‘Meaning well is no substitute for doing well’

Daniel J. Flynn pens that line near the end of his latest column posted at Human Events. Flynn highlights several examples of the unintended consequences associated with government efforts to “do something” about a perceived problem.

The average price of a gallon of gasoline reached $3.76 yesterday. “The best thing we could do is to resolve that situation,” Federal Reserve Secretary Ben Bernanke told Congress of the Iranian crisis on Wednesday. “But that’s beyond my capacity or, probably, anyone’s capacity.”

But the expense of oil is not beyond his capacity. In fact, doubling gas tabs under President Barack Obama has far less to do with Mahmud Ahmadinejad than with Ben Bernanke. Priming the pump propels prices at the pump.

Exorbitant charges for gasoline are a function of supply and demand. But high prices involve the supply and demand of what you give the service station attendant and not just the supply and demand of what the attendant puts in your car.

The Federal Reserve has dramatically increased the monetary base since 2008’s financial crisis. Creating money enables the government to afford its operations. It impedes Americans from being able to afford gasoline. Cheap money means expensive fuel—and meat, and clothes, and gold.

Ben Bernanke didn’t seek to inflate fuel bills. But he did. This is the law of unintended consequences. Government actors seek to solve one problem not realizing that they may be creating a dozen other problems in doing so. But as Bernanke’s blunder shows, unwanted side-effects aren’t always unforeseeable.

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