Monday, January 1, 2007

The Law of Unintended Consequences

There are certain things in life we can call truisms. Here is one such truism:

With every action there's a reaction.

Here are a few that would fall into this category.

World War I, it's been said, was triggered by the assassination of Archduke Ferdinand in 1914. The devastation of WWI brought about the Treaty of Versailles, which in turn resulted in Germany being required to make war reparations to the Allies, which in turn, many believe, caused the German economy to falter and inadvertently led to the Second World War.

In the meantime, here in the United States, following World War I, the 1920's was a period of prosperity and partying known as the Roaring Twenties. The Roaring Twenties boom came to an abrupt end with the stock market crash of 1929 and resulted in the Great Depression.

Further exacerbating the Great Depression were such political solutions as the Smoot-Hawley Tarrifs--a political scheme that was meant to 'help' America's economy, but government meddling actually made the Depression worse.

Another Action/Reaction example would be the Great Steel Strike of 1959, which helped cause the demise of the American steel industry.

Today, we other examples of the Action/Reaction equation...

The so-called "dot-com bubble" of the late 1990s saw the meteoric rise of internet companies largely due to speculation, a new generation of nouveau riche, and the spectacular bursting of said bubble. Action: Speculation ... Reaction: ***POP***

Other examples Action/Reaction are just now beginning to be realized in rather interesting sorts of way.

Take, for example, the story out of Arizona. Arizona, like many other states in November elections decided to increase its minimum wage. In so doing, the AFL-CIO backers who pushed the minimum wage hike had no idea that thousands of disabled would be laid off as a result of their efforts. Yup! It's another example of the Law of Unintended Consequences.

Now, within the next few days, we'll be seeing a new Congress going to DC, armed with a whole host of legislative priorities.

Sadly, if these meddling politicos have their way, it seems that the history books will rife with the unintended consequences of their actions.

1 comment:

Anonymous said...

Your reference to Bernoulli's Principle is almost accurate - the premise stated is " For every action, there is an equal and opposite reaction!" It fits your blog perfectly for what you have explained, although you only touched on a small portion of government intervention and devastation from their meddling in things they only think they know about. Politicians only function in life is to make the world the way special interest wants them to - no matter the cost to the nation or the economy!