Unintended Consequences

U.S. carbon emissions have fallen dramatically since their peak in the late 2000s. What explains the decline? In this episode of Unintended Consequences from the Cato Institute, Paul and Peter explore how America’s fracking boom, the shift from coal to natural gas, and expanding liquefied natural gas (LNG) markets helped reduce emissions.

Drawing on Lipford and Yandle’s recent article in Regulation magazine, “Can ‘Golden Straitjackets’ Deliver Good Environmental News,” they examine the environmental and geopolitical benefits of America’s energy transformation, the costs of Germany’s retreat from nuclear power, and how falling solar energy costs are making solar power more accessible.

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Abundance is a tempting goal as Americans face shortages of housing and rising energy prices. But there are government regulations and interest groups that fight efforts to build more housing and energy infrastructure. In this episode, Paul and Peter discuss Jonathan Adler's review for Regulation of Ezra Klein and Derek Thompson’s best-selling book Abundance, the need for further regulatory reform, and whether the movement would benefit from a fuller embrace of public choice economics.

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Rent control is a tempting solution to a very real problem, the lack of quality, affordable housing in tightly regulated municipalities. But controlling prices leads to significant, negative outcomes that not only discourage the building of additional homes but also harm the very class of renters who the policy attempts to help. But in this episode, Paul and Peter discuss the jurisprudence on rent control as covered in a recent Regulation Magazine article, “Rent Control and the Constitution” by Paul Godek, who argues that rent control is an unjust taking similar to abuses of the eminent domain process.

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There are structures and institutions that shape our lives in significant ways and yet are almost entirely hidden from our attention. Delaware’s overwhelming dominance in corporate law is one of them, so powerful that, thus far at least, even the wealthiest man in the world, Elon Musk, has found his Tesla compensation contract stymied. In this episode, Paul and Peter discuss the Regulation Magazine cover article “The Coming Privatization of Corporate Law” by Dorothy Lund and Eric Talley, and their surprising prediction about the future of corporate law.

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There’s an ongoing debate among economists about the most effective policy for incentivizing a reduction in carbon emissions. It’s essentially Team Carbon Tax vs Team Green New Deal, which is a debate over whether prices or subsidies are the more effective tool. In this episode, Paul and Peter discuss the paper “Green Waste” by Ingvil Gaarder et al and its surprising findings about Norway’s experiment with green subsidies.

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During the covid pandemic, it became popular for folks to say “just follow the science” when it came to making decisions about medical treatment and public health. But in this episode – which covers ivermectin, psychologists’ prescription authority, and warning labels for pediatric anti-depressants – Paul and Peter discuss just how complicated the science can be and why both "just following the science" and "doing your own research" are inadequate responses.

In conjunction with Regulation Spring 2026

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The Chairman of the Federal Communications Commission threatened to not renew licenses for broadcasters that were too negative in their coverage of the US-Iran War. But this abuse of FCC authority in the name of protecting the “public interest” is merely the latest episode in a long and dismal history. This week, Peter and Paul discuss the downsides of government licensing of broadcast speech, how it violates the founding principles of this country, and the surprisingly simple solution that would bring it to a well-deserved end.

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Handling corporate debt has long been a standardized process, but something strange has been happening with contract law in recent years. These loan agreements are like the oil that lubricates our economic engine, yet the oil is breaking down as lawyers increasingly exploit contract loopholes to pocket higher returns at the expense of investors. Paul and Peter discuss the trend as described in the paper, “Swiss Cheese Contracts: The Costs of Creative Lawyering,” (Stephen Choi et al), and why it doesn’t quite fit traditional libertarian assumptions about market efficiency.

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Economists use something called the “social cost of carbon” to estimate the future physical and economic damages caused by climate change. Yet the final dollar cost assigned to carbon emissions fluctuates wildly: from roughly $7 under Trump to $190 under Biden! In this episode, Paul and Peter discuss the article “How Should We Value the Future?” (by Peter and David Kemp), how these numbers are generated, and how it’s not purely a product of scientific calculation but rather a profound ethical choice about intergenerational stewardship mediated by the political process.

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As Milton Friedman thought that the weight of careful research about the negative effects of the minimum wage would lead to an overwhelming consensus among economists and ultimately end public support for the policy. It didn’t work out that way, as anyone old enough to remember the “Fight for Fifteen” movement knows. Peter and Paul discuss Richard McKenzie’s article about Friedman’s prediction, why Friedman got it wrong, and the furor over an influential 1994 study that showed no negative employment effects.

In conjunction with Regulation Magazine Winter 2025 Edition.

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You might’ve heard that building more roads to reduce traffic doesn’t really work because of induced demand, the way in which building new infrastructure simultaneously creates more demand. In this episode, Peter and Paul discuss a similar effect for housing, which could make it harder to reduce housing inflation. In addition, they examine a counterintuitive finding: the cheaper a rental housing unit is, the higher the profit margins. That is the opposite of profits for new home construction, where higher-end housing commands larger margins.

In conjunction with Regulation Magazine Fall 2025 edition.

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Four decades ago, America stopped building new nuclear power plants. Some economists have even linked that decision to the era of lost economic growth known as the “Great Stagnation.” But now demand for energy is exploding, given the need for data centers to service AI, the electrification of cars, and other energy-thirsty applications. Nuclear energy boosters have declared an incipient nuclear renaissance, but, as Peter and Paul discuss, Steve Thomas’ cover article for Regulation Magazine, “The Next Nuclear Renaissance,” questions whether a nuclear energy production boom is actually coming to a reactor near you any time soon.

In conjunction with Regulation Magazine Fall 2025 edition.

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President Trump recently fired the Commissioner of the Bureau of Labor Statistics (BLS), claiming that the downward revision of employment numbers was evidence of some kind of conspiracy to make the administration look bad. Paul and Peter unpack what it is that the BLS actually does, why it’s constantly revising its estimates, and the potential negative consequences of politicizing economic data collection.

In conjunction with Regulation Magazine Fall 2025 edition

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The standard, classroom story about the history of antitrust starts with crusading progressive activists breaking up the Standard Oil trust in 1911 to save consumers from corporate greed. But a closer look at the case shows something rather different: a story about anti-competitive rent-seeking hidden in the guise of fighting for the little guy. Peter and Paul discuss William Shughart’s Regulation article “Reappreaising Standard Oil” and then apply what they learn to contemporary antitrust cases like Epic Games v Apple.

In conjunction with Regulation Magazine Summer 2025 edition.

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Wealthy Americans are able to avoid taxes through an accounting strategy known as “buy, borrow, and die.” It’s why Donald Trump is able to pay as little as $0 in federal income taxes some years. But, as Peter and Paul discuss, it turns out that the strategy might work differently than researchers used to think.

Then, in the second half of the show, they discuss a surprising finding about income equality in Scandanavia, which isn’t a product of any of popular progressive redistribution policies like welfare benefits or parental leave. Rather, it’s because of significant wage compression and reduced income for highly educated workers.

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The Corporation for Public Broadcasting, which subsidizes National Public Radio and the Public Broadcasting Service, received half a billion dollars from the federal government each year. While budget battles over the amount of funding are routine, there are more fundamental questions at stake. Join Peter Van Doren and Paul Matzko as they dig into the surprising, partisan history of the origins of public media and the unintended consequences of government subsidies.

In conjunction with Regulation Magazine Summer 2025 edition.

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Every minute, over 500 hours of content are uploaded to YouTube. Some of those videos likely infringe on existing intellectual property rights. In his Regulation cover article, law professor Jonathan Barnett argues that protections for intellectual property, including on platforms like YouTube, have become too weakened. That has resulted in a massive redistribution of wealth from IP holders to online platforms and users. Yet by lowering the functional costs of sharing ideas and data, the internet has generated an explosion in creativity, which is ostensibly the purpose of granting IP rights in the first place. Join Peter and Paul as they discuss whether there’s an optimal degree of strictness for intellectual property rights.

In conjunction with Regulation Magazine Spring 2025 edition.

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One of the hottest debated topics in environmental pollution policy is PM2.5, particulate matter that is so small it can bypass your respiratory system’s filters and enter your bloodstream. Everyone agrees that it’s a potential problem, but Paul and Peter discuss why a single national standard for PM2.5 might be an expensive mistake that actually hurts public health by misallocating attention and resources.

In conjunction with Regulation Magazine Spring 2025 edition.

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On April 2, 2025, President Trump announced the largest tariffs in more than a century, sparking a stockmarket crash and heightening fears of a potential recession. It shouldn’t be a surprise for our listeners; one of our episodes last year covered the sweeping tariffs then being proposed by candidate Trump. But now that the tariffs are actually here, tune in as Paul and Peter discuss the likely negative effects for the US economy and American consumers. Then stick around for the second half of the episode for an update on the status of the TikTok ban.

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New York City’s congestion pricing policy is meant to reduce traffic in Manhattan and to raise money for public transit. But it’s attracted the ire of many, including President Donald Trump. Join Paul Matzko and Peter Van Doren as they discuss what congestion pricing is, why it’s so controversial, and why it’s generally a good idea to more accurately price the use of roads.

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