Intervention Leads to More Intervention

From David Henderson of EconLog.

"The late Ludwig von Mises famously argued that when governments intervene in the economy, they often create new problems. Then, to address these problems, they impose new regulations that themselves to new problems, etc. 

I thought of that when reading this Wall Street Journal article from Thursday, July 24, 2014. The title of the print version, by Russell Gold, Betsy Morris, and Bob Tita, is "U.S. Puts Brakes on Oil Trains." The dec line is "Proposed Rules Would Limit Speeds Until Tank Cars Are Upgraded, Replaced." Here's a segment from the article:

The federal government's sweeping proposals come after a string of explosive derailments involving trains filled with oil from the Bakken Shale and will change how flammable liquids are transported in North America. But they aren't as stringent as some in the rail and energy industry feared. 

Crude-carrying tank cars would need to upgraded by 2017. The proposed regulations would also give the ethanol industry until 2018 to improve or replace tank cars that carry that fuel. The deadline for cars used to transport other flammable liquids that typically pose less of a hazard than oil or ethanol would extend to 2020.

Other new requirements proposed include a 40-mile-per-hour speed limit until sturdier tank cars can be built or existing railcars can be strengthened, as well as other rules that cover tank-car design, routing, brakes and testing of hazardous liquids.

Shipping oil by train is much more dangerous than shipping by pipeline. But the federal government has a number of regulations that slow or even prevent building of pipelines. One intervention--preventing the construction of pipelines--leads oil to be carried in more hazardous ways. In response, the government does not reduce the regulation that slows the building of pipelines. Instead it regulates shipping by train. Mises strikes again."