Government Intervention Backfires Once Again

3D-print guns to make a fortune! [The Rude Awakening] October 04, 2022 [WEBSITE]( | [UNSUBSCRIBE]( Government Intervention Backfires Once Again - Gun buyback programs are catnip for morons. - History is replete with lessons about perverse incentives. - The taxpayer needs to smarten up about this idiocy. [GONE: your shot at 102% gains in 6 days…]( Hate to say, “I told you so”… But we’ve sent you a countless number of emails trying to draw your attention to this unprecedented [wealth-building opportunity.]( And according to our file, you still didn’t take action. And that’s a shame. Because you just missed your shot at a 102% gain in 6 days – in the middle of a market selloff. That’s the bad news. The good news? We’re issuing a brand-new buy alert right now with money-doubling potential. [And you can go here now to get in position to receive it before you miss out again.]( [Click Here To Learn More]( [Sean Ring] SEAN RING Dear Reader, Happy Tuesday! Today I’m going to turn away from the markets, as I’ve been inundating you with charts lately. Sure, we had a “big” rally yesterday. After all, the Journal’s headline yesterday read as follows: [WSJ] But that’s why context is so important. This is what actually happened: [INDU] Yes, that last candle. We haven’t even got past last week’s highs yet. We’re nearly 2,000 points below the 50-day moving average. And we’re over 3,000 away from the 200-day moving average. Can it be the start of a new rally? Sure. Is that scenario probable? No. And if we do rally from here, it’s likelier to be another sucker’s rally than the start of a new bull market. So, let’s turn our attention to some theory mixed with hilarious government practice. As you know, I’m an ardent free marketeer. I share Murray Rothbard’s sentiment that “everything the government touches turns to crap.” So today, let’s look at the sometimes hilarious unintended consequences of ill-thought government intervention. [Urgent From Jim!]( Hey, it’s Jim Rickards. Big changes are coming to my research service, and I wanted to make sure you saw what was going on. [Just click here now to see my announcement.]( [Click Here To Learn More]( A Bit of History I’ve been to India many times. I've visited Delhi, Mumbai, Pune, Jaipur, and Chennai… just to name a few cities. Its history is impressive, despite what India’s nationalists think about the British. Flashman and the Mountain of Light is one of my favorite books. Though fictional, it gives a detailed account of the Flashman’s frolicking with the Koh-I-Noor in what’s now Pakistan, then part of British India. I can’t recommend the book enough. One hilarious episode of British India’s history is that which spawned what economist Horst Siebert called “the cobra effect.” [Lawrence] Let’s define the appropriate terms here first, from [Wikipedia]( A perverse incentive is an incentive that has an unintended and undesirable result that is contrary to the intentions of its designers. The cobra effect is the most direct kind of perverse incentive, typically because the incentive unintentionally rewards people for making the issue worse. The term is used to illustrate how incorrect stimulation in economics and politics can cause unintended consequences. In the early 1900s, Delhi had a cobra problem. They were everywhere. And the last thing you want to see in your house is a cobra. So, the British government did what it always does: it intervened. To bring down the cobra population, the Raj offered a bounty for every dead cobra brought to it. Initially, this worked well. But then some enterprising Indian entrepreneurs got the bright idea to breed cobras, kill them, and bring them in for the reward. Initially, this worked for them, as well. Then the government caught on and stopped the program. And what did those now incentive-less Indian entrepreneurs do? They released the cobras into the wild (streets). By the end of it, Delhi’s cobra population had increased. We know this happened. There’s no disputing the story. And yet, governments still engage in this idiocy. Guns and (Leftist) Governments So, I laughed this morning when I opened ZeroHedge to find the following piece: [Precious Metals: Gold] Credit: [ZeroHedge]( From the piece: A man named "Kem" printed 110 firearms on a $200 printer he got for Christmas and turned them into a gun buyback program held at the Utica Police Department in Oneida County, New York. "I 3D-printed a bunch of lower receivers and frames for different kinds of firearms," Kem told local media WKTV. "And it ended with the guy and a lady from the budget office finally coming around with the 42 gift cards and counting them in front of me ... $21,000 in $500 gift cards," Kim added. WKTV contacted the state Attorney General's Office about 3D-printed firearms, though there was no response to that question besides it being a 'big success and that the program, in general, keeps New York families safe.' "I'm sure handing over $21,000 in gift cards to some punk kid after getting a bunch of plastic junk was a rousing success," laughed Kem. … Kem concluded to the media outlet: "Gun buybacks are a fantastic way of showing, number one, that your policies don't work, and, number 2, you're creating perverse demand. You're causing people to show up to these events, and they don't actually reduce crime whatsoever." In Dressed to Kill, Basil Rathbone’s Sherlock Holmes once quipped, “...the average petty thief has more extensive knowledge of the value of objet d‘art than the average collector.” I think we can extend that sentiment to entrepreneurs and bureaucrats. It’s not like episodes like this don’t happen all the time. Here are just a few listed on [Wikipedia]( How about that time in 2002 British officials in Afghanistan offered Afghan poppy farmers $700 an acre in return for destroying their poppy crops? The farmers planted as many poppies as possible to collect payouts from the cash-for-poppies program. Some super intelligent farmers harvested the sap before destroying the plants, getting paid twice for the same crop. What about that time in 2005 when the UN Intergovernmental Panel on Climate Change began an incentive scheme to cut down on greenhouse gases? The EU rewarded companies disposing of polluting gases with carbon credits, which could eventually get converted into cash. The program attributed one of the highest bounties for destroying HFC-23, a byproduct of a standard coolant, HCFC-22. Companies began to produce more of this coolant to destroy more of the byproduct waste gas and collect millions of dollars in credits. Because they produced so much of the stuff, its price fell significantly. This led companies to continue using it despite being bad for the environment. It took until 2013 for the EU to suspend these types of credits. This one is my favorite: The United Kingdom's listed building regulations are intended to protect historically important buildings by requiring owners to seek permission before making changes to buildings that have been listed. In 2 0 1 7 , the owners of an unlisted historic building in Bristol destroyed a 400-year-old ceiling the day before a scheduled visit by listings officers. Why? To prevent the building from being listed, which almost certainly would have limited future development. But the absolute best thing listed in the Wikipedia article: “3D printed guns being turned into gun buyback programs like those in Houston, TX.” The list is practically endless, thanks to the linear thinking of the bureaucrat. Wrap Up I love enterprising men like Kem, who game the system. Perhaps you’ll say his actions are immoral, and I’d agree with you. But the more salient point is that we don’t live in a moral world. Howe certainly live in an economic one. Thomas Sowell once said, “The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.” It seems that bureaucrats ignore all the lessons of economics. Until tomorrow. All the best, [Sean Ring] Sean Ring Editor, Rude Awakening [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. 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