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Just say no to unintended consequences
Posted By Russ Roberts On August 19, 2009 @ 10:54 am In Intervention,Man of System | Comments Disabled
One of the unintended consequences of the cash for clunkers program is that it is hurting charities. As USA Today reports :
Charities across the country are concerned that the popular “cash-for-clunkers” program will entice people to junk old cars for credit toward new ones rather than donate them.
“We know there’s going to be a significant impact,” says Chad Iseman, director of the Kidney Cars program for the National Kidney Foundation. Iseman says the foundation gets about 19% of its annual revenue from selling donated cars. The charity said it estimates a 10% to 15% decline because of the federal rebates.
But I love this quote from the White House:
White House spokeswoman Jen Psaki says the program, which got a $2 billion boost Friday, will have a “negligible” effect on charities. Psaki says the Car Allowance Rebate System (CARS) was created to provide a “timely, temporary and targeted” economic stimulus and was not intended to divert vehicles from charities.
What she seems to be saying is that because CARS wan”t intended to affect charities, the effect has to be negligible. So unintended consequences don’t exist. Beautiful. It is always good to remember your Hayek:
The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.
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