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January 12, 2014

HOWEY: Marriage and unintended consequences

In 1988, which 20 years into the Republican gubernatorial dynasty, there stood the ideal candidate - Lt. Gov. John Mutz. He was of excellent pedigree, having served with distinction under two-term Gov. Robert Orr. He had been a successful state senator and a corporate executive.

But political dynasties come to an end and when the votes were counted, Mutz had lost to a 31-year-old Democrat named Evan Bayh, the son of a U.S. senator.

There was a precursor to the end of this dynasty, and it occurred two years earlier when the powerful House Speaker J. Roberts Dailey was defeated for re-election. There were some of the usual barnacles and chinks a speaker picks up, even in his own district. But there was something below the surface that had changed. Dailey was an ardent opponent of gambling, and there had been a growing appetite in Indiana for a state lottery, which the state constitution prohibited.

Finally, upon Dailey’s defeat and after more than a decade of the issue festering in the Indiana General Assembly, it passed two successive legislatures and was placed on the ballot.

And despite widespread opposition from the Republican establishment over those years, it passed with 62 percent of the vote. A landslide. The lottery wasn’t the lone factor in Mutz’s loss to Bayh. Dynasties run their course, sometimes at the hands of a fresh face. But it did add a new dimension into that election, and brought out an array of single issue voters more aligned with Bayh and Democrats.

I conjure this history from a file bearing this title: “Unintended consequences.”

Former Fortune Magazine economics editor Rob Norton gives a fascinating historical review. The most recent example was the Exxon Valdez oil spill disaster in 1989. In its messy wake, many American coastal states enacted laws placing unlimited liability on tanker companies. Royal Dutch/Shell responded by hiring independent shippers. The use of “fly-by-night operators with leaky ships and iffy insurance” actually increased the odds of spillage as a consequences of the new laws.

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