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Paper Companies' Windfall of Unintended Consequences
Jamie found a post on ScienceBlogs that serves as a stark example of the law of unintended consequences, as well as the ability of private industry to game a system of laws to their advantage. It seems that large paper companies stand to reap as much as $8 billion this year by doing the opposite of what an alternative-fuel bill intended. Here is the article from The Nation with more details and a mild reaction from a Congressional staffer. "[T]he United States government stands to pay out as much as $8 billion this year to the ten largest paper companies.... even though the money comes from a transportation bill whose manifest intent was to reduce dependence on fossil fuel, paper mills are adding diesel fuel to a process that requires none in order to qualify for the tax credit. In other words, we are paying the industry — handsomely — to use more fossil fuel. 'Which is,' as a Goldman Sachs report archly noted, the 'opposite of what lawmakers likely had in mind when the tax credit was established.'"
Precisely. We live in a society where 'corporate selection' fosters public companies who mindlessly take the action which most increases value for their shareholders. If a law is written such that it can be gamed - it will be.
Lawmakers should take that into account and legislate around it; cause they sure ain't gonna change Corporate American Culture any time soon.
This is another example where the intention of the law doesn't mean anything, what is actually written and what that can be stretched to mean does.
If a law is supposed to have a specific intention, then it should be written just for that.
If I have nothing to hide, don't search me
we create laws specifically to prevent that.
The only thing this law has prevented is papermills from using alternative fuels.
Are you saying you want a type of anarchy
The parent said nothing about anarchy. No need to erect strawmen.
I think copious legislation should be applied
Your "copious" legislation has already been applied. It is demonstrably counterproductive.
"I assumed blithely that there were no elves out there in the darkness"
Unless something really needs regulating, leave it the hell alone. Food? Fine we need an FDA to make sure our food isn't nasty and contaminated. They probably overstep their usefulness in some cases, and under step it in others, but that's expected.
Unfortunately, industry will stick their noses in when regulations are being written. Wonder why the FDA doesn't have many warning about the mercury in Tuna whereas private consumer groups do?
Let's just say, legally this would be considered hearsay, but it was said that the Tuna industry was literally looking over the FDA'a shoulder when those regs were written.
So, even then, Government is too easily corrupted. Unfortunately, I don't have a better idea.
This has nothing to do with central planning, this is clearly a case of abusing the law for gain.
The two are NOT the same.
Nor does is it evidence of your implied counterpoint that in a decentralized economy stupid economic or environmental decisions would not get made, they certainly would.
There's a reason why we have laws in the first place, some days I wonder if anyone certain people on slashdot has read the history of corporate America and the things they used to get away with in a more decentralized economy because there was no authority whatsoever.
Except in our case, the cost of getting the car would exceed the benefit of getting the credit.
What the paper companies have is a benefit of the credit outweighing the initial cost to pull it off.
Alas, we live in a nation where rule of law is paramount.
The letter of the law is what the law is, not the "intent" of the law.
Which means it would be illegal to withhold payments specified by law, and any lawsuit challenging such an act would likely succeed, with penalties.
In other words, you're stuck with the law as written until someone changes it. The government trying to game the law by not obeying it is, if anything, worse than some corporation gaming it by taking advantage of something not foreseen by the lawmakers.
After all, if the government can choose to not obey this law that you dislike, what's to prevent them from disobeying a law you like?
"I do not agree with what you say, but I will defend to the death your right to say it"
If the paper companies sue, they would get laughed at or scolded by the judges as this is an obvious and evil perversion of the intent of the law.
Quite possibly it was written with exactly that intent. We've been often reminded by nearly everyone studying Congress that most proposed laws aren't written by the legislators at all; they're usually written by "consultants" who are part of the lobbying setup and are paid by the corporations interested in the laws. It has come out repeatedly that most members of Congress haven't even read the laws that they vote on. They usually have only read the summaries, which are written for public PR.
So it's quite likely that whoever worked out the exact wording of the law was in the pay of one or more companies who wanted exactly what the story is about. They probably discussed it behind the scenes, until they were fairly sure that the wording would allow their employers to take advantage of the law in this fashion.
It's how things are done. And it's hardly any secret. It's been written about more times than we can probably count.
(Actually, none of this precludes the possibility of a Congressman understanding the issue. The point is that usually they don't bother themselves over such details. That's for their underlings to handle.)
Those who do study history are doomed to stand helplessly by while everyone else repeats it.