Browner, Colbert, the EPA, and Broken Windows

Another thing the EPA does is to insist that its regs are very cheap to implement and have huge benefits to health. The claimed benefits of all the parts of just the clean air regs are nearly the US GDP. Economics research shows that companies spending the most on pollution control take a hit in the stock market and similarly after a new reg is passed the share of a product that is imported goes up. But EPA is anti-business and economically illiterate. Some recent regs attempt to regulate things that can’t be regulated, or to call milk and “oil” so that a milk spill at a dairy needs a hazmat containment barrier, or trying to ban “dust” which is an inevitable part of farming (of course, ironically, herbicides and GM crops have reduced the amount of tillage needed by farmers by probably 80%, but these same people want all herbicides banned).

Juice,
“Someone will lose for sure, but in the case of a smoke stack scrubber or any effective and cost efficient environmental or workplace protection, there should be a net gain.”
That must be decided on a case by case basis. It is true that many earlier clean air regs were responses to real problems. Heavy sulphurous and NOx emissions caused real respiratory injuries. Where there is no actual problem to address, then the regulations cause a net loss, just as the broken window fallacy describes. Somebody already mentioned “cash for clunkers”, which represents one of the most recent perfect examples of BWF. Some may argue that the replacement cars were better – more efficient. The point is, one has to balance gain against cost.
The marketplace is the best mechanism to do this. If the savings made by trading in old cars for new exceeded the cost, people would have been doing this on their own, without government subsidies. The point is, they didn’t, so it perfectly fits the broken window. New regulations to mitigate against CO2 emissions have to have the same cost-benefit analysis applied. Nicholas Stern attempted to do this, in order to justify the mitigation costs. If you accept Stern’s report then you stand with the argument that the window needed replacing. If you reject the Stern report, then the only conclusion is that CO2 mitigation costs are another example of the BWF.

@Juice
“This is another example of what I call the Broken Window Fallacy Fallacy.”
I think you are misunderstanding the BWF. The BWF focuses attention on opportunity costs. These opportunity costs are the ones which are most often left out in analysis of public policy. Once you are reminded of the existence of opportunity costs, you need to figure out how to compare the costs of various actions – via a central planning agency or via a market.
People in the USA prefer the bureaucratic dictatorship model where “wise overlords” who read from the Holy Models make cost-benefit analyses using flawed numerical macro-economic models, climate models, etc.
People in the older USA used to prefer the free market, but those people are all dead now.

At 4:41 AM on 21 October, Chuck L had written:

In The Door into Summer, [1956] Robert Heinlein thought of a similar scheme as the protagonist, Dan Davis gets his first job in the future: even though I am familiar with his work, I don’t know whether he was serious or not! [Chuck L quotes:]

The job I found was crushing new ground limousines so that they could be shipped back to Pittsburgh as scrap. Cadillacs, Chryslers, Eisenhowers, Lincolns-all sorts of great, big, new powerful turbobuggies without a kilometer on their clocks. Drive `em between the jaws, then crunch! smash! Crash! — scrap iron for blast furnaces.
It hurt me at first, since I was riding the Ways to work and didn’t own so much as a gravJumper. I expressed my opinion of it and almost lost my job…until the shift boss remembered that I was a Sleeper and really didn’t understand.
“It’s a simple matter of economics, son. These are surplus cars the government has accepted as security against price-support loans. They’re two years old now and they can never be sold, so the government junks them and sells them back to the steel industry. You can’t run a blast furnace just on ore; you have to have scrap iron as well. You ought to know that even if you are a Sleeper. Matter of fact, with high-grade ore so scarce, there’s more and more demand for scrap. The steel industry needs these cars.”
“But why build them in the first place if they can’t be sold? It seems wasteful.”
“It just seems wasteful. You want to throw people out of work? You want to run down the standard of living?”
“Well, why not ship them abroad? It seems to me they could get more for them on the open market abroad than they are worth as scrap.”
“What! — and ruin the export market? Besides, if we started dumping cars abroad we’d get everybody sore at us-Japan, France, Germany, Great Asia, everybody. What are you aiming to do? Start a war?” He sighed and went on in a fatherly tone. “You go down to the public library and draw out some books. You don’t have any right to opinions on these things until you know something about them.”So I shut up. I didn’t tell him that I was spending all my off time at the public library or at U.C.L.A.’s library; I had avoided admitting that I was, or used to be, an engineer-to claim that I was now an engineer would be too much like walking up to du Pont’s and saying, “Sirrah, I am an aichymiste. Hast need of art such as mine?”
I raised the subject just once more because I noticed that very few of the price-support cars were really ready to run. The workmanship was sloppy and they often lacked essentials like instrument dials or air conditioners. But when one day I noticed from the way the teeth of the crusher came down on one that it lacked even a power plant, I spoke up about it.
The shift boss just stared at me. “Great jumping Jupiter, son, surely you don’t expect them to put their best workmanship into cars that are just surplus? These cars had price-support loans against them before they ever came off the assembly line.”
So that time I shut up and stayed shut. I had better stick to engineering; economics is too esoteric for me.

I suspect that because science fiction fandom has been overwhelmingly libertarian ever since (at least) the 1970s, we assume today that the superiority of free market economics had always been understood, acknowledged, and hammeringly advocated by SF fen.
After all, “fans are Slans.” We’re better than those cement-headed mundanes.
But digging into stefnal social and political history can deliver a helluva jolt to the fannish system. I’d long known that the Futurians of First Fandom had been a buncha goddam New York City pinkos (Frederick Pohl had been a member of the Young Communist League, Donald A. Wollheim saw socialism a l’outrance as “a political ideal,” Judith Merril was a Trotskyite, and James Blish was a Spenglerian enamored of H.G. Wells’ “liberal fascism“), but I suppose that I’d resisted acknowledgement of just how deeply committed to Woodrow Wilson’s hideously evil “progressivism” – America’s home-grown predecessor to what would become National Socialism in Europe – Robert A. Heinlein had been from his very youngest days.
I’m in the process of reading the first half of William H. Patterson’s massive biography, Robert A. Heinlein: In Dialogue with His Century: Volume 1 (1907-1948): Learning Curve (2010), and it’s gut-wrenching. Patterson is pretty obviously himself a “progressive,” and gushes sickeningly over the cancerously invidious political poison inflicted on these United States by vicious bastiches like Wilson and William Jennings Bryan and the rest of those “smartest guys in the room” sons of socially diseased random inseminators who postured and bloviated and meddled without consequence or respect for human rights to arrogantly begin the process of forcing our regional and national economies at gunpoint into the condition of debilitation we’re presently experiencing.
I suspect that by the mid-1950s, Heinlein had more than sufficiently begun coming to terms with the bankruptcy – moral and political as well as economical – of the “Liberal” fascism embodied in the New Deal and every other manifestation of dirigiste “government-as-Santa-Claus.” By the time he wrote The Door Into Summer, he was demonstrating that, unlike his protagonist in that novel, economics was not “too esoteric” for him to grasp the real sense of it. From a point earlier in The Door Into Summer we read his cynical observation:

I’ll say this for military research: if money and men can do it, it gets results. Print another billion, hire another thousand scientists and engineers, then in some incredible, left-handed, inefficient fashion the answers come up.

The effects of sustained decades of currency debauchment – institutionalized “legal counterfeiting” by the Federal Reserve System – were being appreciated by the 1950s, and if Heinlein wasn’t fully aware of the efforts of the Foundation for Economic Education and hadn’t yet read works like von Hayek’s The Road to Serfdom (1944) or Henry Hazlitt’s Economics in One Lesson (1946), he was certainly aware of the currency of free-market, individual rights ideas growing in American intellectual circles.
Remember, when Heinlein wrote The Door Into Summer, he and Virginia were living in he house they’d designed and built in Colorado Springs, just down the road from Freedom School founder Robert M. LeFevre.
From the postwar years forward, Heinlein took enormous pains to minimize (and, to the extent possible, suppress) public awareness of his early commitment to socialism. There was both the McCarthy tendencies of the ’50s to be appreciated as well as what I strongly suspect had been his utter humiliation in his confrontation with the inescapable fact that his Upton Sinclair “EPIC” enthusiasms had made of him the very archetype of the well-intentioned but utterly idiotic parlor pink he now realized was so thoroughly deserving of contemptuous scorn.
It’s no surprise at all that publication of his first novel – For Us, the Living: A Comedy of Customs (2003) – was so scrupulously suppressed by Heinlein during his life and by his widow, Virginia, and only got dragged out and put into print after she had died.
Well, let’s see how badly I’ve screwed up the HTML this time. Oh, for an “Edit” capability on this Web site….

@More Soylent Green! says: October 21, 2011 at 11:26 am
Absolutely spot on! Brilliant!

The GOP is trying to act but the idiot Democrats are spinning it to look like the GOP supports pollution. Boxer and Waxman were out of the gate like a shot a week or so ago.
The country should simply dismiss any politician from California without thought, California left reality behind a long time ago.
The entire situation is an absurd waste of tax dollars.

I got to thinking about this broken windows thing. Private enterprise creates wealth by producing things or services. Government doesn’t produce anything, and in fact slows production up. So if you look at jobs from a parasite view, government is the parasite and private enterprise is the organism that hosts it. For each person hired for the government, that is one person no longer producing anything. Production goes down, and with more regulations, it drops even further. So when employment data are announced, I’d find it useful to see a breakdown on where the jobs are increasing. If overpriced government jobs increase, that’s bad for us, if private jobs go up, that’s good. It isn’t jobs per se, but rather which kind of job is increasing.
If employment is up 100,000 it makes a big difference whether it is a government job or private wealth producing job.

Willis – sorry but I don’t quite see your point. Yes, private citizens can’t spend the same money twice – if the father pays the glazier then the amount he can afford to pay for other goods or services is reduced by the same amount (at least at micro level).
But at economy-wide macro level, isn’t it rather more about the savings ratio – if savings are increasing overall (worried people are paying off their debts) the overall effect is a reduction in economic activity – economic growth declines, or the economy goes into recession. If the savings ratio is reducing (confident folk are incurring more debt and spending their money relatively freely) the economy will improve.
What is, however, for sure (but has little to do with the savings ratio) is that government-directed expenditure (eg under regulatory requirements) is similar to that of a command economy – it produces false markets and inefficiencies, as compared with letting citizens keep and spend their own money, in the way they themselves choose in a free market.