Mandatory Minimums and Corporate Welfare: Birds of a Feather (An Appeal to the Florida House of Representatives)

Post Date: February 10, 2017

Proponents of both corporate welfare and mandatory minimums rely on the same two fallacies. The first is the post hoc fallacy, and the second is the failure to recognize the unseen effects of public policy.

Anyone who has followed the debate over mandatory minimums should be familiar with the first fallacy. The argument runs like this: Florida passed mandatory minimums. Florida’s crime rate has fallen. Therefore Florida’s crime rate has fallen because of mandatory minimums. It’s difficult to believe a public policy could remain on the books based on reasoning that bad, but tune in to any committee hearing where mandatory minimums are debated and you’ll see someone make that argument in some form.

The truth, of course, is that Florida’s crime rate was falling a decade before mandatory minimums, the gun crime rate actually fell more slowly the decade after mandatory minimums than the decade before, and drug overdose rates are higher now than they were in 1999. Nevertheless, because Florida’s crime rate has continued to fall after we adopted mandatory minimums, some of the less rigorous thinkers among the lobbyist class routinely make this error. I’ve discussed this error at length elsewhere.

Proponents of corporate welfare make exactly the same error. Through the years Florida has created various subsidy programs – film subsidies, stadium subsidies, tax breaks for particular industries – all designed with an eye toward “creating jobs.” And businesses have, indeed, created a lot of jobs in Florida over the last decade. Naturally, proponents of the subsidy programs argue that those jobs were created because of the subsidies. This, again, is the post hoc fallacy. Everyone should watch Speaker Corcoran just EVISCERATE this line of thinking on a recent panel sponsored by the Charles Koch Institute and Texas Public Policy Foundation (two groups skeptical of both corporate welfare and mandatory minimums, it should be noted).

The second error both proponents of corporate welfare and proponents of mandatory minimums make is failing to recognize the unseen effects of their policies. For instance, supporters of mandatory minimums often argue that incarcerating a given offender keeps the public safe, since he can’t commit crimes (against the public, anyway) in prison. This is true, but it’s incomplete. Proper analysis must take into account the cost of incarcerating that offender, and ask whether the marginal cost of incarceration is worth the marginal benefit in terms of public safety.

Yes, incarcerating a first-time, nonviolent drug offender for 25 years – as Florida does – will limit that offender’s ability to commit crimes. But the resources used to lock him up can’t be used to fight crime in other ways (e.g., by hiring more police officers to patrol the streets, or detectives to clear murders, or to test rape kits). And if that offender is a low-risk for recidivism – as many drug offenders serving mandatory minimums in Florida’s prisons are – then paying for his continued incarceration is almost certainly a net loss for public safety. At the very least, one can’t know that this particular sentence is a net public safety benefit.

Proponents of subsidy programs make the same failure to recognize unseen effects of those policies. It’s easy to see jobs created in a given industry or by a particular business. It’s much more difficult to see the jobs that would have been created in other industries but for the subsidies. It’s often said that subsidies and similar policies amount to “picking winners and losers,” because these programs don’t actually create a better economy generally; these government-granted privileges just redirect resources based on political calculations.     

Now, it’s possible either or both corporate welfare and mandatory minimums are good public policies and worth saving. But if that’s true, arguments in their favor need to be supported by evidence, not fallacious reasoning. The degree to which someone can offer actual evidence that these programs work is the degree to which they should be taken seriously.

One more thought: it’s easy to recognize fallacies on issues where identifying them conforms to our policy intuitions.  It’s much more difficult to recognize them when doing so might require us to change the way we think about an issue. I encourage anyone who recognizes these fallacies in either area to see how they work in both areas, and adjust their analysis accordingly.

~Greg Newburn, FAMM State Policy Director

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