In all of life, actions have both short-term and long-term consequences — and often those outcomes stand in stark contrast to each other.
If your three-year-old child is screaming for you to buy him a toy at the store, the quickest way to quiet him is to get the toy. But your actions will have told him that throwing a fit is a great way to get stuff he wants, and so each time you bring him back to the store, he’ll scream again.
If you tell him that you don’t purchase toys for a child who is screaming, his tantrum may immediately increase to ratchet up the pressure. If you’re consistent though, your son will soon learn that screaming isn’t an effective way to get what he wants, and he’ll stop.
Short-term success and long-term pain — or short-term sacrifice and long-term gain?
The same principle is true in business. Want to maximize your profit immediately? Cut corners, over-charge customers and recommend worthless upgrades. Your revenue will skyrocket, and your costs will plunge. In the short-term.
In the long-term, your customers won’t return, they’ll warn their friends about patronizing your business and you’ll have destroyed your reputation — and your future earning potential. Life is full of trade-offs.
While most people have at least an intuitive understanding of these trade-offs in their personal lives, it’s important to recognize that the same principle is present throughout our federal and state Constitutions.
The Founding Fathers did their best in the U.S. Constitution to ensure the long-term success of our nation, and one of the keys to our long-term success is the system they created: a government full of short-term setbacks.
The Constitution was set up to not be efficient. Allocation of representation in each of the two legislative chambers is based on completely different criteria — a state’s population for the House of Representatives and equal representation in the Senate for each state. To make it even less responsive to fluctuating currents of popular opinion, the terms of Representatives and Senators are different, two and six years respectively.
Even if these two legislative bodies are somehow able to agree on a piece of legislation, it can still be vetoed by the President. And the President heads up the executive branch, which gets to implement the legislation passed by the legislative branch. To make lawmaking even less efficient, the Founders established the judicial branch, which has the power to review and even nullify these laws.
Inefficiency in the short-term is the very thing that ensures that only the ideas with the most sustained support over time become established law. It is an efficient way to prevent politicians from passing laws based on untested notions, hyperbole or the short-term infatuation of the masses. The merits and downsides of a potential law have ample time to be examined and discussed from multiple different perspectives.
The gridlock in Washington, D.C. shouldn’t be looked at as a flaw in our system of government. Rather, it is part of its genius and reflects the current deep divide in our country over the proper size and scope of government.
One of the best ways to increase the short-term inefficiency of government and hence the long-term quality of its laws is to limit how often the Legislature meets. In that respect, Nevada has a huge advantage, because our legislature is only in session for four months every two years.
This trade-off principle is also seen in almost every liberal policy proposal. Consider this plan for “boosting” the economy: Let’s have the Federal Reserve artificially lower interest rates. The demand for home loans will rise, which will boost housing prices. Higher housing prices will lead to higher consumer confidence and home equity loans that boost consumer spending. A win all around, right?
It looked that way to many … until 2008 anyway. That’s when the long-term consequences of these short-term gains became very clear. The housing bubble burst, yielding a housing slump that’s still hindering Nevada’s economy. It’s been prolonged by numerous government interventions into the foreclosure market that were focused on the short-term.
Long-term success often requires rejecting unsound and solely short-term gains. Recognizing that principle, America’s Founders constructed a system focused on long-term success, and we are still enjoying the fruits of their wisdom today.
It is also a legacy that we are obligated to respect and preserve.
Victor Joecks is executive vice president of the Nevada Policy Research Institute.