January 11, 2011
The Law of Unintended Consequences
Written By Chloe Lutts
In 2007, Congress eliminated all funding for equine slaughterhouse inspectors, effectively shutting down the industry in the U.S. The animal rights activists who had pushed for the ban celebrated, but, as reported in a Wall Street Journal article last week, “some now say they may not have thought through the consequences.”
One such activist quoted in the journal, Whitney Wright, who runs a horse rescue group in North Carolina, “worked to shut down slaughterhouses but now would like to see a few reopen under strict guidelines for humane handling.”
What happened to cause such a dramatic about-face among these horse lovers? Simply, the ban they pushed so hard for, like many bans, had some unintended consequences.
Horses, like every other living animal, get old, and they get sick. But horses are wildly more expensive to care for than other domestic animals, and euthanizing a suffering horse costs hundreds of dollars. So commercial slaughterhouses—which primarily exported the meat from the animals they killed—were an end-of-life option for thousands of horse owners.
Now, with that option removed, horses near the end have one less option. Some lucky ones get sent to horse rescues or sanctuaries like the one Wright runs in North Carolina. But volunteers like her have finite resources and space, and most horses aren’t so lucky. Over 50,000 horses a year are now sent to Mexico for “processing”—auctioned for $10 or $20 and then packed onto crowded trains to travel across the border and meet their fate. As you can see in the graph from the Journal, that’s up from a few thousand before the ban.
Some activists are now advocating for a ban on exporting horses for slaughter. But others, like those interviewed for the Journal article, have learned a valuable lesson about the unintended consequences of prohibition. And faced with the prospect of starving, abandoned horses whose owners can neither care for them nor find a suitable place to send them, activists now arguing for the creation of a limited number of humane slaughterhouses.
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Wright and her fellow animal rights activists are far from the first prohibitionists to learn this lesson the hard way. The most well known ban in the United States’ history, on making, selling and transporting alcohol, was repealed in 1933, after Americans had dealt with its unintended consequences for 13 years. The year before repeal, John D. Rockefeller sadly summed up these unintended consequences:
“When Prohibition was introduced, I hoped that it would be widely supported by public opinion and the day would soon come when the evil effects of alcohol would be recognized. I have slowly and reluctantly come to believe that this has not been the result. Instead, drinking has generally increased; the speakeasy has replaced the saloon; a vast army of lawbreakers has appeared; many of our best citizens have openly ignored Prohibition; respect for the law has been greatly lessened; and crime has increased to a level never seen before.”
Not to mention the vast sums governments spent trying to enforce the law, and the tax revenue from legal alcohol sales they lost.
There are plenty of more recent examples as well. Bans on prostitution have had unintended consequences that range from the tragic to the ridiculous. At the former end, there’s human trafficking and enslavement. At the latter, there are occasional scandals like the one that removed Elliot Spitzer from office, made David Paterson New York’s governor, and then landed Spitzer a gig on CNN two years later. In between the two dramatic ends of the spectrum are the everyday consequences: less safe conditions for sex workers, the criminalization of ordinary people, and, of course … the lost tax revenue.
Likewise, the prohibition of marijuana has made federal offenders out of both casual drug users and prohibition-circumventing entrepreneurs. It fills our jails with non-violent offenders, costs an estimated $13 billion annually, and deprives black communities of potentially productive citizens (a 2010 study of four years of California arrest records by the Drug Policy Alliance found that statewide, blacks are arrested for marijuana possession at higher rates than whites—over triple the rate in Los Angeles—despite consistently reporting lower usage rates). And again: Imagine the tax revenue we’re not collecting—legalization and taxation bills have proposed taxes of $50-$250 per ounce of marijuana; California estimates a marijuana tax could raise $1.5 billion a year.
And in the 2005 bestseller Freakonomics, Steven Levitt and Stephen Dubner present convincing evidence that 1973’s Roe v. Wade (which effectively lifted the U.S. ban on abortion) was the primary reason for a sharp, coast-to-coast decline in violent crime in the 1990s. I know it sounds a little far-fetched, but they present very convincing statistical evidence for their case, controlled for factors from increased police forces (which also helped reduce crime) to gun control laws (which did not.) And though anti-abortion laws are rarely regarded as comparable to alcohol or drug prohibition (possibly because the procedure wasn’t widely available even before a total ban went into place in the U.S. in 1900), they have the same effect as any other prohibition: They turn ordinary citizens into criminals and waste resources. And studies from Sweden to Romania, going back as far as 1930, have found that, down the road, higher crime rates are an unintended consequence of banning abortion.
In recent news, the FDA is considering a ban on menthol cigarettes, a cool minty variety popular with black smokers that critics contend may be more attractive to adolescents. Opponents of the ban (including the tobacco industry) say it could create a black market for the cigarettes. History would seem to be on their side.
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For today’s Investment of the Week, I’d like to highlight a company that has been recommended in the Digests several times recently. Back on November 10, 2010, it was recommended in the Dividend Digest by two different newsletters: Steve Christ’s The Wealth Advisory, and Louis Navellier’s Blue Chip Growth Letter. Then, last week, it was chosen as a Top Pick for 2011 by IQ Trends.
The stock is Altria Group (MO, NYSE), the company formerly known as Philip Morris, and one of the world’s largest tobacco companies.
If this company’s business is so distasteful to you that you would never consider investing in it, feel free to skip the description here. Everyone must draw their own line when it comes to behavior they can’t condone, and for some, selling cigarettes is over that line. But for others it might be companies that employ child labor, raise animals in inhumane conditions, contribute to environmental degradation, or support certain political causes—so we’ll refrain from making any of those judgments for you.
If you’re still reading, you may be interested in what IQ Trends Editor Kelley Wright wrote about Altria in his Top Picks recommendation:
“Setting the social and health debate aside, the returns for Altria Group are anything but sinful. The shares opened at $20.19 in 2010 and were recently trading at $25 per share; a 23.82% gain on price appreciation alone. When the $1.42 in cash dividends paid are added to the $4.81 in capital appreciation, the total return for the year is a whopping 30.86%; a significant outperformance over the major equity indices. While a majority of strategists and forecasters are calling for double-digit gains in the S&P 500 for 2011, we are mindful of Bob Farrell’s Rule #9: When all the experts agree on something, it is time to take the other side of the trade. Altria Group is perhaps the most defensive of stock plays; tobacco has a loyal following regardless of the economic conditions. As such, the company turns in earnings like clockwork, and has a very long history of increasing dividends at least 10% per year on average. Indeed, the projected cash dividend for 2011 is $1.52, which we suspect will be boosted in Q3. In closing, this is a stock you buy and put away.”
Regardless of where you think the S&P 500 is going in 2011, MO is a conservative stock with a hyper-loyal customer base. As was hopefully made clear above, trying to take vices away from people will always fail. And while cigarettes have been banished to alleys and sidewalks in recent years, I think—at least I hope—we’ve learned enough from our other attempts at prohibition to not even consider making them illegal. (Plus, the sheer economic and political clout of companies like Altria makes that seem highly unlikely.)
Cigarettes are terrible for your health, but conservative MO—and its regular dividends, amounting to a 6% yield—could be excellent for the health of your portfolio.
Wishing you success in your investing and beyond,
Chloe Lutts
Editor of Investment of the Week
P.S. Chloe Lutts is the editor of Dick Davis Investment Digest, where she selects top investment picks twice a month from across the financial newsletter landscape. Get more Top Picks for 2011 when you subscribe now! Order now to receive our Top Stock Picks for 2011 issue when it’s published on January 19. Hurry, this offer won’t last long!
Thank you for writing what many of us in the horse industry have opposed to the federally mandated closure of U.S equine slaughter facilities, regulated by our professional USDA inspectors.
We have tried in vain to reason with legislators opposed to government inspected private businesses who processed equines for world-wide export, but were outnumbered by large lobbying groups representing the uninformed animal-loving public. It is unfathomable that history continues to repeat itself on these emotionally-charged issues that produce such devastating consequences.
I hope this piece reaches readers who are open-minded enough to see the big picture!
give the horses to who can afford to take care of them, if there’a noone in usa to take care of them then sebd them to another country to take care of horses, please don’t kill them, help them like you do with homeless ppl and ppl in jail living free too. thank you
It is a huge leap to compare horse slaughter bans to prohibition – horse meat is not on the local happy hour menus at your local bar. Horses are treasured companions, and an important part of our history, and are not raised for food in this country. These horses are not slaughtered for our consumption, rather they are being slaughtered for consumption in other countries.
Additionally it is not old and starving horses that are ending up going to slaughter. It is the healthy horses – with productive lives ahead of them – show horses, camp and lesson horses, companions that have been outgrown etc. They end up at auction, and killer buyers looking for healthy horses with meat on their bones purchase them, often out from under good homes.
The cruelty starts long before arriving at the slaughter plant. USDA documents reveal horses arriving at U.S.-based slaughter plants with horrific injuries suffered in transport. This is because even when there were plants in the U.S., the travel was long-distance. There isn’t a demand for horsemeat, so these plants are few and far between and there will always be long distance, cruel transport in this industry. Graphic photos depict horses with missing and dangling eyes and legs, severe head and back injuries—even horses dead on arrival. In recent years, there have been several horrific accidents involving horses being transported to slaughter on double-decker trailers. The slaughter itself is equally barbaric. Horses are flight animals and don’t stun easily. They are often shot in the eyes, stabbed in the neck and hit with a captive bolt in the face as part of the slaughter. Multiple wounds are often inflicted and horses are dismembered while kicking and conscious quite routinely.
Planning ahead is part of being a responsible horse owner – in fact we’ve compiled a list of resources for horse owners http://www.humanesociety.org/animals/horses/facts/humane_horse_remains_disposal.html For those looking to find out more about the issue here: http://www.humanesociety.org/issues/horse_slaughter/facts/grisly_end_for_horses.html
Also interesting to note that the name and content of Lutts piece is quite similar to Rick Berman’s recent piece on the matter. The same Rick Berman whose PR firm has received over 92% of donations to the Center for Consumer Freedom. You can read more about that here: http://www.humanesociety.org/news/news/2010/05/investigative_report_berman_1.html
Would you see it any other way? Not hardly. With people like you guys, it’s always about the almighty dollar. No compassion whatsoever in your hearts, only greed. A one track mind is all you have~~How to make a buck. Not save a life. There are others in this cruel world, Ms Lutts, that do truly love horses. And for us, love DOES NOT equal slaughter.
First your article was very difficult to read. Secondly you are grossly misinformed, do you truly think that only sick and elderly horses went to slaughter? or go to slaughter now? the large numbers of horses going to slaughter are Quarter horses and Off Track Thoroughbreds. Both breeds whos owners receive federal subsidies to overbreed. For every 300 horses born, only one makes it on the track, the rest are discarded. After they have been on the track for a few years or they don’t produce they are sent to slaughter.
Those horses have been treated with chemicals that are known to be carcinogenic to man. Is this what you want to eat? The EU says that horse meat imported has to be free of the substances for 180 days prior to being slaughtered, Canada’s slaughterhouse is now under investigation by the EU for violating gthose practices.
Now let’s get back to the part that horses are companion animals, just as dogs and cats, as owners it is our responsibility to help our companions live out their lives in comfort and with love.
Chloe, with all due respect, stick to the stock market because you have no idea what you’re talking about when it comes to the horse market. Your reporting has no basis in fact. I’ve been in the horse industry since the 70′s and rescuing horses since way before 2007. I have only seen an increase in at risk, homeless horses in the last year and half. It has to do with the economy, imagine? Not the fact that we have no slaughter houses in the US. Besides, the slaughter option hasn’t been taken off the table, you say yourself that horses are being shipped to Mexico, Canada too in case you didn’t know, so how could the US deciding not to torture our horses on US soil have anything to do with it? The simple answer, it doesn’t. You can’t have it both ways. You can’t say that slaughter is not an option then say 50,000. of them are slaughtered? Do you hear yourself? On top of that, the meat industry doesn’t want our old skinny infirmed horses, their meat isn’t good. They want the yougsters and get them enmasse from the over breeding of stock and race horses for the most part. Let’s not forget about the breeding incentives that the breed registries and government offer. The only unitended consquences of the ban is that our horses are still being slaughtered at all! It’s a sick and depraved industry that feasts upon our hard working and family raised pets along with all the good people who want to save them. It has to do with money, not excess horses. The 100,000.+/- horses slaughtered annually in Mexico and Canada boils down to 1% of the entire American horse industry of around 9,000,000 in the US. How can 1% be considered in excess? Dogs get old and sick too, should we start slaughtering them? People eat them somewhere… Please get your story and facts straight before you poison the country with your baseless hogwash. Thanks!!
It’s very unfortunate that Chloe Lutts opted to not contact any of the true equine experts who are involved in rescuing horses and protecting them from the brutality of slaughter. Whitney Wright just slapped every respectable horse rescue facility straight across the face when she opted to start supporting the brutality of horse slaughter. And, don’t for one minute, believe anyone who tries to convince you that there is such a thing a “humane horse slaughter”.
The fact is that there are many other options for at-risk horses than butchering them alive or killing them slowly and torturously. It does take an intelligent, forward-thinking person to know that, which Ms. Wright clearly is not. Apparently Ms. Lutts bought right into her agenda without doing her homework.
Look up the word ‘slaughter’ in the dictionary, and you will find:
1.the killing or butchering of cattle, sheep, etc., esp. for food.
2. the brutal or violent killing of a person.
3. the killing of great numbers of people or animals indiscriminately; carnage: the slaughter of war.
4. to kill or butcher (animals), esp. for food.
5. to kill in a brutal or violent manner.
6. to slay in great numbers; massacre.
Is this how horses who spent their lives serving us loyally deserve to be treated? Violent killing? Really?
Horses are expensive to buy, to own, to care for, and to euthenize. If you can’t afford all of the above, DON’T BUY A HORSE. It’s not rocket science.
The article on the reversal of ban on horse slaughterhouses is a very limited report of a very small percentage of people wanting a return. Thousands are working on solutions to provide end of life care for old and injured horses. For the healthy horses, retraining or sanctuaries are being created. There is no regret by anyone cellebrating the safety of these wonderfully spiritual creatures. The only moaning you will hear are from those who still think killing an animal who has become inconvenient should be a right. Some want to see these gentle strong and brave companions for the highest price per pound. The horse is not a prduct. It is an emotional loyal being placed in our care. We are honored by its devotion. Please remember to get the whole story. There is enough one sided reporting. The public deserves to read the whole story so a good decision is made.
Legal Horse Slaughter opens the door to Kill Buyer’s who Capitalize on the BLM’s ridiculous and greedy practice of removing publicly owned wild horses from protected lands designated for them and then are put on auction for them to buy and ship straight to the slaughter houses. Make no mistake, legal slaughter is a nightmare for wild horses. If there was a law in place stating that young, healthy, mustang horses were never allowed to be slaughtered that would be one thing, but even then, greedy and irresponsible owners and auctioneers could sell all equines to a horrible fate, and I haven’t even brought up the issue of the handling and practices of slaughter houses. You should tell the truth Chloe. Tell the truth!!!!
No matter what we do, there will always be someone, somewhere trying to sell horses to slaughter. Lets keep the ban up, set up a ban for making it illegal to ex-port horses for slaughter and work together against those who would seek to send ANY horse slaughter!
We have all seen the videos of how they treat animals that some people eat, chickens, pigs, cows, you name it. The way they handle them is wrong. Animals suffer while some over-weight guys get their kicks. Down with slaughter!!!!!
most horse owners do tings with them. then when the horse gets old it cannot compete an longer. the human still wants to compete, but cannot afford to feed two or more. for many raising and training horses is a way of life and providing for their families. I raise horses. I have neer been subsidized by any agency. i make the horse world better by the quality of horse that I provide. the activist needs to know taht all horses are not sweet and loveable. some are dangerous. and untrainable. not everyone can afford an expensive trainer to help them witha problem horse. maybe you should all retire a rabid pitbull.
I agree with your article and the necessity of horse slaughter! It is NOT the opinion of the majority of Americans that we should not have slaughter; it is the “loudly” voiced opinion of a few people who have the time to lobby and have their voices heard. The “real” horse people can’t leave their farms unattended to head to Washington or spend time soliciting donations for their cause, because “activists” are usually unruly and can not sit, reasonably, like an adult, and discuss the true issue at hand here without making personal comments. None of these that have commented here have been in the “horse industry” their whole lives, and more often than not, they have only owned a few horses in their entire lifetime (usually only 1-2 at a time). These people own “companions” but I own livestock. My livestock stays at the barn/pasture, not at my side like a dog. I have been IN these slaughter plants and they are no different than any other animal processing plant. Many of the injuries that were mentioned happened BEFORE the horses ever even arrived at an auction to be sold (to ANYONE with the highest bid), then hauled for any distance. Trailer accidents happen on individuals’ trailers too—are these people inhumane? That’s honestly where most were injured, by uneducated individuals, who, because of the cost of vet care, choose to dump these animals off at the auction where someone else can take the blame for their action/inactions! I can open ALL of your eyes with the TRUTH! I can also back up my words with PROOF!!! Not proof from the words from other’s mouths, or pic/videos from the internet, but REAL PROOF from my own life’s experiences. Most all “activist” only know what they’ve been told or seen on the internet, and they all talk as though they’re reading from the same repetitive script that is, quite frankly, full of BS!
Thank you for an excellent and accurate analysis of the horse slaughter issue. I would like to add one more detail: people always call these unexpected consequences “unintended.” Perhaps they are sometimes, but much of the time these consequences were the secret intention all along of the sponsors. In fact, it was the whole reason for the law in the first place. Most regulatory legislation these days is carefully crafted by more powerful groups for the purpose of gaining advantages over less powerful groups. Often it is the big guys trying to eliminate their smaller competitors, but in this case it is the “Animal Rights” groups trying to legislate by stealth their own extremist political agenda. The AR groups have deliberately fostered confusion between the ideas of Animal Rights and Animal Welfare: The AR goal is not humane treatment, but eliminating animals and meat-eating from our society. They know we do not agree, so they pretend to care about humane treatment as an excuse to promote laws that superficially sound humane, to fool those without first-hand knowledge of how animal husbandry really works. The long-term consequences of their proposals always either hurt animals directly or make them harder to own (or in this case, both). They are legislating our animals away from us in small, incremental steps, hoping we won’t notice. Animal Rights groups made the original push behind eliminating slaughter; it was easy to work up the unthinking crowds of animal lovers into an emotional state and persuade them to jump on the bandwagon. Lots of knowledgeable people pointed out the inevitable consequences, only to be pooh-poohed by the crowds. This is what comes of shallow, stage-one thinking without considering long-term consequences.
So should we just let the horseson the range starve to death? Is that humane?
The Truth needs to be said. You can research over and over and the Majority of people that support horse slaughter have a conflict of Interest its a Slaughter support Slaughter industry.
AQHA, Beef, Pork, Poultry, Swine, Ag, Cargil, Farm Bureau, Cattle raisers association, Trent Loos, Frank Bowman. Oh did I even mention that the above post from Stacy Bowman is married to Frank Bowman.
Note on her post that they tried over and over to inform congress of the problems. Well if you youtube Trent Loos and Frank Bowman you will see Stacys husband and BoZo the clown Trent preaching to a bunch of 5th grade school girls at the springfield capital passing out horse heads on a stick telling them lies about taxes passed on to our children..
Hey Stacy its sad you support a man that lies to the public including you. Being Horse slaughter plants in Texas paid NO GROSS income Tax nor Tariff Taxes as most Americans are subject too. They were NOT even suppose to being killing horses or maybe you did know and are lying to the public too.
Horse slaughter doesnt even make up 1% of the 9 million horses in the US. Pro slaughter have NO record of even promoting or donating to any horse rescue in the US. They merely mouthed them saying there underfunded and overloaded..
All you pro slaughter people need to do the right thing support horse rescues, not your pocket books and lying to the public..
Horse slaughter is merely reward money for irresponsible people..
I dare you to donate to a horse rescue I dare you..
I don’t think its correct to compare prostitution with the other issues you mentioned. Coercing uneducated, underprivileged young women into being sex workers is always wrong, criminalized or legal. You could make the same argument that pedophilia should be legal since “ordinary” people get arrested for doing it.
Choosing to experiment with pot once in a while or selling your terminally ill horse to a processing plant is not the same as getting trapped in a career path as dubiously moral and emotionally unhealthy as the prostitution industry.