Deregulation and the Law of Unintended Consequences

Photograph Source: USDA Rural Development – Public Domain

Montanans have already had a very brutal lesson in deregulation and its unintended consequences. The great idea of the Legislature in the late ’90s was to deregulate our utilities under the “free market” theory that competition would lead to lower prices. HAHAHA! We went from the lowest cost power in the region to the highest — and the rip-off continues to this day, decades later.

Comes now Governor Gianforte’s ongoing effort to “reduce red tape” — which is simply deregulation of industry under another name. Moreover, they have pulled the wool over the eyes of the populace by saying the goal is to create more “affordable housing.”

Nothing could be further from the truth. What the goal is, and has always been, is to create maximum quick profits for developers by reducing the regulations that, in both the short and long run, have been put in place as necessary protections of our citizens and environment. In a nutshell, that’s why we have regulations — because the activities of one or more people should not negatively impact nor endanger the lives or belongings of others.

In this case, the “affordable housing” ruse provides a very humanistic face to the general public. Yes, housing costs in Montana have skyrocketed. But that’s in large part due to wealthy in-migrants who sell their homes somewhere else for very high prices, move to Montana and can still toss hundreds of thousands in the bank.

And then there’s the “investor class” that buys, rents, and flips homes for quick and often very considerable profits. Their interest is not in providing affordable housing, it’s to make money as quickly as possible in the hot real estate market Montana is currently experiencing.

Many years ago, during another Republican-dominated legislative session, a long-time Republican friend rendered some great wisdom. “Don’t expect Republicans to care about poor people — they don’t. They think if you’re poor it’s because you don’t want to work.”

The topic in question was to hold down entrance and camping fees so that “normal” Montanans could afford to go to the state parks which, after all, belong to the people, not Fish, Wildlife and Parks. His sage advice was not to try to using low-income people as a reason to hold down those fees because it wouldn’t work. He was right.

His other piece of advice was “you can’t guilt trip Republicans” — and he was right about that, too. We’ve already had plenty of examples of that already and the legislative session still has three more months to go with the “my way or the highway” party in charge.

Unfortunately, gutting existing regulations under the guise of providing affordable housing is likely to succeed, but the Law of Unintended Consequences is what will unerringly follow.

Montana is already having significant problems in its populated western valleys that will only increase with deregulation. Those who doubt that can read the groundwater contamination studies that have already been done, including this one: Helena Valley Ground Water: Pharmaceuticals, Personal Care Products, Endocrine Disruptors (PPCPs) and Microbial Indicators of Fecal Contamination.

Drinking effluent from upgradient activities, wastewater treatment plants, and septic systems does not particularly enhance human health, nor the value of your homes — which makes the governor’s rap about “prospering” and “thriving” ring very hollow in light of the facts.

Unfortunately, none of the long-term consequences of deregulation are being discussed. Montana has long been abused by get-rich-quick activities and the sad truth is, we’re about to have yet another bad experience with the short-term, make it and take it crowd. The Law of Unintended Consequences will, however, make us pay in the long run.

George Ochenski is a columnist for the Missoulian, where this essay originally appeared.