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Making Policy the Wrong Way

August 13, 2013 by Ike Brannon

I’m writing this week’s post from my hometown of Mossville, Illinois, where we refer to Peoria as “the big city” in a non-ironic way. The big news this trip is that Mossville has fixed the traffic lights on the way to town.

The problem with the lights had its origin in a tragic auto accident. The road from Mossville to Peoria has seven or eight traffic lights, entry points for various subdivisions on the way to town. About a decade ago a drunk driver collided with a mother waiting at one of these lights to enter the main road, killing her. 

People were saddened and outraged by this senseless accident and asked whether “Something Could Be Done.” The answer from the county’s transportation department was “Yes.” In response, the city shortened the time for the lights to change when a car arrives to the intersection from 30 seconds to 8 seconds, a short enough time to have prevented the accident. Problem solved. 

While the change solved one problem, another one developed: Getting into Peoria now took much longer, with the heavy traffic on the four-lane road lurching from intersection to intersection in a vain attempt to avoid red lights. Eventually, someone realized that the change created more dangerous driving conditions than before, and traffic engineers quietly changed the time back to 30 seconds during the day. We can now make it into The Big City and sit down to dinner at the Ponderosa a good three or four minutes faster than before without feeling compelled to race to each stoplight.

I’m regaling you, the reader, with what suffices for news in my hometown to demonstrate that policy by anecdote can often result in an inadvertent  and inferior  outcome. There’s a lot of that going around: a tragedy happens, people demand that politicians do something, and a legislator introduces a bill designed to prevent such a thing from ever occurring again, which passes unanimously. The “success” of such bills leads people to ask why politicians can’t solve the big problems the same way. 

The short answer is that the big problems — like reforming entitlements — are much more complicated than preventing drunk drivers from hitting young mothers stopped at red lights or finding abducted children. But a more complete explanation is that facile legislative or regulatory responses often accomplish little or nothing. The number of extant policy problems that can be solved in a way that no one is made worse off is approximately zero, and when there are winners or losers, fights usually ensue. 

When it comes to a large, seemingly intractable problem like our long-term-entitlement shortfall, reasonable people in both parties recognize that Social Security is broken. While they may seem to be far apart in their proposed solutions, both parties know who will be made worse off by any reform: upper-income taxpayers. How we make them worse off — by reducing their promised benefits or increasing their Social Security taxes — is the sticking point. And this dispute may be unbridgeable until a real crisis forces Congress to act. For an example of what such a crisis may entail, watch the movie Americathon. And if we wait for a crisis to act, don’t count on Congress reaching the most sensible outcome — the emotions of the day may preclude it, just as it did with our traffic lights in Mossville.


Author

Ike Brannon
Ike Brannon

Ike Brannon served as an Economic Growth Fellow of the George W. Bush Institute from 2012 to 2015. He has a Ph.D. in economics from Indiana University and a B.A. in math, Spanish, and economics from Augustana College. View his full bio

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