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Home » Unintended Consequences…
The McNeeley View

Unintended Consequences…

‘The Price We Pay’

May 7, 2021
Don McNeeley
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“Clearly there are always unintended consequences of any legislative or regulatory act that's taken in the heat of battle.” — Richard Grasso

This column may just as easily be titled: “The Cost of Leadership Incompetency.” For those of you who are regular readers of my column you have noted my passion for leadership, which at its core requires one to have a vision for the future along with the skill to strategically navigate such. There is a great “gut check” in Proverbs, which says, “Where there is no vision the people will perish.” What legitimate leader wants followers, who place their fate in your stewardship, to perish on your watch? Too much leadership today focuses exclusively on the “here and now,” and too many leaders push the oh so popular hot button of the day … the “cause de jure” if you will. I contend that’s not leadership.  

Fundamental to effective leadership is anticipating the unintended consequences of your decisions and subsequent actions. After all, did we not all learn, even in kindergarten, that actions have consequences? Yet today, either stupidity prevails at epidemic levels, or a hidden agenda exists, as the unintended is not even on the radar of the decision-makers. It has been said, “Unintended consequences come about when the implementation of a worthwhile idea is insufficiently rehearsed.” Just think, before we encourage people to come to America, might we need a premeditated plan to humanely process the masses who respond to your ever so popular invitation. My issue is not poor politics as much as poor leadership. Previously, I wrote about California’s Proposition “C” and specifically the city of San Francisco enacting a surtax from 0.175–0.69 percent on businesses with over $50MM in revenue. This tax was to be used exclusively to fund San Francisco’s sanctuary city status. This survived opposition challenges and generates between $200MM-$300MM per annum in new tax revenues. My, not so profound, prediction was that this action would result in: a) fewer business startups and b) more homeless. Here we are just three years into this new progressive game plan, and the homeless community has taken over the streets. Those streets are now flush with discarded hypodermic needles and human feces. I am not suggesting we abandon those of the homeless who are legitimately in need, but is this the best approach? Could not the supporters of the bill/tax have easily anticipated this result? Could leadership simply consider the importance of tourism to San Francisco’s GDP and understand this new policy will adversely affect such. 

Presently, similar shortsighted policies are sure to affect the PVF industry. Currently, all of us have jobs open, all of us have a need for more talent, all of us have jobs paying way in excess of minimum wages, and all of our industry jobs come with health care, pension, relevancy, and in many cases tuition support. Yet jobs remain open. Why you ask?

We have $5 trillion in COVID support funding to date for after all who would not vote in favor of COVID relief as to oppose such would be political suicide. Yet look beyond the headlines and see how small of a percent of the funding actually goes to the cause that’s in the very title of the bill. In the most recent $1.9 trillion stimulus bill, better known as the American Rescue Plan 2021, $600 billion was directly COVID related but the remaining $1.3 trillion, if related at all was so only remotely. The bills were flush with pork with politician after politician adding their own agendas along the bill’s journey. 

Now let me connect the dots, and for efficiency, I will spare you the details but encourage you to invest 40 minutes to view a webinar that The Wholesaler Editor Ruth Mitchell and I just concluded. It’s available on their website and will give more details, which the constraints of this column will not allow. So I offer here the Cliff Notes version (BTW is that now a historic reference? Let me check my Rolodex). If an unemployed couple with two children under the age of six were to maximize all the current support programs it would approximate, again if maximized, $80,000 a year tax-free! Economists calculating the gross-up have determined that those benefits, again if maximized, are the equivalent of a $135,000 per year job. In our industry, which perhaps pays $70,000 how do we compete with…get this…how do we now compete with unemployment! Further frustrating is that it is our very own tax dollars funding this. In other words, we are funding our very own non-competitiveness. Our GDP is now an impressive $21.4 trillion, rendering us the biggest economic power in the Galactica, however, aggregate government debt of $28 trillion or 130% of GDP is a burden future generations and we employers will bear. When did we, the job creators, become public enemy No. 1? When was it that we lost our voice in policy creation? Who will employ the masses when we don’t? 

“Every government intervention [in the market place] creates unintended consequences, which lead to calls for further government intervention.” — Ludwig Von Mises

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Don McNeeley

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