Whenever governments interfere in the basic operation of markets, trying to “help” in some way, pretty soon an unintended effect emerges, and government must step in, again, to correct for that. And that second, corrective intervention then causes another problem, requiring yet another intervention. And so on.
This process of intervention-upon-intervention was detailed by economist Ludwig von Mises, and explained with elaborate reasoning. Since Mises’ day, the history of economic interventionism is littered with examples that reinforce Mises’ point.
Take bedbugs.
In 2008, I noted that bedbug infestations were on the rise. And that Congress was working to combat the problem with a special program.
I suggested that Congress should stay out of it.
What I didn’t know was that the Environmental Protection Agency (EPA) was hard at work … in effect defending bedbugs. The EPA regulates pesticides. The cheapest and most effective anti-bedbug pesticide had come up for re-registration for home use. But the company that makes it decided not to re-register. The cumbersome, bureaucratic re-testing process cost too much, taking away the company’s incentive to sell the chemical.
So now in Ohio — an apparently bedbug-conscious state — the State Senate is petitioning the EPA to get a special exemption for this one product. No word from the EPA yet.
So, if a bedbug infestation breaks out big time, don’t blame Congress for not spending enough. Blame the EPA. Or blame the body responsible for the EPA. Yup, Congress.
This is Common Sense. I’m Paul Jacob.