Thursday, June 12, 2008

Unintended consequences

Too often, legislative action ends up causing more problems, rather than providing a solution. Take for instance this example, highlighted by Jack Schultz, at BoomtownUSA, and the recent passage by Congress, of the new farm bill.

The Law of Unintended Consequences continues to amaze me. Governments pass laws thinking that they are doing something to help those most in need and often exactly the opposite occurs. I’ve seen it happen over and over and think that there should be a committee set up at every governmental body to study what happens in the long term with governmental action.

This past month the U. S. Congress passed a new farm bill. In most of the Congressional press releases on the bill I read that the bill would help to “keep the family farmer going and provide a boost to young farmers.” Of course if you’d read those same press releases 20 or 30 years ago they would have said the same thing. How have we done over the past 30 years?

Every five years Iowa State University does a survey of Iowa Farmland Ownership which looks at who owns that state’s farmland. They just came out with their new study and to me the results are alarming.

Twenty five years ago, in 1982, about 11% of Iowa farmland was owned by those under 35 years of age. Today it is only 2%. During the same time, those over the age of 65 have grown their ownership from 27% to 55%!

Congress has caused some major disruptions in rural America by incentivizing farmers in the wrong ways. Our small towns all across the country have suffered as a result. It is too bad that they don’t learn from their past mistakes and the Law of Unintended Consequences, leaving the market to sort out the winners and losers. America and especially rural America would be much better, if they did.

(From BoomtownUSA)

Just like Congress did with the farm bill, I'm concerned that the recent spike in gasoline, and oil, will prompt our legislative bodies, at both the state and local levels to act too quickly, or out of political motivation, rather than taking the long view.

I hope that isn't the case.

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