The “Law of Unintended Consequences” is generally attributed to philosopher and political economist Adam Smith (1723-1790). I imagine that Congressman Henry Waxman (D-Calif.), Chairman of the House Energy and Commerce Committee, would very much like to have a dartboard with Adam Smith’s face on it right about now.

As unimaginable as it appears to the Congressman, who has spent much of his 16 terms in Congress in the pursuit of “nailing” big business, the new health care law has spawned some unintended consequences of significant proportions. One such consequence is that companies may not deduct tax-free subsidies they get for providing retirees with prescription drug benefits.

Though this change isn’t effective until 2013, many of America’s largest companies are taking the charges now. This is in keeping with SEC regulations that were passed in the hysteria surrounding the Enron scandal. According to The Wall Street Journal (April 2, 2010) first quarter charges for those companies in the S&P 500 could reach $4.5 billion. Ultimately, as many as 1,400 companies may be affected.

The Congressman has summoned the first three companies to announce that they were taking charges (AT&T, Caterpillar and John Deere) to Washington. In his “invitation” he wrote that, “The new law is designed to expand coverage and bring down costs, so your assertions are a matter of concern.” The Congressman’s choice of words, “assertions” is, I think, indicative of the tone he is fond of taking with companies called before the committee.

In practice, it appears that Mr. Waxman is more philosophically attuned to Abraham Maslow than Adam Smith. Maslow’s Maxim suggests that, “When the only tool you have is a hammer, every problem begins to resemble a nail.”

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