December 17, 2021


Over the course of the campaign season I heard many negative political narratives. One side caused the problem, and once “we’re in charge” we’ll implement this obvious solution to make everything better.

The narratives make sense, but oftentimes the issues at hand aren’t actually so simple, and imagining that they are leads to unintended consequences.

Take the ongoing debates about coronavirus response. People want clear narratives that lead to obvious solutions. Unfortunately, there is nothing simple about a pandemic causing a rolling recession. It’s a complex situation and simplified narratives don’t really fit.

Should we have strict lockdowns to squelch the latest virus surge? It depends on local conditions. Just like investing in a commercial real estate property, the devil is always in the details, and we’ve got to balance the costs and benefits.

Lockdowns might be necessary in some cases, but I’m not sure everybody is being honest with themselves about the costs. If we save lives at the expense of big harm to mental health, kids’ education, and the survival of many businesses, what happens next? We have to take the future into account as we make decisions right now.

Unintended consequences are everywhere these days. I’ve seen news stories that many cities face budget shortfalls due to the pandemic. The quick and easy answer is for these cities to raise taxes. But that approach might just push more people and businesses out, further reducing their tax bases.

Similarly, there is a lot of debate across the country about shifting money away from police to fund other social services. I think these proposals are well-intentioned, but they may not account for the full costs of such big policy changes. What happens to public safety, quality of life, and business confidence if police departments are both smaller and demoralized?

In business, leaders are accountable for the bottom line, and that means we have to include all costs, not just the convenient ones. Investors know that ignoring some of the risks can make any deal look good, even if it’s a bad idea. Business decisions are often simpler than public policy choices, but the principle is the same.

Unintended consequences are exactly what we get when we aim for tidy narratives, single metrics of success, and other simplifications. It might feel good to simplify the world, but that’s not reality, and it’s not the way to make good decisions.

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