Stories At The Margin
columnist: Christopher Espinal

Topic: Economics
Politics Guided by Emotions

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by Christopher Espinal
(Conservative)
Friday, May 9, 2008

My favorite part of fourth grade was learning about the process of birth and the beginning of life. As a side activity in biology class, we watched a portion of twenty chicken eggs successfully hatch into new born chicks.

I love animals and admired the beauty of birds. Chickens aren't as exciting as African Grey's but it was still special to watch one begin it's life experience.

The most memorable part was observing the chickadees that weren't healthy enough try to hatch through. We were told by our teacher that some just wouldn't make it. We weren't allowed to help the poor chickadees because if they couldn't hatch through it indicated they weren't fit to survive the outside world.

God knows that I wanted to help them hatch through. I sat through class thinking about how to help the animals get passed the first stage of their lives.

What if I grabbed a tool to help the chickadees break through despite their unhealthy state? They probably would have suffered far more than if they were left to die in their shell. The social cost for the former far exceeds that of the latter.

These aren't costs that we recognize on impulse or automatically. That, however, can be a serious issue.

Politicians are subject to the same feelings like the one I just described. There is almost a sense of obligation to help those in need. We all want to help people improve their health and wellness because of positive externalities on society and for that warm feeling we get when "giving."

However, there are plenty of instances where politicians make seemingly helpful policies. The first one is raising taxes for government programs - a form of reallocating resources from the wealthy to the poor.

When the marginal cost of raising an additional dollar increases, there will be less of an incentive to raise additional dollars. If the rich who own businesses and create jobs with their investments decide to stop expanding because of exhorbitant tax burdens, that will also affect current and potential employees who work under the bourgeiosie. Thus, in general, everyone is less well off with huge tax burdens on the rich.

Besides raising taxes, there is another scenario that I find to be more disturbing. Government officials also find it necessary to push people out of the private market. Politicians create huge start-up burdens for those aspiring to be entreprenuers. They add licensure procedures and other fees just to start up a business. Not only will this limit the private market to those who already have the resources, but it will keep out those who can't bear the high costs on their time and money to initiate business activity. As a result: less social mobility, less businesses, less competition, higher price level on everyone, less economic growth than potential outcomes. When an economy inefficiently utilizes it's resources, it shows there's a potential for more efficiency and growth.

These implicit costs affect everyone. Politicians tend to ignore the unintended consequences and aim to politically destroy those who oppose these policies.

All of this happens in the name of helping those in need. Ironically, it makes the situation worse for the disadvantaged in the long run.

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2008 Christopher Espinal, all rights reserved.
Published: Friday, May 9, 2008
Last modified: Friday, May 9, 2008

The views expressed in this article are those of Christopher Espinal only and do not represent the views of Nolan Chart, LLC or its affiliates. Christopher Espinal is solely responsible for the contents of this article and is not an employee or otherwise affiliated with Nolan Chart, LLC in his/her role as a columnist.

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