Nearly 20 years ago the brilliant Thomas Sowell — author, economist, political commentator, and social theorist — released a book titled, “Applied Economics: Thinking Beyond Stage One.” This applies to the immediate reaction to some idea to improve a situation, leading to action being taken without first asking, “and then, what will happen?” And then asking that question after each proposed next step.
Sowell gives an example: A state government decides it will help the state to raise taxes on businesses. The immediate result is more revenue for the state. And that is good, the government says. However, over the course of time, those affected businesses might move bits and pieces of their companies to another state, or new businesses may choose another state to place a new factory or operation.
Over the course of time, the state will lose revenue because businesses will go to other states to avoid the higher taxes.
Had the state government indulged in thinking about what might happen after it raised taxes on business, they might have been able to foresee these very negative consequences. Higher taxes discourage business, therefore while in the short-term revenues will be larger, in the longer term, companies will see that doing business in the state will be more difficult, and some, maybe many, will leave. The state then suffers a loss of tax income, and lost jobs.
Finding examples of how this has worked is not difficult. Such examples are often the result of decisions made on emotion, because they seem to be great ideas to achieve desirable ends, and they feel good. The reality is usually very different.
Here is one example. The question being asked is, “How can we stop the mistreatment of civilians by police?” Well, if police departments have less money to operate on, they will have to do things differently, and the changes will benefit the public, as fewer officers will make fewer horrible mistakes against the public.
We can use social workers to respond to some calls, instead of armed officers. We can tell officers not to arrest people for minor crimes, lessening the number of police/public interactions, and lowering the number of people in jails and those having court proceedings.
Today, we see quite plainly how these efforts have failed. This solution has resulted in police officers quitting and retiring in large numbers. Finding new recruits is difficult, as potential recruits see what has happened, and want no part of a situation that makes them targets.
Prosecutors do not prosecute all crimes anymore, and many persons charged with a crime are released without even paying a bond. These people are not discouraged or prevented from committing more crimes. Meanwhile, crime is doing well, rising to historic highs in some states and cities.
Another example is that the climate activists tell us that we have got to stop burning fossil fuels and reduce CO2 emissions. One thing we can do, they say, is to stop or substantially slow the production of coal, oil and natural gas in the United States. President Joe Biden, not the sharpest tool in the shed, did this on his first days in office.
The result was that America’s recently regained position as energy independent and a net exporter of energy came to an end. And now we have to purchase some energy that had been coming from domestic sources from foreign countries, raising the cost of gasoline and other fuels, and helping a foreign country’s economy. The oil we buy from some of them is dirtier than our oil.
Also, other countries that could be purchasing energy from us, and helping our economy, are instead buying Russian energy, which helps Russia’s economy, and that helps it fight its unprovoked war against Ukraine.
These results could fairly easily have been predicted with a bit of intelligent thought. And, in fact, these results were predicted by those who went beyond stage one and saw where these rash decisions would take us. Too bad Biden and his advisors did not consider the possible results of their plan. Or maybe they just don’t care.
So much of what the political left does or wants to do to “make America better” sounds good, or looks good on paper. But in reality, they often want to undo elements of our country that have worked well for more than 200 years, and the proposed solutions themselves cause problems that are often as bad or worse than the situation they sought to improve.
They don’t seem to understand that making changes to systems that have been in effect for a long time, and are deeply integrated in our way of life, need to be done thoughtfully, and that most of them must gradually evolve to replace existing systems, and not be implemented too quickly, causing chaos.
This is particularly true with climate matters. Clean energy sources like wind and solar power have not evolved nearly enough to take the place of fossil fuels. That will take many years. In fact, the reality is that we may never be able to not rely to some degree on fossil fuels.
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