Rabbits, Gin, Mosquitoes & Yachts

In the mid-1800s thousands of European rabbits were introduced into Australia for the purposes of sport-hunting.  But rabbit populations expand exponentially, and soon the botanical composition of the areas where the rabbits were introduced was altered.  Because those rabbits grazed more closely than sheep and cows, their grazing resulted in weakened native perennial grasses.  This in turn caused significant soil erosion which radically affected agricultural yields making the impact of introducing those ‘innocuous’ rabbits disastrous to the Australian economy.

A few years after the Eighteenth Amendment was instituted (Prohibition), more people died of alcohol related deaths than had died when alcohol was legal.  There were several reasons for this; illegal alcohol provided an incentive to those who sold bootlegged liquor to make strong alcohol such as gin instead of beer or wine because strong alcohol is more profitable as well as being easier to distribute and conceal than beer or wine.  Ironically, many people were actually introduced to ‘hard liquor’ because of Prohibition.  At the same time, because bootlegged liquor was often made in bathtubs and other less-than-sanitary vats, it was often dangerous to drink and thousand of Americans died as a result of consuming contaminated alcohol.

In 1953 the World Health Organization (WHO) thought it had the perfect solution to the outbreak of malaria that was ravaging Borneo.  The WHO sprayed large amounts of DDT to kill the mosquitoes that carried the malaria.  As anticipated, the mosquitoes died and malaria declined; but soon the roofs of people’s houses began crashing down on their heads.  It seemed the DDT was also killing parasitic wasps that had previously controlled thatch-eating caterpillars.  Worse, the DDT-poisoned insects were eaten by geckos, which were eaten by cats.  When the cats began dying in great numbers the rat population burgeoned, and instead of malaria, people were threatened by epidemics of typhus and plague.

In the early 1990s Congress pushed through a luxury tax clearly focused on “the rich” who were buying expensive and lavish commodities—such as yachts.  But a funny thing happened on the way to the harbor—the rich stopped buying American-made boats (the tax didn’t apply to

foreign-made boats purchased outside the U.S.) and 10,000 middle-class American boat builders lost their jobs as the America boat industry cratered.

In the mid-1800s thousands of European rabbits were introduced into Australia for the purposes of sport-hunting.  But rabbit populations expand exponentially, and soon the botanical composition of the areas where the rabbits were introduced was altered.  Because those rabbits grazed more closely than sheep and cows, their grazing resulted in weakened native perennial grasses.  This in turn caused significant soil erosion which radically affected agricultural yields making the impact of introducing those ‘innocuous’ rabbits disastrous to the Australian economy.

A few years after the Eighteenth Amendment was instituted (Prohibition), more people died of alcohol related deaths than had died when alcohol was legal.  There were several reasons for this; illegal alcohol provided an incentive to those who sold bootlegged liquor to make strong alcohol such as gin instead of beer or wine because strong alcohol is more profitable as well as being easier to distribute and conceal than beer or wine.  Ironically, many people were actually introduced to ‘hard liquor’ because of Prohibition.  At the same time, because bootlegged liquor was often made in bathtubs and other less-than-sanitary vats, it was often dangerous to drink and thousand of Americans died as a result of consuming contaminated alcohol.

In 1953 the World Health Organization (WHO) thought it had the perfect solution to the outbreak of malaria that was ravaging Borneo.  The WHO sprayed large amounts of DDT to kill the mosquitoes that carried the malaria.  As anticipated, the mosquitoes died and malaria declined; but soon the roofs of people’s houses began crashing down on their heads.  It seemed the DDT was also killing parasitic wasps that had previously controlled thatch-eating caterpillars.  Worse, the DDT-poisoned insects were eaten by geckos, which were eaten by cats.  When the cats began dying in great numbers the rat population burgeoned, and instead of malaria, people were threatened by epidemics of typhus and plague.

 

In the early 1990s Congress pushed through a luxury tax clearly focused on “the rich” who were buying expensive and lavish commodities—such as yachts.  But a funny thing happened on the way to the harbor—the rich stopped buying American-made boats (the tax didn’t apply to foreign-made boats purchased outside the U.S.) and 10,000 middle-class American boat builders lost their jobs as the America boat industry cratered.

But in Seattle, the incentive actually created was for people to stuff their garbage bags even fuller thus creating problems for trash collectors.  In Germany, “trash-tax” avoiders flushed so much uneaten food down their toilets that the sewers became infested with rats.  In Ireland, a new garbage tax resulted in increased backyard trash burning and St. James Hospital in Dublin reported that the number of burn-patients admitted to the hospital for setting themselves on fire while burning trash, tripled.

What politicians never seem to grasp is that all governmental policies must be evaluated in terms of the incentives they create, rather than the goals they proclaim.  Economists and other social scientists understand this dynamic; unfortunately for us, politicians and their special interests simply ignore it. 

With Congress about to pass a pork-filled health care bill that few people understand (including the politicians who will vote for it) you can rest assured there will be hundreds and perhaps even thousands of unintended consequences. 

The Mayo Clinic in Glendale Arizona has already stopped taking Medicare patients due to meager government reimbursement and the pace of doctors opting out of the system will only pick up when $500 billion is slashed from Medicare funding as is planned by Congress.  The roughly 3,000 Medicare patients served by the Clinic will now either have to pay cash for medical services or find other doctors who still accept Medicare patients.  So get ready folks, this is only the beginning.

Quote of the Day: “If you think healthcare is expensive now, just wait until you see what it costs when it’s free.”—P.J. O’Rourke

 

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