The idea is simple and innocent enough on its face: (1) identify something "bad", (2) promote "change", (3) it becomes "worse" and (4) the politician charges in as saviour.Congressman John Doe wants to unionize auto wash employees. He says publicly that it is because they are routinely subjected to harsh treatment by their employers, forced to work long hours and paid a wage too low to allow them to earn a living. Behind closed doors of course he admits that this would be a great way to get personal name recognition in his State. Moreover, as unions cast their lot with his political party, this would be a great way to increase his party’s chances of electoral success, obtain lobbying funds from said unions and local activists and solidify his support among Hispanics who make up the vast majority of auto wash employees in his state.
So he begins with a spirited PR campaign on the issue. He has many close associates and supporters in the media so getting them to run his Press Releases nearly verbatim is no problem. They even do a series of “special reports” extolling the woeful working and living conditions of the employees. Eventually it reaches the point where he and his media accomplices brand it a “crisis” and as we all know, a ‘crisis” demands the strong hand of government.
Once the public perception of the situation has been sufficiently tailored, he and his colleagues conspire with community activists to organize unions among the employees. But there’s a problem. This is such a easy job that any employer can easily locate people willing to perform the work at the rate he is willing to pay and his customers are willing to bear. The answer then is a new law that punishes any employer who seeks to avoid the added costs associated with union demands.
Within months the employer’s cost for a basic wash goes from $3 to $10. The natural economic result of course is that the employer passes the additional costs on to his customers by increasing his price from $7 to $15. While some consumers begrudgingly pay the higher fees for the service others, including those who supported the idea of unionization, choose to forgo the use of commercial services and instead wash their vehicles at home. Naturally the owner wants to attract customers back so he offers a few value-added services to entice people to use the service which is now double the price one year earlier. With dwindling customer support owners begin closing their shops. Normally they would begin by increasing prices but that’s the cause of the current problem. The other option would be cutting the workforce but the union contract makes this impossible.
When Congressman Doe and the local activists witness the negative consequences of unionization they conclude that the employers and consumers are acting on “greed.” The only way to force consumers back into the commercial auto wash services is to make it illegal to wash their vehicles at home. In come crony capitalism and the Baptist-bootleggers.
The owners have a dilemma. Many of them actually support the political party of Congressman Doe and those who do not understand that the political atmosphere is such that having the policy reversed is highly unlikely. So they form a trade union of auto wash owners Crony Capitalists United (CCU).
With the help of Congressman Doe and his colleagues CCU joins hands with environmental activists to work out the specifics of their plan. The idea is to launch a campaign using environmental groups for cover (the “Baptists”). The programme is of course largely financed by CCU (the “bootleggers”). Aided by their friends in the media, they focus on the strain home auto washing places on local water resources. Then they turn the public’s attention to the run-off which goes into local drainage systems. Surely this affects beaches and shoreline ecosystems. They even finance a few “scientific” studies on the matter, all with the same result of course. Eventually the public is convinced that this is a “crisis” and as we all know, a ‘crisis” demands the strong hand of government.
A year later we have a new law/regulation that makes it illegal to wash your vehicle at home. Now that the public is forced to use a specific commercial service, the consumer price of that service increases yet again. Not only because of the increase in government-manufactured demand, but also because members of the CCU are now comfortably protected from a decline in business. To get around the threat of increased competition, they join with government regulators to make entry into the business cost-prohibitive using a combination of license fees, permits, bonding, insurance, CCU enrolment fees and mandatory unionized labour force, to name a few. Furthermore, members of CCU adopt a price floor to prevent any one member from reducing his price so as to achieve a competitive advantage.
In the end, Congressman Doe and his colleagues get money from lobbyists on all sides each seeking to either increase their privileges or avoid harmful laws and regulations. The CCU enjoys the benefits of higher profits and legal protection. Environmental organizations enjoy yet another legislative/regulatory victory. The employees of the union enjoy higher wages, better benefits and not threat of job loss. In fact, the only group that suffers here is the consumer (aka, common man).
This is how a single well or ill-intended idea naturally evolves into a series of public policy disasters for the common man.
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