Gullible's Travels—Next Stop: Stage One

by Madeline Peltzer, Age 13
Submitting Teacher: Dawn Peltzer

"Nothing weighs lighter than an empty promise," a German proverb states. Political candidates often make promises to attract a specific voting block. However, making pledges and passing bills can be easier than delivering the promised results. A responsible electorate must consider the potential consequences of good intentions.

In his book, Applied Economics: Thinking Beyond Stage One, economist Thomas Sowell warns his readers against making choices that pacify immediate desires. Rather, he advises studying the unintended side effects that may occur down the road.

Politicians engaging in stage-one thinking have a rhetorical advantage since their rosy slogans and feel-good proposals fit nicely into sound bites and headlines. Their problem will be in fulfilling their idealistic aspirations once the laws are passed.

In John Stossel's, "Politicians' Top 10 Promises Gone Wrong," we see classic examples of stage-one thinking. Whether it is subsidies for ethanol production or initiatives such as Cash for Clunkers, the ideas behind such programs tend to be simplistic and appeal to the here-and-now. They create unintended consequences and ultimately fall short of their expectations. Such is the case with the Lilly Ledbetter Fair Pay Act of 2009.

In his 2012 State of the Union address, President Obama stated, "You see, an economy built to last is one where we encourage the talent and ingenuity of every person in this country. That means women should earn equal pay for equal work."

The President inserted the non sequitur "equal pay for equal work" to remind his female supporters of the first bill he signed into law, the Lilly Ledbetter Fair Pay Act. This was a promise he had made during his 2008 presidential campaign and fulfilled shortly after he took office. The law expands the time frame for employees to sue their employers regarding wage discrimination, and it was supposed to improve the pay inequities for working women in America.

The Heritage Foundation's Andrew Grossman speculated that The Ledbetter Act would lead to a myriad of unintended consequences. "Foremost," he said, "it would push down both wages and employment, as businesses change their operations to avoid lawsuits. Perversely, it could actually put women, minorities, and workers who are vocal about their rights at a disadvantage if employers attempt to reduce legal risk by hiring fewer individuals likely to file suit against them or terminating those already in their employ."

Grossman's prediction is supported, in part, by U.S. Census Bureau data analyzed by the National Committee on Pay Equity. In 2008, women were earning 77.1% cents of every dollar earned by men. The following year it dropped to 77%, and it ticked up to 77.4% by 2010. The difference was .3% over two years; virtually no change. The Ledbetter Act failed to deliver on Mr. Obama's promise of being a, "big step toward making sure every worker in this country, man or woman, receives equal pay for equal work." In spite of these results, Mr. Obama is still recycling this notion.

In each of his "Politicians' Top 10 Promises Gone Wrong" examples, Stossel points to the failure of leaders to thoroughly think through the consequences and outcomes of their utopian ideas. As long as Americans fail to hold their elected officials accountable and are willingly seduced by what their itching ears want to hear, they will continue to suffer from the unintended costs and fallout of stage-one thinking.

Sowell neatly describes the political environment in a 2004 interview. "I remember I was giving a talk someplace," he said, "and there was a question-and-answer period. A lady said, 'What's your solution?' I said, 'There are no solutions. There are only trade-offs.' She said, 'The people demand solutions!' In that atmosphere, politicians will supply them. They may not work; they may make things a lot worse than they were before. But by the time the consequences must be paid, it will be too late."