenged Pennypacker to take them to court, but the law was never enforced and removed from the books after Pennypacker’s tenure.
1940 - Georgia Ballot Access
The Problem
Communists.
The Solution
Bar Communists from appearing on ballots. (That has to be unconstitutional. Does anyone see another trend?)
The Unintended Consequences
Originally, for a third party candidate to appear on the ballot in Georgia, they needed signatures of 5% of the voters in a district to sign a petition. Three years later, the signatures had to be notarized. A few years after that qualifying fees were added. To this day, no third party candidate has appeared on a Georgia ballot.
1946 - High Beef Prices
The Problem
The price of beef is skyrocketing.
The Solution
Reinstate wartime federal price controls.
The Unintended Consequence
Farmers quit taking cows to market. Nobody got any beef and the party of the sitting president lost control of the white house for the first time in 16 years in what was called “The Beefsteak Election.”
1958 - Birds Eat Grain
The Problem
Birds in China eat too much grain.
The Solution
Chairman Mao declares the Eurasian Sparrow as an enemy of the state, kicking off a massing campaign to eradicate them.
The Unintended Consequences
Turns out that sparrows also eat insects and insects eat a lot more grain than sparrows do.100,000,000 dead birds later, grain production plummeted and famine set in, causing the deaths of between 15 and 45 million people.
1968 - Billboard Bans
The Problem
Billboards cluttering up the scenic vistas of Vermont.
The Solution
Ban billboards on highways.
The Unintended Consequences
Businesses have to advertise. So they did. Instead of billboards they put up a 12 foot gorilla holding up a Volkswagen. A giant squirrel in a striped bathing suit, a 19 foot genie holding a carpet, a veritable plethora of concrete sculptures, all in the name of “Public Art.”
1972 - Tire Reefs
The Problem
Too many old tires piling up around Florida.
The Solution
Pitch them in the ocean as a headstart for marine life to build a new reef,
The Unintended Consequences
Tires are round and roll. They did exactly that and damaged the existing reef. Some scientists believe they are leaking biohazardous material into the habitat as well. The cleanup will cost billions and probably involve the military.
1975 - California mandates MPG in cars
The Problem
Cars are using too much fuel and causing too many emissions in California.
The Solution
Improve fuel economy by penalizing automakers for no meeting mandated fuel economy restrictions. The measure is called Corporate Average Fuel Economy (CAFE) and applies across all cars that a manufacturer sells. Notice, that doesn’t include trucks. The supposition is that trucks are used in farm work and commercial hauling.
The Unintended Consequences
Automakers responded by making cars bigger to meet the government's definition of a light truck. These trucks account for 80% of all new sales in the US. Trucks get worse mileage than cars, have longer stopping distances and worse handling making them inferior in every way, but every Karen HAS to have one and the US government is paying her to drive one of these abominations.
1978 - Ethanol Subsidies
The Problem
Fossil fuel use and the dependence on foreign oil.
The Solution
Produce Ethanol for corn, subsidize its production and mandate its use
The Unintended Consequences
- Soil erosion
- Deforestation
- Rising food prices (can’t eat it if you are making ethanol with it)
- Massive water requirements
- Pollution for fertilizer and pesticides
- Ethanol produces more greenhouse gases than gasoline
- Making one gallon of corn ethanol requires 1.29 gallons of gasoline
- $7 billion per year (in ‘78 dollars) price tag
1986 - Chemicals that Cause Cancer or Reproductive Toxicity
The Problem
California introduced proposition 86, stating “...persons doing business shall neither expose individuals to chemicals known to cause cancer or reproductive toxicity without first giving clear and reasonable warning.”
The Solution
In 1988 230 chemicals were identified, today there are over 900, including innocuous items like cocaine and wood dust. Wait, what?
The Unintended Consequences
With fines of up to $2500 per violation per day and greedy lawyers wanting their cut, business people came to the conclusion that EVERYTHING gets a warning label. This makes them invisible. Invisibility makes them useless.
1987 - Natural Gas Scratch and Sniff
The Problem
Citizens of Baltimore Maryland needed to be educated on what to look for and whom to contact when a gas leak was suspected.
The Solution
Send out post cards to every BG&E customer with a scratch and sniff that smelled like the gas additive that makes it smell like gas.
The Unintended Consequence
300,000 “gas leaks” were delivered all over Baltimore leading to thousands of false positive “gas leaks.”
1989 - Air Quality
The Problem
Air quality in Mexico City
The Solution
Prohibit 1 out of 5 cars from driving one day a week based on its license number
The Unintended Consequences
Citizens got around the ban by buying a second car. The second car was generally older and polluted more. Air quality decreased and emission increased after restrictions were imposed. In 2008 politicians expanded the failed program to include Saturday.
1990 - Luxury Tax
The Problem
A burgeoning US national debt of $2.4 trillion
The Solution
TAX THE RICH! Impose a 10% luxury tax on goods like yachts
The Unintended Consequences
Middle income people MAKE boats. The yacht market tanked by over 70% and hundreds of thousands of workers all over the world were furloughed. The net tax revenue decreased, completely defeating the purpose.
1992 - Loonie Ladies
The Problem
Nude dancing was decaying the moral fiber of Albertans and was degrading to women.
The Solution
Establish a one meter buffer zone between clients and dancers
The Unintended Consequences
Dollar bills don’t fly very well, so the dancers took a big pay cut. They started using Loonies, or Canadian dollar coins that pitched better. Consequently, they would do their thing while getting pelted with dollar coins. Degrading indeed.
1997 - Child Health Insurance
The Problem
Children’s health insurance was too expensive
The Solution
Legislation that requires health insurance companies that offer child only policies to accept all children regardless of pre-existing medical conditions.
The Unintended Consequences
This legislation increases the cost of health insurance and causes people to hold off getting insurance until they are sick. That causes the cost of health insurance to rise, inducing a death spiral of cost. Instead of committing economic seppuku, the companies that offered child-only health insurance stopped offering it all together.
This sounds a LOT like the Affordable Care Act (ACA) of 2010 and 13 years prior to it. Maybe the incredibly brilliant people in government should have learned this lesson and just NOT proposed the ACA in the first place.
2000 - Arizona Alternative Fuel
The Problem
Not enough alternative fuel is being used in Arizona.
The Solution
Generous tax credits to incentivize new vehicle buyers to add an alternative fuel tank.
The Unintended Consequences
The subsidy allowed consumers to buy fully loaded SUVs for about half off, as long as they were ‘converted’ to add a secondary 1 gallon alternative fuel tank. Most of these tanks never got used and cost the state hundreds of millions of dollars, and gas consumption actually increased in the state.
2002 - The Opium Trade
The Problem
In Afghanistan, farmers are growing opium poppies for the illegal drug market.
The Solution
Institute a $30 million program that pays farmer’s $700 per acre to destroy a poppy crop.
The Unintended Consequences
Poppy production exploded. Paying farmers to grow poppies is a sure way to get them to do it. Most farmers harvested the poppy pods before they destroyed the rest of the plant to comply with the program, getting paid twice for the same crop, as well.
2003 - Three in One Rule for Driving
The Problem
Jakarta, Indonesia has too much traffic
The Solution
Require that all automobiles have three people minimum
The Unintended Consequence
Professional passengers. People took children out of school to ride around with others who needed to go somewhere but needed to meet the Three in One Rule.
2005 - Greenhouse Gasses are Destroying the Planet
The Problem
Manufacturers are emitting greenhouse gasses causing climate change.
The Solution
The United Nations created an Intergovernmental Panel on Climate Change (IPCC) that mandated that polluting companies that get rid of carbon emissions are rewarded with credits that can later be turned into cash. The more harmful the gas, the more credits awarded.
The Unintended Consequences
Companies, mainly in India and China began producing the most egregious of these pollutants in order to destroy them and claim tens of millions of dollars in carbon credits. Some manufacturers made twice as much on the carbon credits as they did on actually selling the thing they manufactured. When the UN attempted to end this program, the Chinese blackmailed them by saying they would just release the pollutants into the atmosphere.
2005 - Blended Fuel Tax Credits
The Problem
People are overly reliant on fossil fuels and don’t use enough biofuels
The Solution
Pay people to use fuels blending fossil and biofuels
The Unintended Consequences
Paper mills were already using a biofuel called Black Liquor that was a byproduct of the paper making process. Instead of missing out on the tax credits, they started adding fossil fuels to the mix, exactly the opposite of the credit’s intent.
2008 - Dollar Coins
The Problem
People aren’t switching to the US Mint’s creation to save production costs: the dollar coin.
The Solution
Allow people to buy the dollar coin online at face value with no shipping.
The Unintended Consequence
People realized they could purchase coins on a credit card, pay off the balance with the coins received and pocket the rewards miles. One buyer purchased $800,000 in coins and then purchased lifetime elite status with his airline credit card miles on American Airlines.
2008 - Too Many Guns
The Problem
Oakland has too many guns
The Solution
Offer $250 to buy back every gun turned in to the police.
The Unintended Consequences
Turns out that not all guns are worth $250. People drove for hours and even from other states to sell worthless junk that couldn't be used for nefarious purposes. In fact, the first two checks were made out to gun dealers getting out from under bad trades. Further, since the guns were all in one place at one time people would walk the line purchasing guns worth more than $250 and turning a profit.
2009 - Cash for Clunkers
The Problem
Old cars pollute more and get worse gas mileage, and there is a recession. (and it was an election year and politicians do like to literally pay for votes)
The Solution
Offer a billion dollars for old cars and then pay to destroy them.
The Unintended Consequences
The original billion was gone inside a month. Congress approved an additional $2 billion. That too was gone inside a month. The average fuel economy went up by 0.65 miles per gallon, but that was more than offset by people driving their new cars and 800+ more millions of gallons of fuel was consumed, year over year in 2010. Further, while new car sales rose, the rise was more than offset by the following dip since everyone that was going to buy had bought. For every job created the government spent $1.4 million. Only two of the top ten cars bought were “domestic” brands. It turns out that destroying used cars causes the used car supply to shrink and the cost of the remaining used cars to spike. Speaking of the 2010 election, the Democrats lost the Governor’s seat in six states, six seats in the Senate and 63 seats in the house. Maybe people aren’t as dumb as they look, or Democrats think they are.
2010 - Traffic Light Energy Use
The Problem
Traffic lights in Japan use too much energy
The Solution
Replace all traffic lights with LED bulbs for longevity and lower energy use
The Unintended Consequence
The new bulbs didn’t create enough heat to melt snow and ice and were obscured, causing several hundred accidents. Workers had to be sent out with brooms to clear snow and ice off the lights. Same problems in Green Bay, St.Paul, and Newark.
2012 - Bird Nets
The Problem
Birds at the Texas Medical Center campus were pooping everywhere
The Solution
Put nets around the big oak trees to keep the birds out.
The Unintended Consequences
Birds eat bugs. (Remember Chairman Mao in 1958?) A venomous caterpillar Megalopyge Opercularis (we used to call them asps, probably incorrectly) started reproducing without checks with the birds gone. Contact with these caterpillars will cause intense radiating pain and can cause fever, vomiting, convulsions, paralysis and even death. The incidence of these caterpillars increased 7,300%.
2012 - Overreliance on Fossil Fuels
The Problem
Northern Ireland burned too much fossil fuel
The Solution
A subsidy for renewable sources of heating homes.
The Unintended Consequences
The subsidy was more than the fuel being used. The more wood pellets you burned the more profit you made. So everyone was installing wood burning stoves and heating everything from barns to airplane hangers. The executive branch of the government collapsed and wouldn't be replaced for nearly three full years.
2013 - Public Details About a Secret Installation
The Problem
The French discovered a Wikipedia article with details about a secret installation.
The Solution
Demand that wikipedia remove the page.
The Unintended Consequences
Wikipedia stated that the information came from an interview with a major who worked there so it was public domain. France threatened to imprison several high ranking wikipedia employees, so they took the page down with the note that it was illegal in France to post that page. A Swiss contributor reposted it and for weeks it was the most read page on French Wikipedia.
2013 - Plastic Waste
The Problem
Bottled water consumption at the University of Vermont is creating too much waste.
The Solution
Eliminate bottled water from vending machines, issue reusable water bottles for students and faculty and spend $100,000 to add filling stations around campus.
The Unintended Consequences
People forget their water bottles. Consequently, sales of sugary drinks rose 25%. Since those sugary drinks come in plastic bottles, per capita use of plastic bottles rose 6%.
2016 Social Laws
The Problem
States other than California were passing laws that San Francisco didn’t like, pertaining to LGBTQ+, Abortion and Voting laws
The Solution
Prohibit city contracts with any businesses headquartered in a state with these laws
The Unintended Consequences
Competition drives down prices. Without the competition from these non-desirable companies, prices for contracts rose by 20% and created additional bureaucratic costs, totaling half million dollars in staffing expenses alone. Further, it became increasingly difficult to do business with like minded companies in non-desirable states, so waivers were issued, further muddying the waters and raising costs. There were waivers for 60% of the states when the law was repealed.
2018 - Noisy Traffic
The Problem
Edmonton has overly noisy traffic
The Solution
Put up sound monitoring display boards that show your car’s noise level.
The Unintended Consequences
Edmonton motorists saw the signs as a challenge and made their cars as loud as possible and compared scores with the highest winning. Edmonton was forced to abandon the entire plan.
2019 - Tree Scam
The Problem
Mexico needs trees
The Solution
Give $3.4 Billion to farmers to plant and maintain trees on barren land.
The Unintended Consequences
The program didn’t include existing trees so farmers cut down mature trees to get paid to plant saplings. One study found that over 280 square miles were deforested.
2019 - Equal Pay
The Problem
The gender pay gap
The Solution
The Colorado Equal Pay for Equal Work Act that included all forms of compensation be disclosed on every job listing and a ban on asking candidates about their pay history.
The Unintended Consequences
Companies lose flexibility to hire who they want. Instead, they received increased regulatory and reporting burden and increased legal liability for not exactly following the letter of the law. Consequently, Samsung, IBM, PETA, Century 21, Nike and Cigna just quit hiring people in Colorado. Hard to break employment laws when you don’t employ people in that state.
2020 - Empty Jets
The Problem
Nobody is flying due to the pandemic and quarantine restrictions
The Solution
A sixty billion dollar bailout for the airlines stipulating a minimum level of service.
The Unintended Consequences
That means that airplanes were flying regardless of how full or empty or even if there were any passengers, Ghost flights.
2021 - Non-Organic
The Problem
Sri Lanka’s farms aren’t organic.
The Solution
Ban all pesticides and fertilizer, saving Sri Lanka $400,000 in subsidy costs
The Unintended Consequences
Turns out, pesticides and fertilizers actually work. Six months later Sri Lanka’s largest export, tea, was down 18% and rice production plummeted 20%, forcing them to import $450 million worth of rice. They spent $450 million to save $400,000. At this point they were sued by the farmers and were forced to pay out hundreds of millions in compensation to them.
2021 - Housing Costs
The Problem
Rent is expensive in St. Paul, Minnesota.
The Solution
Limit residential rent increases to 3% per year
The Unintended Consequences
The 3% did not account for inflation. The new controls also applied to new construction, limiting the supply of rentals and driving up the demand. New construction permits declined by 80% after the new law in St. Paul.
2021 - Grocery Store Workers
The Problem
Grocery store workers don’t get paid enough (or politicians need to look like they care or just buy votes)
The Solution
Mandate that the grocery store give ‘hero pay’ to their workers
The Unintended Consequences
A 28% pay raise was devastating to many grocery stores causing their closure. Hard to get hero pay when you don't have a paycheck. It is also hard to buy groceries when there aren’t any grocery stores.
2021 - Vaccine Distribution
The Problem
The vaccines against COVID19 were fragile and required refrigeration.
The Solution
In New York they created a massively detailed and untenable priority schedule, then mandate appointments on a questionable website with detailed questions and documentation uploads. This is particularly daunting to our most at risk, the elderly. First responders were deprioritized.
The Unintended Consequences
People died, this is a case of getting as much government as you pay for. Thanks New York.
2022 - Fire Arms Buy Back (Again)
The Problem
Too many guns on the streets of Utica, New York.
The Solution
Anonymous gun buyback, no questions asked and with a premium on “ghost guns” or those that have had serial numbers filed off.
The Unintended Consequence
One West Verginia man 3D printed over one hundred ‘guns’ and sold them to the city. Because none of his parts were registered, each got a $100 ‘ghost gun’ bonus. He was paid over $21,000 then drove the six hours back to his home.
2022 - Sesame Seeds
The Problem
Over a million Americans are allergic to sesame seeds.
The Solution
Add sesame seeds to the FDA’s Major Allergens List requiring restaurants and food manufacturers to disclose foods that contain or may have come in contact with the offending product.
The Unintended Consequences
Sesame seeds are small and difficult to account for and the fines are large, so instead of tracking them and possibly missing some, companies added them to the list of ingredients on everything, making the warnings useless.
Conclusions
These blunders seem to fall into a few categories
- Taxes
- Price Controls
- Environmental
- Social
We all know it is difficult to see the unintended consequences of our actions, but the preceding 46 examples prove that we can’t trust the government to do much of anything. We compiled this list to show that we can’t have the government running any kind of nationalized healthcare program. A nationalized healthcare program like Medicare For All, Beveridge or Bismarck would encompass all the categories we just proved that the government is bad at.
These were presented in a light hearted fashion, we all like to see the backfire that happens to important people, but this is a serious topic. You can't rely on the government to make big, sweeping changes. Here we detailed the unintended consequences, but it is more fundamental than that. We know that you can‘t do things by committee and the government is an aggregation of thousands of little committees, each with their own agenda. You end up with special interest soup from everyone with an axe to grind putting their little fingers in the pie. That was one big mixed metaphor.
We have, in previous articles, shown a way to save about half from the cost of healthcare. We designed and built an Electronic Medical Records System (EMR) that we provide to the practice or hospital free of charge. Since we are the insurance company, we can pick up procedures performed and documented in the EMR and pay for them in real time. For this service we charge $10 per month plus the actual cost of the risk, including stop loss. There is a small administrative fee to run the call center for help desk , coverage questions, password changes and the like. Overall this cuts half out of the cost of health insurance. This eliminates medical coding, insurance networks, adjudication, delays, denials, rate negotiation, sales/brokers/agents, the cost of a third party EMR, skyscrapers in every major city in the US, and the hundreds of thousands of employees that work at the insurance company that you, as the insured, pay for.
Even better, our plan includes a health and wellness program that has ‘teeth.’ The teeth are incentives to read our automatically prescribed patient education and then comply with it. You get a small discount for reading the education. You get a large discount for complying. You demonstrate compliance by actually following the advice and getting better. 84% of healthcare expenditures in the US are spent on chronic, behavior based disease. When we get the mortality due to this chronic disease to a more acceptable level, say, similar to the Europeans, we will save S1.27 trillion as evidenced in our article “Saving healthcare in America: Patient Education Will Reduce Costs by $1.27 Trillion,” or about 25% of the $4.9 Trillion spent on healthcare annually in the US.
Combine the 25% from the health and wellness program with the 50% direct savings from the EMR/Insurance combination and you get a 75% reduction in the cost of healthcare, making this plan about half the cost of the next least expensive plan in the world.
This works. We have it designed, built and delayed it and are ready to show it off and save the world. We have proven that you can’t rely on the government to solve this problem. Sure, my friend Dr. Howard A. Green, MD, will argue that the Bismarck plan in Germany is the way to go, and that is government run. However, Germany has an effective tax rate of 42% and the US is about 27%. Prof. Kurt Laus posits that soon half of Germans will be unable to afford cars. Ask Canada how a Medicare For All kind of system works, since it is bankrupting them. Ask the UK how a Beveridge style system works, it is bankrupting them. A free market system that relies on automation, not greed, like ours, is the only viable solution.
If you liked what you read contact us here, on our site, SentiaHealth.com, our parent company SentiaSystems.com, or send us an email to info@sentiasystems.com or info@sentiahealth.com.
