Automobile regulation that improves fuel efficiency raises the price of new cars. That in turn raises the price of used cars, as some buyers avoid higher new car costs by buying used ones. This unsurprisingly reduces the number of used cars that get scrapped. And since used cars have worse gas mileage than new ones, this unintended longer used car lifespan negates about 18% of expected gasoline savings.
Tag Archives: Unintended Consequences
Hold the Healthcare
24 million workers work 30 hours/week or less. For the purpose of Obamacare, these are part-timers and need not receive employer provide healthcare. Another 10 million workers work between 30 and 35 hours/week. If employers can hold those 10 million workers down to less than 30 hours a week, fully 25% of the labor force won’t qualify for employer provided health insurance. How does working fewer hours help the poor?
Electric Extortion
A Maryland Public Service Commission law designed to promote energy conservation is being redesigned. The law originally allowed public utilities to charge rate-payers a surcharge whenever electricity use fell short. The unintended consequence, utilities had less incentive to quickly restore power after storms. Imagine that! Now, the MPSC will only allow the surcharge for 24 hours after a storm. If utilities want weather insurance, they should buy it.
Swiped Away
Due to Dodd-Frank, the Fed capped fees merchants pay credit card companies (CCCs) on debit cards (DCs) to about 21 cents from about 44 cents. When the fee was 44 cents, CCCs often reduced DC fees on small transactions; less than $5 or $10. Because the fee was lowered, CCCs now want the full 21 cents even on small sales and stores are raising prices to compensate. Did you anticipate this?