An interesting article from Timmy, who makes clearly a point I’ve glimpsed muddily recently. Notice that the point stands, even if you happen to like regulation (I think there is far too much). Permit me to quote (fair use, I’m sure):

Big business positively delights in much regulation… Capitalism… is indeed all about making profit. Get the most out of whatever it is that you’re doing. It’s the market, the competition that it allows, which is what tempers this [] profit gouging. You can’t charge what you like for a pint of beer because there’s another pub around the corner… What regulation does is favour both the incumbents in any activity and also large companies in anything at all. For what worries business is not whether they’re allowed to do something or not: but that other people will find a better way of doing it and thus compete. More regulation means that fewer upstarts can enter the market and any that do are hobbled by that regulation. The more regulation the more the current large companies can continue to be capitalist without having to worry about their practices being tempered by that market competition.

This affects things like, say, Wonga. If you’re certain that Wonga’s rates are too high, then you think they’re making too much profit. In which case, someone else should want to undercut them. What stops other people? Well, a variety of things, including the need to advertise in order to be known. But also, the vast mountains of regulation you’d need to go through to set up any such operation.

Refs

* For those who wanted an example of the problems with regulation.

Comments

  1. #1 thomaswfuller2
    2013/08/03

    You should read more of Timmy’s work. You need the education.

    [I read all his posts. He's good on economics and I find him instructive there; poor on climate science. But unlike many he mostly knows his limits on the latter, and takes IPCC / Stern as a given, which is a sensible approach. You could learn from him -W]

  2. #2 Tom Curtis
    2013/08/03

    The argument is far to general to be correct. If valid, it would apply almost without regard to the specific content of the regulation, but what we find is that whether large or small business favours a particular set of regulations depends very much on the specific content of the regulation.

    For example, in Queensland large retailers (and shopping center managements) push for deregulation of trading hours, while small business opposes it. The reason is that labour forms a far larger share of small business costs, so increased trading hours decrease their net profitability. For supermarkets, in contrast, far more costs come from stock, and rental, both of which are defrayed by longer opening hours.

    [I think the argument *does* apply almost without regard to the content. I grant you that your specific example (we have the same here), but its very rare. Another, perhaps, would be regulations designed purely to deter big-business; but that's sort-of cheating -W]

    To the extent that large businesses do favour regulation it is that they can defray compliance costs across a larger cash flow and because they typically have far more political influence over the actual regulations that are enacted.

    [That they get more influence over the content is another good point; but perhaps a secondary one -W]

    Finally, the group that tends to favour regulation above all tends to be consumers.

    [Ha. Speak for yourself -W]

    That for the simple reason that it is their bulwark against predatory practices by businesses too large to be brought to account by market forces.

    [That's definitely how its sold to people -W]

  3. #3 Ned
    2013/08/03

    Our esteemed host WMC writes: I read all his posts. He’s good on economics and I find him instructive there; poor on climate science.

    Er, so he’s poor in the area of your own expertise, but you find him instructive in an area where you don’t have expertise? That’s a bad sign.

    Wasn’t there some story by Carl Sagan, about how he knew that Von Daniken’s ideas about extraterrestrials were nonsense, but at least his archaeology was interesting? And then he met an archaeologist at a cocktail party or something, who said that Von Daniken’s archaeology was garbage but hey, maybe his ideas about extraterrestrials were plausible….

    [Um, that's a good point; though I'm aware of it. I defend myself in some ways: when I've checked up on a few things, he's been right; and many of the things are not things I have to take his word for; more a matter of clearly stating ideas. Such as the regulation one (and that one isn't really economics, more politics) -W]

  4. #4 Hank Roberts
    hankroberts.wordpress.com
    2013/08/03

    > regulation … far too much

    0) Money, fast, with collateral damage eventually leads to
    1) Simple law and implementing regulation; leads to
    2) Lawyering language recharacterizes transaction as OK
    3) Money, almost as fast
    4) Regulations eventually revised to close loophole
    5) Lobbying, campaign contributions, oversight hearings
    6) Law or regulations amended, often using industry text
    7) GoTo 1

    That’s where a lot of that excess regulation comes from.
    Add in the revolving door between government and industry, where the more complicated the law and regulations become, the more leverage the expert in that material develops. Lather, rinse, repeat.

    Or so Robert Reich says, various places; shorter: overregulation comes from patching loopholes, because no simple law and regulation can’t be gotten around by clever argument.

    ________________
    Meanwhile a growing number of Republicans have signed a pledge – sponsored by the multi-billionaire Koch brothers — to oppose any climate-change legislation that might raise government revenues by taxing polluters.

    Officially known as the “No Climate Tax Pledge,” its signers promise to “oppose any legislation relating to climate change that includes a net increase in government revenue.”

    By now 411 current office holders nationwide have signed on, including the entire GOP House leadership, a third of the members of the House as a whole, and a quarter of U.S. senators.

  5. #5 Hank Roberts
    hankroberts.wordpress.com
    2013/08/04

    Shorter: the reason legislators and lawyers and lobbyists make regulations ever more complicated in service to their clients’ need for loopholes:

    Justice Ginsburg … defined the legal mind as one that “can think about a thing inextricably attached to something else without thinking about the thing which it is attached to.”

    The 11th Commandment (“You Do Too Know What I Mean!”) is not taught in law school.

  6. #6 TheGoodLocust
    2013/08/04

    Of course, larger corporations have a seat at the table when it comes to writing the regulations.

    I find it so amusing when the conspiracy theorists talk about how “Big Oil” is vociferously opposing global warming when they’ve been benefiting the most from all the subsidies and regulations passed in the name of fighting it.

  7. #7 Kevin O'Neill
    2013/08/04

    In the United States, when general talk is of ‘regulating’ business the two agencies that are usually the target are the EPA (Environmental Protection Agency) and OSHA (Occupational Safety and Health Administration).

    Allowing business the unfettered ability to pollute the environment and/or destroy habitats that an entire species depends on is the alternative. If there’s a dollar to be made, they will. They have.

    Worker safety is the same sad story.

    Anyone against regulation – at least in the United States – is basically taking the stance that business should be allowed to rape the countryside at will and if working for us means you’ll die or be crippled at an early age – tough luck.

    [That seems like a false choice; the sort of thing designed to polarise debate and deliberately impede progress. Take, for example, reform of the tax code -W]

  8. #8 Hank Roberts
    hankroberts.wordpress.com
    2013/08/04

    >> consumers
    > speak for yourself

    Sometimes that’s not possible, you know. The laws get passed and the regulatory structure set up, often, after cases where the consumers could not speak for themselves.

    E.g.: http://www.fda.gov/AboutFDA/WhatWeDo/History/ProductRegulation/SulfanilamideDisaster/

    But, see, this is a problem with law and regulation — they don’t prescribe avoiding an outcome, they proscribe specific individual actions after the fact (at least in US law, with no precautionary principle).

    In that case linked above, after the deaths started to be reported, “Twenty-five seizures were made under federal law. The charge was misbranding. “Elixir,” FDA said, implied the product was an alcoholic solution whereas it was, in fact, a diethylene glycol solution and contained no alcohol. If the product had been called a “solution” instead of an “elixir,” no charge of violating the law could have been made. FDA would have had no legal authority to ensure the recovery of the drug and many more people probably would have died.”

    [I think that's wrong. It was necessary to seize these products (in the absence of any laws about recall, I presume) and so the FDA made up a spurious reason about fake branding. Since recall was obviously necessary, no-one complained. Had the product been called a solution, they would have made up some other spurious pretext -W]

    Got that? The manufacturer broke no law, violated no regulation, and
    > … the firm’s owner, said: “My chemists and I deeply regret the
    > fatal results, but there was no error in the manufacture of the
    > product. We have been supplying a legitimate professiona
    > demand and not once could have foreseen the unlooked-for
    > results. I do not feel that there was any responsibility on our part.”

    Got that? They did no testing — so any problems were “unlooked-for” there.

    [You omitted "The firm's chemist apparently did not share this feeling; Harold Watkins committed suicide after learning of the effects of his latest concoction." Whats odd is that article makes no mention of any subsequent prosecution; it would seem to be of interest whether one occurred or not -W]

    The FDA is still catching manufacturers using diethylene glycol as a solvent in products meant for human consumption — toothpaste and electric cigarettes, for example. They can warn, but they can’t stop these from being produced and sold.
    That’s the law.

    [But this is just a regrettable story from history. The relevance is unclear, as I'm not suggesting that *all* regulation is bad; and nor AFAIK is anyone else. That there was no law about testing in 1936 tells you nothing useful about whether the testing regime now is sane or not, let alone the desirability of other sorts of regulation. Even more, the fact that regulation X would have prevented unfortunate death Y doesn't tell you that regulation X is desirable -W]

  9. #9 dhogaza
    2013/08/04

    They love it so much they lobby constanty against those that exist and those that are proposed for the future …

    When business interests line up in favor of new regulations, you can bet the proposed legislation already fits their existing plans and that they see this as a pre-emptive strike against the enactment of stricter regulations.

    Since WMC things there are too many regulations, this implies WMC has some idea of what the optimum number of regulations would be. Perhaps he’d like to educate us …

    WMC, whenever you get Fuller on your side, I suggest that’s a good reason to rethink your position right there.

  10. #10 TheGoodLocust
    2013/08/04

    @Kevin O’Neill [quote]Allowing business the unfettered ability to pollute the environment and/or destroy habitats that an entire species depends on is the alternative.[/quote]

    Allowing unelected bureaucrats the unfettered ability to regulate causes poverty (with all the negatives that go along with poverty – like death) and stifles innovation.

    [quote]Worker safety is the same sad story.[/quote]

    The story of worker safety increasing over a long period of time, creating OSHA during that trend, and then taking credit for that trend continuing?

    [quote]Anyone against regulation – at least in the United States – is basically taking the stance that business should be allowed to rape the countryside at will and if working for us means you’ll die or be crippled at an early age – tough luck.[/quote]

    A straw man argument. I’m against over-regulation because I’m against poverty and for innovation.

    There currently isn’t much in the way of preventing over-regulation.

  11. #11 David B. Benson
    2013/08/04

    Industry Influence To Blame For Tavares, Florida Explosion
    http://www.desmogblog.com/2013/08/01/industry-influence-blame-tavares-florida-explosion
    This post also mentions that “Countless other explosions, oil leaks, gas leaks, and other industrial “accidents” occurred all over the country in between these three major events, and every one of them has something in common: They were all allowed to happen thanks to a lack of sufficient safety regulations.”

    So don’t expect me to accept a bald statement of current over-regulation, at least in the USA.

    [But that article presents no evidence that "all allowed to happen thanks to a lack of sufficient safety regulations" - assuming that by regulation you mean rules / law. As it says itself: Tea Party Florida Governor Rick Scott and Republicans in Washington gave them the gift of a budget cut – a cut that dangerously lowered the budget of government agencies that oversee public and workplace safety. The result is fewer regulators, fewer inspections, and more injuries. And so on, to the Deep Water Horizon stuff. What that article is really saying is that there is a lack of enforcement of existing regulations, whilst calling out for the wrong solution - more regulations.

    And this is a problem. Something goes wrong, and people call out for more rules, more regulations, that would have prevented *just exactly just this problem*. We see it here in the UK every time there is a child abuse case. And the answer always turns out to be that had the existing maze of regulations actually been followed, all would have been well. But that for various reasons that wasn't possible. But looking at the fundamental underlying problem is too hard, so we just get more pointless regulation -W]

  12. #12 dhogaza
    2013/08/04

    D Benson:

    “So don’t expect me to accept a bald statement of current over-regulation, at least in the USA.”

    Amen. WMC, please educate us why our regulatory efforts have been so overbearing?

    Feel free to propose market solutions that in the US have worked better than regulations.

    [See answer to DB above. As to solutions, I'm not familiar with the US, so I can offer an example from the UK. Its only an example, but everyone else seems to like arguing that way, so perhaps I can too: child care. The govt has imposed increasingly onerous regulations on pre-school child care provision: number of children that can be looked after, and even a curriculum and activity design. These apply even in the context of individuals doing the provision, where the parents have inevitably met and talked to the provider and are happy with the provision. So the regulators feel the need to intervene in areas where no problem exist, and since they are imposing extra burdens, extra pointless costs inevitably accrue. Individual providers are not well placed to satisfy the ridiculous demands for pointless documentation. this leads to some closing down; and then to the ridiculous situation where the state creates a class of people who go around advising the poor providers on how to fill in the pointless documents, wasting yet more money -W]

  13. #13 Hank Roberts
    hankroberts.wordpress.com
    2013/08/04

    Myanmar is — maybe — about to try this out.
    If the proposal gets a hearing, gets to be voted on, and is passed as written, then:

    “U Nay Win Myint, general manager of Gamone Pwint Shopping Mall, said the law will force retailers to be careful about what goods they stock, especially food and medicinal products. “Shops will be required to sell food and medicinal goods that have Food and Drug Administration approval,” he said. “In the past, we could sell any products and nobody would complain. But if a consumer protection law comes into effect, we will have to change our ways.”

  14. #14 Kevin O'Neill
    2013/08/04

    @TGL
    By 1920 most states had passed Workmen’s Compensation laws.Higher accident costs to employers are the major driving force over the past 100 years to increased worker safety. The increased cost to employers is a result of regulatory activity – employers didn’t suddenly feel kind-hearted and pay their injured workers more money.

    Or look specifically at one industry – railroads. The 1893 Safety Appliance Act mandated that trains use improved brakes and couplers. These couplers were already available – but not all railroads used them. They had to be forced to protect their employees.

    Of course on the otherhand, you may be right …. we’ve thrown thousands of children into poverty by preventing them from working in mines and sweatshops.

  15. #15 scatter
    2013/08/04

    I don’t feel this chimes with reality – in my experience the very largest manufacturing companies are the ones lobbying hardest to water down efficiency / environmental regulations and of course they, not the small or medium sized businesses, are the ones with the ear of the legislators so they have considerable success in doing this.

    [Could be. Any point as general as the one I'm trying to make will inevitably have exceptions; perhaps even entire areas of exceptions -W]

  16. #16 Tom Curtis
    2013/08/04

    William,
    1) Including regulations that are designed to constrain big business is only ‘sort of cheating’ if you also exclude regulations designed explicitly (or implicitly) to favour big business as ‘sort of cheating’ as well. Once you or Timmy can come up with a list of regulations falling under neither category, we can discuss this as an empirical question. Without that, you and Timmy (and me) are just formulating the consequences of our axioms (on this point) rather than making empirical observations.

    2) That regulations have by and large been favourable for consumers is more or less self evident to anyone who knows the history of business practices prior to the introduction of extensive consumer protection regulations, ie, in the nineteenth century (or come to that, in a large number of third world nations). It may be less self evident to people who by birth or circumstance now find themselves in the class which has traditionally had the most economic power, and benefited most from the predatory practices of businesses on their fellow citizens. Or put another way, unless you commonly associate as an equal with people who are forced to spend their wages in a company store for high price, adulterated products as a condition of employment (all common 19th century practices in Britain), you are not in a position to see the advantages regulation has brought to consumers.

    [You're being silly. No-one in the cold West is "forced to spend their wages in a company store" in a company store. Are you really stuck in the 19th century? By saying that, you're missing vast swathes of The Point: that competition is a partial alternative to regulation. And that regulation can strangle competition -W]

    3) It is basic economic theory that the market only excludes predatory practices if, for each product, each consumer has an infinite choice of products infinitesimally graduated on all dimensions of consumer preference (not just price); and is sufficiently well informed to place all such choices in rank order (and where there is no coercion, or transaction costs). Even then the unregulated market only reaches the low bar or economic equality known as being pareto optimal, ie, the condition in which we cannot make the destitute better of without making Rupert Murdoch (or Bill Gates or whatever) worse of.

    [Nah, that's nonsense -W]

    Frankly, I don’t see why we should even care if a system is pareto optimal, but more importantly, because real markets fail all of the above conditions (and only approximate them for the moderately wealthy), it follows that real markets are not even pareto optimal and that therefore it cannot be proclaimed from first principles that regulation decreases the pareto optimality of the system, let alone more reasonable notions of economic optimality.

    Finally, and not directed at you, would people please note that everybody is against over regulation. By definition, if you do not consider regulation in a particular area excessive you do not consider it over regulation. I would be nice if people made at least an effort to make statements amenable of rational discussion instead of mere slogans presented in the clothing of truisms.

    [Saying that people are against over regulation is trivially true. So why are you saying it? Saying "people made at least an effort to make statements amenable of rational discussion instead of mere slogans" is gratuitously offensive if directed at the conversation here, and pointless if not; neither speaks well for you -W]

  17. #17 Tom Curtis
    2013/08/04

    William:

    “Any point as general as the one I’m trying to make will inevitably have exceptions; perhaps even entire areas of exceptions”

    Which brings us back to my initial point that the argument is far to general to be correct. If it inevitably has exceptions, and indeed entire areas of exceptions it has, as formulated, no empirical content. We do not even have any evidence that the exceptions are fewer than the applicable cases, beyond your and Timmy’s feeling that it is so. (Well, mine too, but I attribute that fact to the relative influence of the two levels of business in the political and legal arenas.)

  18. #18 Tim Worstall
    2013/08/04

    “In the United States, when general talk is of ‘regulating’ business the two agencies that are usually the target are the EPA (Environmental Protection Agency)”

    There’s an interesting example from my trade of that. EPA regs on copper smelters mean that no one’s ever going to build another one in the US. Waaay too tough to meet them: especially since all of the extant plants are grandfathered in. So, the extant plants can be sure that they’ll never face any domestic competition.

    That’s not actually a desired result from the EPA’s regulation…..

  19. #19 Hank Roberts
    hankroberts.wordpress.com
    2013/08/04

    You’re echoing the complaint made by the coal industry, which also has long had loopholes written into the clean air laws for “grandfathered” plants. That’s how sausage, I mean, law and regulation are made in the USA. It took a Supreme Court decision to begin controlling pollution from those plants.

    Going after the “grandfathered” plants is of necessity a separate legal issue — “separate” in the legal sense. That’s also how the sausage, I mean the law, is written.

    And the EPA, when administered by someone smart enough to know the setup, does act on those copper smelters, because “grandfathered” does not mean exempt from all regulation.

    So how to do that? The EPA administrator has the authority to regulate where she finds a problem that “… may reasonably be anticipated both to endanger public health and to endanger public welfare.” And does so — when Congress allows.

    You write that the regulations are ” Waaay too tough ” but you don’t say which ones you’d deregulate. Lead? Arsenic? What level of those do you find too tough to control? The other stuff is controlled as a side effect of taking the really nasty toxics out of the smoke.
    http://www.npr.org/blogs/thetwo-way/2011/11/17/142439081/epa-takes-action-against-toxic-arizona-copper-plant

    And so it goes, slowly. As with science, progress is demarcated by funerals.

    “If you think that you can think about a thing inextricably attached to something else without thinking about the thing which it is attached to, then you have a legal mind”
    – Justice Ginsburg, quoting the late Professor Thomas Reed

    And yes, industry moves the bad behavior offshore. Just as when California regulates something, first the manufacturers try moving to another state. Then they try federal preemption of the state regulation for ‘economic efficiency’ to set a cap on the regulations to cut them back.

    That’s an argument for better worker protection, better air quality laws, enforcement, and public health action everywhere.

    And why public health? Because having parents who are rich or poor makes no difference in potential, the genetic lottery shuffles the deck with each generation and genius emerges — from rich or poor. And we need every child with genius to emerge from the clutter and have a fully productive, engaged life.

  20. #20 Steve Milesworthy
    2013/08/04

    The reason Wonga rates are “too high” is because they cause damage to many of the people that use their “services”. It is not related to their profitability or otherwise. Regulations capping interest rates would be about stopping the business – akin to regulations about prescription drugs, perhaps.

    Allowing the likes of Wonga to be around in many cases allows people to either put off their problems (not solve them) or to create problems that did not already exist.

    [If you don't think Wonga are making excess profits then you think their rates are "fair". That leaves you only with the "Oi you peasants: no, you cannot have access to that service, I know better than you" type approach. Which is hard to sell to the oiks directly; I'd approach it in a roundabout way if I were you -W]

  21. #21 Hank Roberts
    hankroberts.wordpress.com
    2013/08/04

    > looking at the fundamental underlying problem is too hard,
    > so we just get more pointless regulation -W]

    Precautionary principle of any use to you there?

    —–
    MIT’s Carl Wunsch: “Climate is far more complicated than the world economy, yet supposedly reputable journals are publishing papers that superficially look like science, but which are the sort of thing scientists will speculate about late at night over a few beers.”
    http://www.csmonitor.com/Environment/Bright-Green/2009/1006/stop-burning-fossil-fuels-now-to-warm-earth-later/%28page%29/2

  22. #22 Eli Rabett
    http://rabett.blogspot.com
    2013/08/04

    Businesses favor regulations that limit their suppliers and competitors, not themselves. Simple tautology.

  23. #23 Tom Curtis
    2013/08/05

    Goodlocust @10 “A straw man argument. I’m against over-regulation because I’m against poverty and for innovation.” (my emphasis)

    Me @16 “By definition, if you do not consider regulation in a particular area excessive you do not consider it over regulation.”

    WC inline @16 “Saying that people are against over regulation is trivially true. So why are you saying it?”

    It would help if William would read the comments. GL’s comment was a truism turned into a slogan. It is not offensive to point that out. I might add, William complaining about people being offensive is ironic to say the least.

    Speaking of which, William’s response that some straightforward (and standard) economic theory is “absurd”, and his insistence that the discussion only treat of examples of over regulation, and not consider the fact that there can be (as has been proven by sad example) under regulation indicates he is only interested in pushing an ideological barrow. I don’t believe in wasting my time persuading ideologues.

    [If you're going to put something in quotes (like your 'absurd') it should be a quote. But I didn't say that - I said nonsense. And what I called nonsense was your It is basic economic theory that the market only excludes predatory practices if, for each product, each consumer has an infinite choice of products infinitesimally graduated on all dimensions of consumer preference (not just price). And I'll stick with that. You've made it up, or copied it from an unreliable source. Feel free to prove me wrong -W]

  24. #24 David B. Benson
    2013/08/05

    http://dotearth.blogs.nytimes.com/2013/07/18/a-u-s-battery-recycler-says-we-should-keep-the-lead-in/
    Here is the president of a ‘big company’ pressing for additional regulation. I certainly agree with him.

    So should you.

    [So what? You seem to be under the impression that I'm calling for the repeal of all regulation; or against all future regulation. Since I've said neither, and believe neither, I'm baffled as to why you'd think that -W]

  25. #25 Hank Roberts
    hankroberts.wordpress.com
    2013/08/05
  26. #26 David B. Benson
    2013/08/05

    Here is another example of the lack of enforced regulation:

    My husband Jim and I have worked as meat inspectors in slaughter facilities for the United States Department of Agriculture
    +for almost 30 years. When Jim noticed that some pigs weren’t completely stunned before slaughter — some still fully
    +conscious as they were hung upside down and bled out — he told his supervisor. But his report was ignored and a week
    +later Jim was ordered to start working at a different plant 120 miles away.

    Now my husband has to live out of a hotel room and can only come home on weekends. And with our oldest daughter pregnant
    +and due in a couple of months it’s not fair to keep him away.

    My husband should not be penalized like this for reporting inhumane conditions. I’ve heard of other whistleblowers starting
    +petitions on Change.org so I started my own asking the USDA to move my husband’s job back home. Click here to sign. Click
    +here to sign.
    https://www.change.org/petitions/help-a-meat-inspector-punished-for-reporting-inhumane-conditions?utm_source=action_alert&u
    +tm_medium=email&utm_campaign=30503&alert_id=qNOuYsZrvG_SALGjkZvjr

    My husband and I are both proud of our jobs and dedicated to ensuring safer food and basic welfare standards for animals.
    +By reporting what he saw happening to pigs Jim was not only doing his job, but also looking out for the safety of his
    +co-workers who are sometimes injured by still-conscious animals.

    The USDA is feeling pressure from whistleblowers like my husband. If people like you continue to speak out against
    +punishing workers for doing their jobs and more people become aware of these despicable practices, the USDA will be forced
    +to examine their policy of ignoring animal welfare concerns.

    Stand with my husband and sign my petition demanding that the USDA stop penalizing Jim and relocate him home. Click here
    +now.
    https://www.change.org/petitions/help-a-meat-inspector-punished-for-reporting-inhumane-conditions?utm_source=action_alert&u
    +tm_medium=email&utm_campaign=30503&alert_id=qNOuYsZrvG_SALGjkZvjr

    Thank you for your support,

    Tammy Schrier
    Washington, Iowa

    [Sigh. See my inline response to #11 -W]

  27. #27 Hank Roberts
    hankroberts.wordpress.com
    2013/08/05
  28. #28 Steve Milesworthy
    2013/08/05

    > [If you don't think Wonga are making excess profits then you think their rates are "fair". That leaves you only with the "Oi you peasants: no, you cannot have access to that service, I know better than you" type approach. Which is hard to sell to the oiks directly; I'd approach it in a roundabout way if I were you -W]

    It’s about their rates, their methods of operation, their methods of advertising, the relationship with other businesses…

    I know a few potential customers for Wonga services. They’re not oiks or peasants, but they don’t understand money, really.

  29. #29 Steve Milesworthy
    2013/08/05

    Getting to the point: the Telegraph seem quite good at finding angles to a story that turn things on their face or twist things into an attack on things they hate.

    For example, on Monday it was how “Brussels regulation” forced MPs to get rid of their loyal flower arranger because she had to re-bid for her contract, and lost to a more competitive bid.

    This article seems a typical example – no evidence. Just a vague idea plus a claim that “big business” can deal with the regulation and therefore it is unfair to small businesses that can’t.

    But I can also remember lots of stories from big businesses about how new regulation was too expensive and complicated to implement – followed, of course, by the regulation being enforced and the world becoming a better place for the rest of us (e.g. rights to transfer telecoms, banking, utility providers; transparent pricing; better insulated homes; more efficient consumer goods; less electronics waste in landfills)

    So these stories are a waste of time without specifics.

  30. #30 Andrew Dodds
    2013/08/05

    Of course, Mr Nice-but-Dim does not make a point, he states an opinion (although in this thread he does back it up with an anecdote, of course). There is a difference, although those of us with a more cynical disposition would suggest that economists don’t tend to see it.

    (Lest I be accused of ad-hom, I’d point out that Mr TW has an awful record when it comes to making or defending his positions, and can therefore be said to be in need of a gentle prod or two. In my opinion, anyway.)

    A better proposition would be : ‘When large corporations are allowed to draft regulation, that regulation will favor selfsame large corporations’. However, you won’t see that one being put forward as much, because the obvious implication – that a firewall be put in place between corporate money and political influence – would upset our supposedly anti-regulation crusaders.

    It is regulation that got kids out of mines, gave us paid holidays, that means consumer electronics are safe to handle, you food is fairly safe to eat, your airline maintains it’s fleet of aircraft.. or more generally, protects both provider and consumer in the case where short term cost cutting by the provider ends up hurting both.

    BSE is an excellent example of where removing a regulation caused a disaster for the industry involved and only luck stopped it being a catastrophe for the consumer. Allowing the building societies to demutualise .. how’d that go again?

  31. #31 dave s
    2013/08/05

    Not just big business: for example, a lot of small businesses loved Retail Price Maintenance (RPM) which meant they competed on local availability and quality of service rather than price.

    Some didn’t love it: there was this guy Branson selling so-called “Virgin” records one storey up from a ground floor clothes shop, who got attention by disregarding RPM and selling records slightly cheaper.

    When RPM ended, goods got cheaper and many smaller retailers went to the wall. Generally popular, but with recent developments such as the increasing domination of Amazon it has its worrying side.

  32. #32 Dunc
    2013/08/05

    I think there is far too much [regulation]

    What on Earth does this even mean? Is there some means of determining the optimum quantity of regulation, without regard to its content? What units would that be measured in? Would you care to take a stab at saying what you think this optimum quantity of regulation might be? You obviously must have some idea, and it clearly must lie somewhere between the amount we have now (“far too much”) and none at all, but could you be a little more specific? I’m fascinated.

  33. #33 TheGoodLocust
    2013/08/05

    @Kevin O’Neill [quote]By 1920 most states had passed Workmen’s Compensation laws.Higher accident costs to employers are the major driving force over the past 100 years to increased worker safety.[/quote]

    And I have no problem with worker’s being able to sue for damages done to their own bodies. After all, a person owns their own body, it is “property,” and any damages done to it should be compensated.

    This is essentially an issue of property rights – not of regulation.

    I do have a problem if the person who has to pay those damages must be forced to pay without due process.

    [quote]Of course on the otherhand, you may be right …. we’ve thrown thousands of children into poverty by preventing them from working in mines and sweatshops.[/quote]

    Morality isn’t as black-and-white as you seem to think.

    http://en.wikipedia.org/wiki/Sweatshop

    “On three documented occasions during the 1990s, anti-sweatshop activists in rich countries have apparently caused increases in child prostitution in poor countries. In Bangladesh, there was a closure of several sweatshops which had been run by a German company, and as a result, thousands of Bangladeshi children who had been working in those sweatshops ended up working as prostitutes, turning to crime, or starving to death. In Pakistan, several sweatshops, including ones run by Nike, Reebok, and other corporations, were closed, which caused those Pakistani children to turn to prostitution. In Nepal, a carpet manufacturing company closed several sweatshops, resulting in thousands of Nepalese girls turning to prostitution.”

    @Tom Curtis [quote]GL’s comment was a truism turned into a slogan. It is not offensive to point that out.[/quote]

    If that comment was a truism then what does that say about the argument I was responding to?

    It says it was a falsism.

  34. #34 Hank Roberts
    hankroberts.wordpress.com
    2013/08/05

    Here’s a good one:

    “Xcel issued this anti-net metering proposal last Wednesday, July 24th as part of its annual Renewable Energy Standard Compliance Plan. Here are the details:

    “Step 1: First, Xcel wants the Public Utility Commission (PUC) to allow them categorize net metering as a subsidy, and a big one at that. It is important to note that Xcel wants to calculate this ‘subsidy’ by counting each and every kilowatt-hour (kWh) of solar produced from rooftop systems, and multiplying it by a rate that Xcel has internally calculated (see Table 1 below for the exact ‘subsidy’ rates Xcel is proposing). They aren’t just targeting energy exported to the grid; they all looking at all the energy a solar customer produces, even the energy that is used onsite at a customer’s house to serve their load. This is similar to Xcel saying that when a family’s kids go off to college and that household uses less energy, or when a home-owner installs energy efficient windows, that the reduction in energy usage should be counted as lost revenue that Xcel is entitled to collect….”

    [I'd have preferred it if they'd provided a direct link to Evil Xcel's proposal, rather than just letting me read their paraphrase. Certainly in the UK the economics of home solar installations are weird: the govt mandates a huge subsidy based on units generated. I'm not quite sure who pays that; probably the power companies: they certainly have to do the paperwork. If so, they have a clear incentive to minimise solar installations -W]

  35. #35 David B. Benson
    2013/08/05

    So the Federal Register contains some words following a title of

    Regulation X

    If it is not enforced, it is merely words and not an actual regulation. A call for more regulation, at least in North America, does not necessarily mean some federal bureaucrat writing yet another paragraph in the Federal Register; sometimes it simply means that the existing ones need to be enforced.

    *Sigh*

  36. #36 Hank Roberts
    hankroberts.wordpress.com
    2013/08/06

    > Direct link.

    This ought to be that direct link. The 2013 proposal wasn’t there when I last looked. Got one for 2012, got one for 2014. Dunno.

  37. #37 Tim Worstall
    2013/08/06

    “It is regulation that got kids out of mines, gave us paid holidays, that means consumer electronics are safe to handle, you food is fairly safe to eat,”

    Not actually true. The US has no right at all, no legal insistence that is, for paid holidays. Yet pretty much everyone in full time long term employment does get paid holidays. We can therefore conclude that while we might have regulation in the UK insisting upon paid holidays, such paid holidays would still exist without the regulations.

    And as to food, sure, mid-19th cent. food quality was horrendous. In the UK at least this led to manufacturers competing on the quality and safety of said food. The standards rose about a decade before the legislation appeared insisting upon those standards. From which we can conclude that protecting the value of a brand is a valid method of ensuring food quality.

  38. #38 Steve Milesworthy
    2013/08/06

    Tim: “Yet pretty much everyone in full time long term employment does get paid holidays.”

    1. In the EU you get at least 20 days plus official holidays. In the US I understand it is typically 10 days (plus official holidays I assume???).

    2. Many people are being forced into becoming contractors in a way which absolves the employer of the right to paid holidays etc (carers, delivery drivers, supply teachers, Sports Direct staff, MPs flower arrangers…). That is probably an example where big business can avoid legislation that a small business cannot.

  39. #39 Edim
    2013/08/06

    “I find it so amusing when the conspiracy theorists talk about how “Big Oil” is vociferously opposing global warming when they’ve been benefiting the most from all the subsidies and regulations passed in the name of fighting it.”

    Yes, very amusing. All the Bigs loved the bandwagon.

  40. #40 Dunc
    2013/08/06

    he US has no right at all, no legal insistence that is, for paid holidays. Yet pretty much everyone in full time long term employment does get paid holidays.

    “Pretty much everyone” != “Everyone”. Also, please define “long term”. Further, I take it that you are aware of the tendency amongst many employers to ensure that almost none of their employees legally qualify as full-time?

    So, what your statement actually boils down to is that the magic of the free market ensures that everyone gets paid holidays, except for all the people who don’t. But hey, who cares about those losers, huh?

    It’s this sort of hand-waving bullshit that gets you a bad name.

  41. #41 thomaswfuller2
    2013/08/06

    You need to read more of Timmy if you think he ‘relies’ on the IPCC and Stern. Many lukewarmers and skeptics realize that they can show consensus statements to be wrong using the IPCC’s and Stern’s own assumptions. As the consensus won’t even talk about assumptions generated outside the consensus, it’s the only playing field where contact can take place. Ask Timmy about Stern and his discount rate, for example.

  42. #42 TheGoodLocust
    2013/08/06

    David B. Benson [quote]If it is not enforced, it is merely words and not an actual regulation.[/quote]

    And if that were true then that naturally leads to another problem – selective enforcement of regulations.

    In other words, the people who payoff politicians get overlooked regarding enforcement of onerous regulations while their competitors are constantly harassed based on the endless minutia present in these regulations.

    This causes competition to suffer, which will tend to increase prices, lower quality or kill innovation.

  43. #43 Matt
    2013/08/06

    All a bit lacking of specifics as noted by others including WMC. Easy to point out examples of over and under-regulation. Interesting topic though. Can Tim and WMC state their best examples (on big issues) of over and under-regulation? Also, best way to deal with climate change (guessing regulation via carb tax)? Comments on gfc?

  44. #44 Michael Hauber
    Brisbane
    2013/08/07

    It seems to be widely accepted as true from the limited economics that I have studied that without regulation big businesses would apply anti-competitive behaviour without limit to set up destructive monopolies in all markets. A blanket statement that more regulation always favours big business is nonsense.

    [I think you're economic theory is wrong. Adam Smith certainly said "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices" but that's not what you're saying: you're adding "and they will inevitably succeed" (and I think you meant to say "cartel" not "monopoly"). But there is nothing (AIUI) in economic theory to say that they will succeed, or that regulation is the only answer.

    And lastly, I didn't say that "more regulation always favours big business". Please read more carefully -W]

    Also remember that the people in big businesses and in government that influence legislation do not do so purely for the sake of the best interests of the company or government that employs them, but also act in their own self interest. And what is in the best interests of a specialist in legislation who is likely to be influencing legislation? Complicated legislation that is harder to understand and justifies higher wages for the few people that do understand it.

    [Agreed. But that is also an argument against regulation, not in favour of it -W]

    Off course more regulation than some specific amount (which could be much less than we have now) would be expected to be harmful to small business. And it may be possible that much of the regulation that we currently have favours big business. However at least in Australia there are certainly various items of legislation that favour small business with restrictions or requirements that affect only businesses above a certain size. These include laws on opening hours, payment of tax, financial reporting and audit requirements.

  45. #45 David B. Benson
    2013/08/07

    TheGoodLocust — Can you document any actual examples of this?

  46. #46 Andrew Dodds
    2013/08/07

    Hmmm.

    Tim, may I suggest that you use this wonderful mechanism for searching the vast archives of information available on servers all over the world..

    http://en.wikipedia.org/wiki/Annual_leave

    Which shows how poor the US has it (and notes that some states do have legal requirements). I’d keep the regulation here, thanks.

    As far as food safety goes, market forces might work for acute safety (although there will always be opportunity for the fly by night operator to undercut by ignoring safety), but for chronic issues markets cannot operate. Again, I’d rather have the regulations (fully enforced) than, for instance, see baby milk companies go out of business after killing babies.

    http://en.wikipedia.org/wiki/2008_Chinese_milk_scandal

    The idea that quality will be protected by a brand name might be valid for some premium brands, but it certainly won’t be in budget sensitive cases, and it’s simply another example of wishful thinking by the more libertarian elements. Let’s face it, those milk companies had more than brand value to worry about – public beheading, for instance – but still the problem happened.

    It’s interesting that you skipped over electrical safety.. but that’s a classic, in my opinion. It’s very hard indeed for a consumer to judge the electrical safety of an item at time of purchase, and equally hard to deduce that a particular brand electrocutes 1 in 10,000 users (vs 1 in 10 million for the competitor). Which means that the bad would drive out the good, especially if a lack of regulation means that no one is keeping count.

  47. #47 TheGoodLocust
    2013/08/07

    @David Benson

    You mean the selective enforcement of onerous regulations based on political ideology?

    Here is a fairly recent example:

    http://frontpagemag.com/2013/volpe/gibson-guitar-and-the-politics-of-persecution/

  48. #48 Gator
    2013/08/07

    Locust — you realize you linked to a piece of propaganda, right? There’s no evidence that Obama directed his minions to raid Gibson because of a $1500 donation to the GOP. That is frankly ludicrous, and places you firmly in the tinfoil hat category.

  49. #49 Gator
    2013/08/07

    Locust — just to add — Turns out Gibson had been giving MUCH more to the Rainforest Alliance (>$300K per year). Plus the Gibson CEO was on the RA board. Guess who Gibson was using to rubber stamp that their wood imports were legal?

    http://www.fsc-watch.org/archives/2011/10/05/Gibson_Guitars_fiasc

  50. #50 TheGoodLocust
    2013/08/07

    @Gator

    1. It was far more than $1500.

    2. The amount of the donation is irrelevant if it sends a message to companies that if they donate to Republicans then they’ll get harassed.

    3. Suppressing donations might not have even been the intent – the motivation could’ve been suppressing competition for an Obama supporter. Reminds me of how stimulus funds had an interesting way of finding the pockets of Obama donors.

    4. If Gibson was using the “wrong wood” then other companies using it should’ve been targeted as well.

    5. If it is so “tin-foil” hatty then perhaps the Obama administration shouldn’t send the IRS after conservative organizations.

    Ah never mind, they pleaded the 5th on that one so clearly there is nothing to see there either.

  51. #51 David B. Benson
    2013/08/08

    TheGoodLocust — Find a less tainted example.

  52. #52 TheGoodLocust
    2013/08/08

    @Benson The examples weren’t tainted, but I can understand why Obama supporters wouldn’t like them.

    Try these if you like:

    http://www.sciencedirect.com/science/article/pii/S1755309111000037

    http://books.google.com/books?id=gG0q3Zup5iQC&pg=PA259&lpg=PA259&dq=over-regulation+africa+bribes&source=bl&ots=xAJbC-ooZR&sig=Hx4LAJPSTRi10LvI9Z5PbqlmGlw&hl=en&sa=X&ei=yxQDUvKMM-bkiwK-0IGoBA&ved=0CC0Q6AEwAA#v=onepage&q=over-regulation%20africa%20bribes&f=false

    Overregulation is positively correlated with a larger unofficial economy and with a larger incidence of corruption.

    I’m honestly surprised that you are arguing that selective enforcement of regulations doesn’t happen. It is such a widespread and well-known phenomena.

  53. #53 J Bowers
    2013/08/08

    W – “But unlike many he mostly knows his limits on the latter”

    Except when he’s writing for Forbes.

    [Yeeees, and he's been getting a bit worse recently. I'm not putting him forward as a paragon of climate science understanding, but he is an awful lot better than many. Generally speaking he is prepared to accept Stern's numbers, for example -W]

  54. #54 J Bowers
    2013/08/08

    Regulations create jobs.

    [But remember, jobs are a cost not a benefit -W]

    Almost the entire motorbike helmet industry is the fruit of regulating motorbike riding for health and safety reasons. The biggest complaints from businesses, large and small, about environmental regs is the lack of consistency in interpretation among central government and local authorities. Otherwise, they see a rise in sales the greener they can say they are in their sales pitches and marketing.

  55. #55 Gator
    2013/08/08

    Locust -
    1. No, the money the CEO was donating was peanuts. You can look it up yourself. You should, because you won’t believe me.

    2. You’d think then that Obama the villain would go after people like the Koch brothers, instead of pissant Gibson.

    3. Or the intent could have been enforcing the law. The government is composed largely of civil servants who actually have careers and integrity, and don’t just jump at the new dog in the White House.

    4. Gibson was giving “gifts” >$300K per year! to the Rainforest Alliance, the people who were certifying their wood. The government had emails showing Gibson knew there were issues about the wood. Perhaps that had something to do with the raids.

    5. They didn’t. Tin foil hat time!

    Take off the right-wing blinders. Rightwingers love to talk about “playing the race card” — but they are the first to claim political persecution anytime things don’t go their way. Gibson paid a huge fine, lost the wood, and wanted the settlement kept under wraps. Maybe, just maybe, they were in the wrong.

  56. #56 David B. Benson
    2013/08/09

    TheGoodLocust — Some of us live sheltered lives in parts of the world where (almost) everybody is open, honest and treat each other quite fairly.

  57. #57 Kevin O'Neill
    2013/08/09

    Gator >>5. They didn’t. Tin foil hat time!

    It isn’t tin foil hat tomfoolery (tomhattery?). It’s projection. It’s what they would do.

    Actually, every time a right-winger accuses someone of transgression XXX, I immediately assume *the right-wingers* are guilty of transgression XXX. It makes life much easier and explains sooooo much.

    Look at Tamino’s latest post: A Möurnful Application of Care and Skill It’s a perfect example of scientists lying about the data and colluding to mislead the public about global warming (sea level rise).

    It’s what *they* do, but accuse others of doing.

    They start from an article of faith and believe the ends justify the means. Since they will do anything to “prove” their point or advance their cause, they simply believe the other side plays by the same rules.

    It’s simply not in their DNA to believe that many people approach life in a different manner.

  58. #58 Gator
    2013/08/09

    > [But remember, jobs are a cost not a benefit -W]

    And this is exactly why I don’t care if big business cares about regulation. I care about the world I live in, the world my children will live in. I want businesses to be a non-harmful part of that world. Business just wants money.

    [My point was that writing "I like regulation because it creates jobs" is a viewpoint that simply fails, if you're trying to talk to economists, or indeed anyone with a clue about economics. Its fine if you're in a walled garden. Just as the Watties are fine in their walled garden, they can say "Al Gore is fat therefore global warming is wrong!" and no-one will correct them. It doesn't make them correct, however, just parochial -W]

  59. #59 Steve Milesworthy
    2013/08/09

    > [But remember, jobs are a cost not a benefit -W]

    But the example given by J Bowers was an example of good regulation that promotes innovations in safety that saves lives and reduces costs of death and injury.

    It was not a claim that regulation is good just because it creates jobs.

    [JB started "Regulations create jobs". That is clearly intended as a *positive* for regulation. It doesn't say its the only benefit - and I'd certainly hope that no-one would attempt to make that claim. Nonetheless, its mistaking a cost for a benefit -W]

  60. #60 Hank Roberts
    hankroberts.wordpress.com
    2013/08/09

    How is the pale blue dot -not- a walled garden?

  61. #61 Gator
    2013/08/09

    [My point was that writing "I like regulation because it creates jobs" is a viewpoint that simply fails, if you're trying to talk to economists, or indeed anyone with a clue about economics. Its fine if you're in a walled garden. Just as the Watties are fine in their walled garden, they can say "Al Gore is fat therefore global warming is wrong!" and no-one will correct them. It doesn't make them correct, however, just parochial -W]

    My point is that what economists think is good for business may not be good for the 99% of the rest of us. Does that make them parochial, or us? Maximum company profit does not equal maximum “good”.

    Creating jobs may indeed be a net positive if it means more people have money to spend on the goods made by companies.

  62. #62 Eli Rabett
    http://rabett.blogspot.com
    2013/08/09

    OK, yeah, the lack of helmets leads to increased economic activity in the medical and legal areas, which is why simply going with the [ ] may not be good for anybunny’s health

  63. #63 TheGoodLocust
    2013/08/10

    @Gator [quote]1. No, the money the CEO was donating was peanuts. You can look it up yourself. You should, because you won’t believe me.[/quote]

    I used the same link that you did. It was far more money than what you said, but as I said, the amount really is irrelevant.

    [quote]2. You’d think then that Obama the villain would go after people like the Koch brothers, instead of pissant Gibson.[/quote]

    I never said Obama directed anything. It is more likely that some ambitious political hack set it in motion like with the IRS scandal (at least I hope it went down that way).

    [quote]3. Or the intent could have been enforcing the law. [/quote]

    If that was the case then they would’ve been going after everyone equally.

    [quote]4. Gibson was giving “gifts” >$300K per year! to the Rainforest Alliance, the people who were certifying their wood. [/quote]

    Extortion from environmentalists organizations is nothing new.

    [quote]5. They didn’t. Tin foil hat time![/quote]

    They did plead the 5th amendment. The directions came from Washington DC – they lied about it coming from low-level officials in Philly.

    [quote] Maybe, just maybe, they were in the wrong.[/quote]

    That’s a possibility.

    Perhaps when we get a president and an attorney general who aren’t some slimy amalgam of political hack and race hustler then we can get to the bottom of such things.

    @Benson [quote]Some of us live sheltered lives in parts of the world where (almost) everybody is open, honest and treat each other quite fairly.[/quote]

    I’d love to know what part of the world you live in where people apparently don’t get thrown in jail for using harmless recreational drugs (another set of stupid regulations) and where men can’t be indebted to women for life via alimony.

    @Kevin [quote]Actually, every time a right-winger accuses someone of transgression XXX, I immediately assume *the right-wingers* are guilty of transgression XXX. It makes life much easier and explains sooooo much.[/quote]

    And every time a left-winger starts throwing broad generalizations about right-wingers then I assume they just lost an argument.

    In this case I don’t even have to assume.

  64. #64 David B. Benson
    2013/08/10

    TheGoodLocust — In the State of Washington possession of small quantities of mary-jane is now legal and soon it will be legal for anybody, 21 or older, to sell small quantities. It is still against federal law but the state authorities are requesting the DEA not enforce that *stupid* federal law and go after the serious meth users and makers. The latter is a serious problem from the Columbia River west; I don’t know about over here.

    Alimony is a good thing. All too many women have no decent job prospects much less actually interesting careers.

    However, I was only referring to far eastern Washington state, especially south of Spokane.

  65. #65 Gator
    2013/08/10

    OK, last comment to Locust.
    Me –”4. Gibson was giving “gifts” >$300K per year! to the Rainforest Alliance, the people who were certifying their wood.”

    Locust — “Extortion from environmentalists organizations is nothing new.”

    If you’re going to bring up a case you should at least study it first.

    Gibson wasn’t being extorted by environmentalists. The Gibson CEO was on the board of Rainforest Alliance. This was part of Gibson’s scheme of assuring that they were buying wood legally. Turns out that having a tame agency to rubber stamp your wood doesn’t actually help you in the long run. Since your auditor is not really independent, you don’t have anyone to tell you that you are breaking the law.

    Meanwhile all Gibson has to do is play the Obama card and right wing idjits the length and breadth of the US get all breathless whining about the president and AG. Gibson got themselves into this mess.

  66. #66 TheGoodLocust
    2013/08/10

    @Benson

    1. The Federal government has increased raids of medical marijuana dispensaries to very high levels since Obama’s election.

    Of course, as a democrat he cares little for state’s rights.

    2. Alimony is a highly abused and an unfair system. There are numerous cases where a man has had to pay large chunks of his earnings to a woman for the rest of his life even though they were only married for a few years.

    Alimony is often awarded to woman who make high salaries at their own jobs because the courts say “They should be able to live at the lifestyle to which they’ve become accustomed.”

    Of course, apparently the ex-husband doesn’t get to live according to the lifestyle he has become accustomed to and actually works for. Nope, that privilege only goes to the woman for some odd reason.

    But it gets even better, if the man remarries then his ex-wife will take him to court to get alimony payments INCREASED based on his new wife’s income. This money even comes at the expense of any new children from the new marriage – the ex-wife apparently has a higher priority for the money earned by other people than the mother of the new children.

    And, of course, there is the widespread fraud in the alimony system, where ex-wives will co-habitat with men instead of re-marrying because re-marriage would end their lifetime extortion racket.

    So please, tell me again how this lifetime alimony system is so great in a society which claims men and women are completely equal.

    A better system would be to only give alimony payments to keep a woman above the poverty line and/or only for a few years so she can get education and training to support herself.

    As it stands now, a man can’t get away from it. The woman will get part of his Social Security payments to supplement her own Social Security payments of the same amount.

    @Gator I’ve read several articles which cast further doubt on your claims.

    1. That the so-called “incriminating” emails were taken out of context.

    http://hotair.com/archives/2011/09/01/environmentalist-groups-vouch-for-gibsons-commitment-to-forest-preservation/

    2. And again, if it was the wood that was the problem then other people using it should’ve been raided too.

    http://hotair.com/archives/2011/08/30/another-interesting-tidbit-in-the-gibson-guitar-saga/

    If Gibson was such a bad player then it is certainly interesting how so many environmentalist organizations have praised their practices like Greenpeace.

  67. #67 Hank Roberts
    hankroberts.wordpress.com
    2013/08/10

    http://www.nytimes.com/2013/08/09/opinion/krugman-phony-fear-factor.html?src=me&ref=general

    “… anything that might hurt the privileged, such as higher tax rates or financial regulation, can be denounced as job-killing because it undermines confidence, and hence investment. But if the government can create jobs, confidence becomes less important — and vested interests lose their veto power.

    Kalecki argued that “captains of industry” understand this point, and that they oppose job-creating policies precisely because such policies would undermine their political influence. “Hence budget deficits necessary to carry out government intervention must be regarded as perilous.”

  68. #68 Kevin O'Neill
    2013/08/10

    @TGL – OK, I was wrong – you *are* a tin foil hatter.

    Google search “J. Russell George IRS house oversight”

    Read a small selection of the results from mid-July forward.

    The IRS did not selectively target Tea-party groups. They were going after “Progressive” and “Occupy” groups at the same time. The IG that *prevented* this information from reaching the public is a Republican Bush-appointee.

    Now, politics *did* enter into the ‘scandal’ — but of course you’re 180 degrees wrong. A Republican only allows information to be released so that it portrays the IRS as a bureaucratic tool and extension of the Democratic Party. *That’s* when politics enter in. The scandal was always about politics – and the GOPs willingness to lie about anything. You either applaud it or fall for it hook, line, and sinker every time.

  69. #69 markus
    uk
    2013/08/11

    hi,

    I try and pop in here to pick up on the undercurrents and crossflows in the world of climate science, its always interesting to read about what is currently ruffling feathers.

    I don’t often comment on RC, or here, cos most posters are far better informed, on climate science, than me.

    But I know a bit about economics and economic history, so here is my tuppence worth.

    Firstly, it might be more meaningful to specify the country we are talking about first. The US and the UK have different levels of regulations in different markets, but I think most people would characterise the US as generally having less regulation (although this is not always the case as, for example, in the financial markets).

    Secondly, why has no-one related this subject to our recent economic woes, and whether we may draw any lessons that might have some relevance, to William’s suggestion that we are over-regulated?

    So, I’ll get the ball rolling… Its a great time to take an interest in economics because we have seen, since 2007, a real test of the free market orthodoxy(from Adam Smith to Milton Freidman, via Vienna and Chicago),which has held sway since the the Thatcher /Reagen era.

    The bankers said that a freer market, using ‘light touch’ regulation was the route to success. Politicians of both sides bought into this idea and brought down the barriers (Thatcher’s Big Bang, Clinton’s dismantling of the Glass-Steagell Act in the US etc).

    Well, as we are paying through the nose to bail the financial industry out, I would suggest that the ‘freeing up’, from regulation, of those markets, was not a success.

    So I think the arguments about about how ‘free’ markets should be (and by extension Williams question), are clearly very important today, but I feel the zeitgeist is clearly in favor of putting the Genie back into the bottle, as was attempted (with some success) on Wall Street in the 1930′s (see JK Galbraith).

    My feeling is that it is not a question of more or less regulation in general, but the getting right regulation on a case-by-case basis, and that an ideological viewpoint does not help one bit.

    I don’t know who said, ‘the markets make a great servant, but a terrible master’ but I think they had a point.

    Willia a UK resident with an interest in economics William must be

  70. #70 TheGoodLocust
    2013/08/11

    @O’Neil http://www.nationalreview.com/article/354080/smearing-j-russell-george-eliana-johnson/page/0/1

    The accusations contradict the obvious facts: The 14 BOLO lists Levin released, though they contain the term “Progressive,” instruct IRS screeners to treat the applications of progressive organizations differently from those of tea-party groups. In George’s words, the “Progressive” entry “did not include instructions on how to refer cases that met the criteria,” whereas tea-party cases were automatically sent to higher-ups in the agency for coordination with Washington, D.C. The “Occupy” entry to which Cummings refers instructs screeners to send cases to the same group processing tea-party applications. The head of that group, though, told Congress that when she received applications from liberal groups, she sent them back to “general inventory.” George on Thursday told the House panel that, of the 298 cases scrutinized for political activity, zero fell under the “Occupy” rubric. The “Progressive” and “Occupy” listings may be problematic — it is not clear why the terms were added to the list — but the political activity of liberal groups simply was not put under the microscope.

    In advancing this narrative, Democratic lawmakers have succeeded in distorting the issue beyond recognition.

    And again – Ms. Lerner pleaded the 5th.

    But who knows, I may be wrong, I certainly don’t have all the facts, but calling me a “tin-foil hatter” is quite the stretch.

  71. #71 TheGoodLocust
    2013/08/11

    @Markus [quote]The bankers said that a freer market, using ‘light touch’ regulation was the route to success. Politicians of both sides bought into this idea and brought down the barriers (Thatcher’s Big Bang, Clinton’s dismantling of the Glass-Steagell Act in the US etc).

    Well, as we are paying through the nose to bail the financial industry out, I would suggest that the ‘freeing up’, from regulation, of those markets, was not a success.[/quote]

    If a person gets rid of one regulation and then adds ten more then that isn’t “deregulation” – the fanfare regarding that one instance doesn’t increase its impact.

    In the US, the sum of regulations has increased every single year. I’d also argue that the bailouts made things much worse by saving inefficient businesses, inflation and crowding out effects.

  72. #72 markus
    uk
    2013/08/12

    @ Good Locust

    Its difficult for me to argue, with much authority, about the situation in the US, but I understand that Clinton was not a ‘natural deregulator’ like Thatcher or Reagan, so I understand your point about his overall contribution. But I think that the worst financial crisis since the 30′s is a pretty big impact, even if the dismantling of Glass-Steagell was not the only factor.

    It surprises me that you are suggesting that the overall burden of regulation has increased every single year. Does that really apply to the years when self-declared ‘pro-business’ politicians, like Reagan and the Bushes, were in power?

    [I think one would struggle to measure the "burden" of regulation. But do you really doubt that the *volume* of regulation doesn't just go on increasing? It has to. There are entire departments of people whose only job is to produce regulation. We've locked ourselves into a situation where more regulation is just built into the system. Which when you think about it is weird: why exactly to we need so much new regulation every year? -W]

    If this is so, how far back in US history would you like to go, to get back to a level of regulation that you would be happy with?

    PS I don’t think we could afford to not do the bailouts in the UK. The banks are huge compared to the size of the whole economy, so it would have a an amazingly brave political decision to let them all go to the wall.

    Maybe the US could have tried something different, I recall reading that Bush would have liked to.

  73. #73 markus
    uk
    2013/08/12

    as I had not gone back to the source article that William quotes until now, I didn’t realise that he is getting his economics 101 from the Adam Smith Institute.

    Its not an approach I would recommend at all.

    When I studied Economics in the mid-80′s, our lecturers (at least) tried to present the 2 dominant strands of economic theory, without trying to push students in either direction.

    You will not get that approach at the Adam Smith Institute, the clue is in the name!

  74. #74 TheGoodLocust
    2013/08/12

    @markus [quote]It surprises me that you are suggesting that the overall burden of regulation has increased every single year. Does that really apply to the years when self-declared ‘pro-business’ politicians, like Reagan and the Bushes, were in power?[/quote]

    It does look like I was wrong on regulations increasing every single year. There seem to be a few years where they have actually decreased.

    Under Reagan growth of regulations slowed drastically, but the Code of Federal Regulations only shrank one year (1985) – certainly a feat, but not a sustained effort of deregulation

    Clinton, on the other hand, shrank the overall number of regulations for three consecutive years.

    In any case, here is an interesting read on regulations and their effects on growth:

    http://www4.ncsu.edu/~jjseater/regulationandgrowth.pdf

    Long story short (and obvious) – regulations have dramatically reduced economic growth.

  75. #75 Craig Thomas
    2013/08/12

    Especially those pesky child labour laws of the 19th century – those regulations had a devastating effect on capitalists’ ability to make lots of money by employing poor 10-year-children and paying them virtually nothing.

    In fact, 1865 was a terrible year for regulation: at a swoop a whole bunch of capitalists had their unpaid, whipable workforces regulated out of existence.

    I could go on….

  76. #76 Hank Roberts
    hankroberts.wordpress.com
    2013/08/12

    >dramatically reduced economic growth
    You say that as though it were a bad thing.
    How the economy grows while CO2 decreases remains to be seen. An unregulated economy would have loaded the stratosphere with chlorine and bromine before we had a clue.

  77. #77 Kevin O'Neill
    2013/08/12

    @TGL

    Look at your sources for anything on US politics: National Review, Fox News, etc. These organizations are essentially bought and paid for subsidiaries of the GOP. Try venturing out into the world for something with a little less bias. Leave the echo chamber for a moment.

    Consider that Paul Ryan is a complete blooming idiot. How many articles have these people you quote written about Ryan? How many have even hinted that his math doesn’t add up?

    You have a view. You confirm it with sources guaranteed to reinforce your view. It’s as common as the sun rising in the morning.

  78. #78 Andrew Dodds
    2013/08/12

    Locust -

    That paper is an interesting read..

    The problem is this – where do regulations come from? The impression often given is that Regulations appear at random and for no reason (and can therefore be rescinded at random and with no consequence).

    But, generally, regulations appear (sometimes) because economic activity is having external effects that are not being accounted for and for which accounting is impossible. As Hank mentioned, CFCs were a good example. No doubt the relevant regulation reduced economic growth. Because without the regulations, the NPV of the ozone layer is £0.

    That’s not to say that all regulation is good, obviously, but the argument that All Economic Growth is good, Regulation impedes economic growth, therefore regulation is bad is a bit simplistic. Indeed it’s worse than that, because if you instinctively dislike all regulation then you are very unlikely to get well thought out minimal regulation.

  79. #79 Gator
    2013/08/12

    [I think one would struggle to measure the "burden" of regulation. But do you really doubt that the *volume* of regulation doesn't just go on increasing? It has to. There are entire departments of people whose only job is to produce regulation. We've locked ourselves into a situation where more regulation is just built into the system. Which when you think about it is weird: why exactly to we need so much new regulation every year? -W]

    I’ve been involved in a minor way in updating regulation affecting the airline industry in the US. In this industry regulation is changed because of new technology, changing law, and changes in ideas of what constitutes best practices. “Small” changes take 3 years+ of consideration. Larger changes take place over say a decade.

    Changes to regulation includes the active involvement of the industry. The government bureaucrats I met were all very interested in improving the industry and keeping it safe. With 15 years of involvement I ran into regulations I thought were overkill, but I never thought they were the result of people sitting in rooms just making regulation for the sake of regulation.

    I helped update requirements for a particular type of avionics equipment. The original requirements had been written in 1949. It was time to update to reflect the new technology. ;)

  80. #80 Mal Adapted
    2013/08/12

    TGL:

    Long story short (and obvious) – regulations have dramatically reduced economic growth.

    Andrew Dodds:

    generally, regulations appear (sometimes) because economic activity is having external effects that are not being accounted for and for which accounting is impossible.

    Does anyone else get the sense that TGL hasn’t heard of externalities? Or that he’s heard of them, but that because they can be hard to quantify, he thinks they don’t exist?

  81. #81 Kevin O'Neill
    2013/08/12

    Mal A: “Does anyone else get the sense that TGL hasn’t heard of externalities? Or that he’s heard of them, but that because they can be hard to quantify, he thinks they don’t exist?

    There’s a segment of society that thinks ‘markets good, government bad’ in extremis. If government got out of the way the world would be sooooo much better. Of course this flies in the face of reality on multiple different levels.

    One, you can have 6 billion pages of regulations, but if you never enforce them what have you accomplished? Two, lack of regulation has probably led to far more tax-payer losses than any possible over-regulation. Three, most of the technological innovations of the last century are due to *government* R&D – or corporate R&D funded by the government. This is just a short list off the top of my head.

    And yes, externalities have usually been neglected. Ask a corporation to pay for the repercussions of their business practices/products and you’re promoting onerous regulation. Bah, it’s simple common-sense.

  82. #82 Craig Thomas
    2013/08/13

    Does anyone else get the sense that TGL hasn’t heard of externalities? Or that he’s heard of them, but that because they can be hard to quantify, he thinks they don’t exist?

    Or, because Fox News can’t explain the concept in eight words – that being the usual depth of analysis of anything Fox News involves itself with – then it’s a subject safely ignored because God will take care of it.

  83. [...] I follow David Hone, though not the details. He’s really keen on CCS, and has (I think) a strong commercial interest in it succeeding. But there is no real answer to “its not commercially viable” – and I think it remains non-viable even at plausible CO2-price levels ($80 / tonne is Sternish, no?). So, inevitably, sigh, the talk turns to regulation (um. Does that ring any bells?). [...]

  84. #84 Hank Roberts
    hankroberts.wordpress.com
    2013/08/23

    http://aceee.org/blog/2013/08/friday-night-lights-thanks-doe-it-won

    August 14, 2013 – 12:50pm
    By Joanna Mauer, Technical Advocacy Coordinator, Appliance Standards Awareness Project (ASAP)

    Next time you’re at a night game or in a big box store, look up—if you see bright white lights housed in dome-shaped fixtures, you’re probably looking at metal halide lights. Strong new energy efficiency standards for metal halide lamp fixtures proposed yesterday by the U.S. Department of Energy (DOE) would save businesses and consumers money, and would be a step toward meeting President Obama’s goal of reducing carbon dioxide (CO2) greenhouse gas emissions by 3 billion metric tons by 2030 through efficiency standards.

    DOE estimates that the new standards would yield $3 billion in net savings for businesses and towns and would reduce CO2 emissions by 15–17 million metric tons by 2030. In addition to big box stores, sports fields, and gymnasiums, metal halide lighting is used in a wide variety of applications including warehouses, parking garages, and streets and roadways. The proposed standards would cover metal halide fixtures from 50–2,000 watts.

    The new efficiency standards would improve the efficiency of the ballasts that are used to drive metal halide lamps. Metal halide lamps need ballasts to start the lamp, regulate the current provided to the lamp, and ensure consistent light output. However, ballasts are not 100% efficient—there are always energy losses between the power input to the ballast and the power output to the lamp. This energy loss is wasted energy since it’s not being converted to light, and the losses can be very large—on the order of 10–30% depending on the wattage of the lamp.

  85. #85 Hank Roberts
    hankroberts.wordpress.com
    2013/08/23

    Another case where a regulation would let manufacturers avoid the ‘race to the bottom’ by requiring efficiency levels of all of them.

  86. #86 Hank Roberts
    hankroberts.wordpress.com
    2013/08/27

    http://news.nationalgeographic.com/news/energy/2013/08/130826-six-stealthy-household-energy-hogs/
    Many charging systems use outdated technologies that waste electricity. The state of California has tackled this problem by establishing tougher in-state efficiency standards. Currently the U.S. Department of Energy is working on its own regulations to make the devices more energy-efficient. If California’s standards were adopted nationwide, the savings could be enormous, DiMascio said. “If we improve standards for these battery chargers and external power supplies we could save American consumers about $1 billion annually,” she said.

    … she argues, these devices are an example of where regulation plays the key role. “Nobody right now is going to go out and buy a computer or a cell phone according to how efficient the battery charger is. So in this case the standards are overcoming a market barrier of people not really being able to go out and buy efficient chargers for all of these devices.”

    [I still think this is wrong. You're treating regulation as free (it isn't) and failing to ask why its necessary. That way lies the madness of a vast and ever increasing pile of regulation, and a vast bureaucracy dedicated to producing yet more regulation.

    The key question is why is this necessary? If the answer is (as they appear to suggest) that no-one is prepared to pay extra for a more efficient charger, then why are they trying to force everyone to pay extra for a more efficient charger, when no-one wants that? -W]

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