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While reading Stephen Lacey’s excellent column on Climate Progress about Republican efforts to roll back efficiency standards for light bulbs, I was reminded of something larger that I had wanted to put together for a while.

Regulation is good for business.  Not just for the consumer, not just for the environment.  For business.  

When responding to someone describing the regulatory “burden” placed on business, it’s easy to fall into “Yes, but the cost is worth it to protect …..”

No!

First, never say “Yes, but” because your accepting the premise, already arguing on their terms.

For another, it’s demonstrably false.  Regulation is just the rules, and it’s okay to have them.  In baseball, the strike zone is not a regulatory burden, and the umpires are not parasites on the real “producers.”

Edit: Updated title having thought of something less prosaic.

Let’s start with the aforementioned light bulbs.

The Energy Independence and Security Act of 2007 set efficiency standards for light bulbs.  This is classic regulation – industry has to follow it.  Notably, it was passed with consultation and support from the industry.

“When this bill was passed, it was passed by people who knew how to make light bulbs,” says Randall Moorhead, vice president of government affairs at Philips, a leading light bulb producer. “Everyone supported it. And since then, it’s created more choice for consumers – we have two incandescent bulbs on the market that weren’t there before.”

This regulation achieves some extremely desirable goals in the areas of energy security, consumer protection and the environment.  It was so non-controversial that is passed Congress overwhelmingly and President Bush (yes W) signed it.

The American Council on an Energy Efficient Economy says that the standards would eliminate the need to develop 30 new power plants – or about the electrical demand of Pennsylvania and Tennessee combined.

Bring on the crazy.  Of course, the current congress wants to repeal this regulation, because, well, because it’s a regulation, and regulations are bad.  Never mind that industry was in favor of the regulation, and have tooled up to fully comply.  Never mind the energy savings and environmental benefit.

So, why would an industry actually favor a regulation like this?

To escape the race to the bottom.

In the now-ubiquitous race to the bottom, each company in a market is under excruciating pressure to deliver the lowest priced item no matter how inefficient or unreliable the item’s performance, how badly the workers are treated, or how much the environment is impacted.  If you (a company) won’t save costs then somebody else will, they will get to sell the light bulbs instead of you due to their price advantage, and no matter what your noble intentions, you will be out of business.

Price advantage?  Shrug.  That’s the just the market operating.  If you can’t compete, don’t complain.

No, it’s not a regular market any more.  Specific recent changes have torqued the market so that the forces, always historically present, operate on steroids.  A very notable factor is that “free trade” agreements allow manufacturers to tuck the ugly away in dark corners of the world where you can’t see the birth defects or suicides when you buy your shiny new product.  Produce the product in a responsible but more costly manner, and you’ll be out of business.

Another big factor, pretty easily illustrated with light bulbs, is the Wal-Mart syndrome.  This is the environment where consumers who have been harshly economically stressed are presented with low selling prices as the single and most important thing, the only thing, that matters.  No information about quality or total cost of ownership.  In this vicious cycle, an unemployed or underemployed person will choose the $1 light bulb that eats $5 a year in electricity over the $2 light bulb that uses $3 of electricity a year.  In this environment, a 6 month payback is “long term.”  When you’re broke, it really is.

So a manufacturer of light bulbs literally can’t even try to deliver gains in efficiency unless a level playing field is established.  Back to Lacey’s column:

The reality is, the new incandescent lights were not being made because there was not an economic incentive to make them.

Once you start looking, it’s hard to miss the cases where, absent regulation, companies have to do literally anything, even let people die, in order to survive in their market.  That’s no exaggeration.  Take, for example, the recent estimates of lives which will be saved due to the recently finalized rules on air pollutants from coal power plants (ht – diaries by Mary Ann Hitt and TomP)
EPA estimates are:
The Cross-State Air Pollution Rule will protect communities that are home to 240 million Americans from smog and soot pollution, preventing up to 34,000 premature deaths, 15,000 nonfatal heart attacks, 19,000 cases of acute bronchitis, 400,000 cases of aggravated asthma, and 1.8 million sick days a year beginning in 2014 – achieving up to $280 billion in annual health benefits
$800 million projected to be spent annually on this rule in 2014 and the roughly $1.6 billion per year in capital investments already underway as a result of CAIR..

The new regulation will save 34,000 lives a year at a cost of $2.4 billion a year.  We can do this math.  $70,588 spent per life saved (completely setting aside all the other health benefits).  Sounds like a good and extremely cost-effective regulation.

But consider the flip side, which is where it gets frightening.  These health impacts are known, and they have been known in some version, for a long time.  Yet, the affected industry would not even consider voluntarily spending $70,588 to save a life.  They have to wait until a regulation drags them in to doing it.  Why?

I believe it is some combination of not just the extreme competitive pressure that now exists everywhere, but a cultural lock-in that celebrates that pressure as something that will magically bring good things.  It creates a situation where an executive at a power company would not be allowed to consider spending extra money, even to save lives, unless everyone in the industry is forced to do the same.  

Still, it’s unbelievable.  How could any person in touch with his or her humanity knowingly authorize a budget that excludes investments that could save lives at this bargain rate of $70,588 per life, simply because the exact identity of the people saved is not known?  If they are the ones who get the Box test, I guess we’re all doomed.  Part of it must be fear.  Fear of getting canned for doing the right thing, fear of losing out, fear of not winning.  In some considerable number of cases, it must be that it really is impossible to do what's right, for insurmountable legal, economic, and cultural reasons.

The following bizarre chain of reasoning forces almost everyone in big business to the very edge of what is legal, every time:

-    If it is not expressly prohibited, then it is legal.
-    If it is legal, then it is a legitimate business choice
-    If you don’t make that choice, you will lose advantage
-    If someone else takes that advantage, you will be driven out of business

This is made even worse by the commonly held perception that a company has a legal obligation (to shareholders) to maximize profits.  I can’t imagine that’s a real law – a company is surely obligated to do what its charter states, where making a profit may be one of the missions.  [I looked for a reliable reference to the alleged lawsuit brought by Ford stockholders when Henry Ford increased worker pay to $5 a day, and found lots of discussion of lawsuits, but not about this topic.  The closest I could find was
about dividends.]

What is the solution?  You got it – regulation.  A good regulation, designed to achieve specific goals such as reducing illness and death by air pollution as above, creates a level playing field where people in a business can make good decisions that align their profits to serving their customers and community.

Further, businesses are customers too.  Just like an individual consumer, a business should have a reasonable expectation that their suppliers will not rip them off with shoddy or unsafe products, hidden fees, or any of the shenanigans that regulation should protect us from.  So, regulations help businesses in exactly the same way that they help consumers.

So why have some businesses and business associations like the US Chamber of Commerce worked so hard to build the ideology that all regulation is bad?  There are a bunch of reasons, which starts with the fact that lack of regulation provides huge benefits for the most unethical businesses.  If you are one of those, if there is no limit to the harm you are willing to cause in order to get ahead, you stand to benefit from the race to the bottom.  I think that other businesses have been seduced by the idea that regulation harms them.  Remember when US auto manufacturers succeeded in stopping any increases in mileage standard for a couple of decades, and then imports came in and cleaned their clocks selling cars with better mileage?  I guess that didn't work out so well for the anti-regulators in that case.

Are there regulations that are needlessly complex or stymie one business to benefit another?  You bet.  And, there have been since the guilds of the middle ages and before then.  There will always be scope to streamline and clarify regulations so that the actual goal of the regulation (say, reducing air pollutant emissions or achieving an energy efficiency goal) is front and center, rather than being ruled by the little bits of paper (or little bits of pdf or xml, these days).  What you can do:

-    There really are companies that do good.  You can buy from them.  Especially local suppliers, here are some  in our neighborhood.  Their economic model is that a customer (that’s you!) will recognize their efforts and be willing to spend more to get a product that has healthy and ethical origins.  Beware greenwashing, where a company spends marketing dollars trying to convince you that they are socially responsible (consider ads by ExxonMobil about all the great things they do with the pennies and nickels that drop down through holes in their pockets from time to time).

-    A boycott is a totally legitimate choice in a case where you believe that a company is doing wrong.  Never be swayed by arguments that you will only hurt the lower level employees at that company.  Spend the same money but spend it elsewhere, and you’ll help someone else keep their job.

-    Do the math!  If you can possibly afford it now, buy the better, more efficient product that will save you money, often as quickly as within a few months.  Often this is the product that was made in a more responsible manner.

-    Hunt down the information so that you really can do the math.  Often it’s not at the store but instead is online.  When you get a better deal, you are not only helping yourself but you are doing your civic duty by rewarding quality suppliers and starving shoddy ones.

-    Never, ever, accept the paradigm that regulation is inherently bad.  Not in conversation, not in a forum.  Not in a boat, not with a goat.  Sure, a specific regulation can be bad (craft beer in Wisconsin, anyone?), but each one really does have to be considered on its merits.

-    In your community, advocate for real application of regulations and required permits.  They are NOT a “burden”, they are your chance to protect your family and neighbors.

Originally posted to James Wells on Sat Jul 09, 2011 at 09:20 AM PDT.

Also republished by Community Spotlight.

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Comment Preferences

  •  It really depends on the regulation. (5+ / 0-)

    Some is good, some sucks ass.

  •  Excellent Diary - (7+ / 0-)

    Why are all the Payday Loan offices in the hoodz and not the burbs?
    Why did Cash for Clunkers harm the working poor, help the upper middle class?
    Why do winterization programs mean little if you rent a mobile home,
         but lots if you have a McMansion?

    You are absolutely right about the Wal-Mart syndrome.
    (Not to mention that all the worthless plastic shit they sell ends up in the landfill.)

  •  Zero - that's what the "Help" is for. (0+ / 0-)
  •  How many GOP to change a light bulb? (14+ / 0-)

    CHANGE???

    Tea Parties are for little girls with imaginary friends.

    by J Edward on Sat Jul 09, 2011 at 02:53:13 PM PDT

    •  Darkness? what darkness? (0+ / 0-)

      That light bulb is working perfectly! the Socialists want to put in a Socialist replacement! You can all see what you need to see perfectly well! look at your electric bill, (not readable in the dark) trust me there is a balanced owed! proof the electricity is being used. And you'd better pay that bill or the market will have to cut you off and you don't want that do you!...

      Pogo & Murphy's Law, every time. Also "Trust but verify" - St. Ronnie (hah...)

      by IreGyre on Sun Jul 10, 2011 at 04:02:12 AM PDT

      [ Parent ]

  •  Simple ..... (9+ / 0-)

    39 and 2 DINOS.  Anything to keep from getting to 60 in the Senate.

    'Destroying America, One middle class family and one civil liberty at a time: Today's GOP'

    by emsprater on Sat Jul 09, 2011 at 03:02:05 PM PDT

  •  Yes! Thank you! (8+ / 0-)

    I've been making this argument for years whenever I hear corporations and their political apologists argue that "the market will punish wrongdoers" and therefore industry is perfectly capable of "self-regulating."

    Even assuming Corporation A, making this argument, wants to do what is proper and necessary for his clients, his customers, his suppliers and his employees, he has to know that his competitors just might not be as scrupulous as he.  That lack of scruples can translate directly into an immediate competitive advantage over Corporation A.

    The only rational response is to support a regulatory scheme that establishes at least some baseline regulatory "floor" below which no competitor can be allowed to go.  It is the only way that Corporation A can't be sure that less honest operators in his business don't crowd him out.

    Tipped and recc'd.

    •  Nailed it! Thanks NT (1+ / 0-)
      Recommended by:
      cai
    •  Not to mention, how is the market supposed to know (2+ / 0-)
      Recommended by:
      drewfromct, tacet

      that a company is polluting the groundwater, or selling baby bibs with lead in them (THIS HAPPENED) until after the damage is done?

      If you want to view what the free market will do with weak or un-enforced regulations, just look at the 2008 Chinese milk scandal, where an estimated 300,000 people ate food products contaminated with melamine (deliberately introduced to fool tests for protein content) and six babies died.  

      The contamination was found to have spread to powdered eggs and chicken, baking powder, etc., sold overseas.

      That is your magical free market paradise: a place where food companies poison people, because it's cheaper.

      You can't make a "rational choice" between food that's contaminated and food that's not if you cannot see the contamination.

      That's what regulation is for.

  •  Two (6+ / 0-)

    One to stir the martinis.  And one to call the electrician.

    I used to be Snow White...but I drifted.

    by john07801 on Sat Jul 09, 2011 at 03:20:43 PM PDT

    •  Whew! I thought this was going to be a lame joke (3+ / 0-)

      about needing 4 GOP to hold down the light bulb and 2 to go incandescent and screw it over...until I realized that Lieberman would be trying to insert his own 'bipartisan' agenda for the bulb and socket, and hold the bulb hostage...

      When life gives you wingnuts, make wingnut butter!

      by antirove on Sat Jul 09, 2011 at 04:02:03 PM PDT

      [ Parent ]

    •  Ten (4+ / 0-)
      Recommended by:
      cai, tacet, Calamity Jean, john07801

      One to call the handy man

      One to fire the handyman, and replace him with an illegal immigrant working for sub-minimum wage.

      One to orchestrate a leveraged buy-out of the lightbulb manufacturer, fire the workers, and move the factory to China.

      Seven to flood the media with frenzied reports that it was Liberals' fault that the lightbulb burnt out in the first place.

      Al Qeada is a faith-based initiative.

      by drewfromct on Sat Jul 09, 2011 at 08:09:59 PM PDT

      [ Parent ]

  •  Great Diary. Should be a regulation made ... (4+ / 0-)

    making it mandatory that this diary is posted in every office, school, break room and board room , kitchen and bathroom, library and laundromat in the world.

    :>)

    "But such is the irresistable nature of truth, that all it asks, and all it wants is the liberty of appearing." -Thomas Paine

    by Tommymac on Sat Jul 09, 2011 at 03:39:13 PM PDT

  •  Thanks for this! (1+ / 0-)
    Recommended by:
    cocinero

    Now, we need to print out a bulleted list of current right-wing dogma that also happens to be false (which turns out to be all of it), and nail it to the CoC door at 1615 H Street.

    The world does not need billionaires.

    by targetdemographic on Sat Jul 09, 2011 at 04:01:47 PM PDT

  •  Monopoly without rules.... (4+ / 0-)
    Recommended by:
    HiBob, cocinero, cai, James Wells

    ....is just a bloody fight to grab little plastic hotels and paper money.

    No game is possible without rules.

    Baz

    We are the principled ones, remember? We don't get to use the black hats' tricks even when it would benefit us. Political Compass: -6.88, -6.41

    by bmcphail on Sat Jul 09, 2011 at 04:04:03 PM PDT

  •  I'll never understand the mind of these idiots. (3+ / 0-)
    Recommended by:
    cocinero, cai, IreGyre

    What the hell is wrong with saving energy and money?

    I got a small LED bulb (MalWart had it on clearance) that uses 0.9w, less than 1/4 the wattage of an incandescent 4w nightlight bulb, and it puts out the equivalent of about a 20 watt ib, perfect for what I use it for.
    About 98% more efficient, and it will last five times as long at least, and they can't stand stuff like this. They're all fucking insane.

    Like back shortly after Dumbya became Prez, the fad around here was to upgrade your pickup truck to the biggest honking mofo set of wheels you could 'afford' (getting about 10mpg), preferably a white F250/350 Ford like their hero W drove around the pig farm ranch.
    These fools were buying $40-50K trucks (partly because of a tax write-off), then when Cheney and the oil gang finally screwed us all and drove gas and diesel up to $4 a gallon, a lot of these fools were getting desperate trying to dump their monster fuel guzzling trucks, 'cuz the commute was killing them.
    The prices on such very late model used trucks went so low you could get a 1-2 year old, very fancy, vehicle for about $10-15K (remember, it just sold for $40-50K). The desperation shown through the pages of craigslist for a long time. They got slaughtered taking losses on those deals.
    I know 'cause I picked one up that way, heh, luvved it too many (some of them then became teabaggers much later, poor widdle cretins).  

    "Double, double, toile and trouble; Fire burne, and Cauldron bubble... By the pricking of my Thumbes, Something wicked this way comes": Republicans Willkommen auf das Vierte Reich! Sie Angelegenheit nicht mehr.

    by Bluefin on Sat Jul 09, 2011 at 04:53:24 PM PDT

    •  Are you in Texas? (2+ / 0-)
      Recommended by:
      cai, IreGyre

      Because what you wrote about the oversized pickup trucks certainly describes a lot of folks here in North Texas.

      And even when gas was a buck a gallon, I was never able to understand why anyone wanted to use an F350 as a commuter vehicle.  Because no matter how cheap gas is, it will still handle like a big, heavy truck...not a lot of fun to drive.

      Political Compass: -6.75, -3.08

      by TexasTom on Sat Jul 09, 2011 at 07:17:09 PM PDT

      [ Parent ]

      •  Maybe they want to pretend they're the manly sorts (2+ / 0-)
        Recommended by:
        drewfromct, TexasTom

        who need x amount of towing power and y amount of cargo space.  A daily fantasy of being the Marlboro man.

        Because there are good reasons to own a large pickup, but if you don't work on a farm, or have your business name stenciled on the side, chances are, you don't.

        And then there's the fact that with the tax write-offs, and how you could just claim to be a business, Hummers were pretty much free for awhile there, if you were willing to be an enormous jerk.

      •  South Texas, 'natch. (3+ / 0-)
        Recommended by:
        cai, TexasTom, Calamity Jean

        I just wish I had had enough scratch to really take advantage of that particular bubble.
        I would have bought 5-10 of those vehicles and waited it out awhile, because the market came back (with many of the cretins swallowing yet again), and even with a depreciating asset like that, at what you could get them for you would have made some money.
        Oh well, there are always nefarious ways to short the dumb asses, just listen to FuxNooz and anticipate the opposite (I do it every chance I get, like when they really get to pumping the stock market, although that gig might be pretty much over now).

        As far as this, it's more a means of intimidation in many cases, IMO. You know, pin-dick=big toy.

        Because no matter how cheap gas is, it will still handle like a big, heavy truck...not a lot of fun to drive.

        All that aside, they'll still have to pry my largish 4WD 'Burban (tow limit 10K #'s) from my cold dead paws.
        We rural folk do have legit reasons for having them. It's more the city and 'burb folk that 'need' something like that to take little Suzy to daycare that doesn't compute.

        "Double, double, toile and trouble; Fire burne, and Cauldron bubble... By the pricking of my Thumbes, Something wicked this way comes": Republicans Willkommen auf das Vierte Reich! Sie Angelegenheit nicht mehr.

        by Bluefin on Sat Jul 09, 2011 at 08:06:21 PM PDT

        [ Parent ]

  •  My bad, I thought it said how many GOP does (1+ / 0-)
    Recommended by:
    IreGyre

    it take to screw a lightbulb.  I had all kinds of answers racing through my head before I realized I had misread it.

  •  I have no problem with the regs, but... (1+ / 0-)
    Recommended by:
    cai

    ...the issue with the energy-efficient bulbs, if I remember correctly, is that they are, themselves, hazardous to the environment. The bulbs can't just be thrown away in the trash as they contain mercury.
    I mean, how many people know that? How many NOW just toss them into the trash?
    Is there any plan to create an energy-efficient bulb that does not pollute the environment once its useful life is over?
    Think of the millions of bulbs that will be sold. And folks will either be ignorant of their toxicity, or just won't give a crap - especially the right who will simply say, "Ah, fuck it. They make me buy 'em, they can clean up the mess."
    Am I wrong? Is there a newer, non-polluting bulb out there? Am I off base?

    If you tell the truth, you don’t have to remember anything. - Mark Twain

    by MA Liberal on Sat Jul 09, 2011 at 07:06:05 PM PDT

    •  That is a problem. (0+ / 0-)

      And even if the bulbs are disposed of properly, the trash may be just shipped overseas to pollute somebody else's country (e.g., China), just like our toxic electronic waste.

      Another problem is that fluorescent bulbs can cause problems for people with certain neurological conditions.  But, like the diarist said, the regulations have produced new incandescent bulbs, too.

      If anything, this just demonstrates that regulations have to be carefully crafted to avoid unintended consequences.

    •  Not really. (2+ / 0-)
      Recommended by:
      IreGyre, James Wells
      ...the issue with the energy-efficient bulbs, if I remember correctly, is that they are, themselves, hazardous to the environment. The bulbs can't just be thrown away in the trash as they contain mercury.
      It's true that florescent bulbs contain a miniscule amount of mercury.  However, if your electricity is 2/3 made by burning coal, which emits mercury in its ash, you put more mercury into the environment with an incandescent by the extra coal that has to be burned to light the incandescent compared to the florescent.  
      Is there a newer, non-polluting bulb out there?  
      Yes, light emitting diode (LED) bulbs.  But they are still so new they cost more.  

      Renewable energy brings national security.      -6.25, -6.05

      by Calamity Jean on Sat Jul 09, 2011 at 11:10:25 PM PDT

      [ Parent ]

  •  Consumer Reports (3+ / 0-)
    Recommended by:
    cai, James Wells, Calamity Jean

    is a good source so you can...

    Hunt down the information so that you really can do the math

    Consumer's Union also lobbies for regulations that protect consumers and the environment.
  •  Another thing: if you can, buy above regulations. (2+ / 0-)
    Recommended by:
    drewfromct, James Wells

    This is way out of my realm of even thinking about.  BUT.  

    For those looking to have a house built, don't settle for the thickness of walls and insulation that the contractor will default to.  Because they will default to what the law requires; or, if building to be "efficient", to the cheapest the efficiency standard requires.

    This is not really their fault.  They are used to clients wanting the cheapest the law requires, or clients not knowing the difference.

    But if you do your homework and learn how you can be truly most efficient -- more insulation, passive heating, etc. -- you can get a better house, a house that will save you money in the long run.

    This information will never apply to me, unless I win the lottery.  (Which I don't play.)  But, in my own way, I try to buy above regulations, too.  

    In my case, that means mostly eggs.  I buy eggs from people I've met.  People whose farms are within short driving distance, who let their hens have the run of fields, who feed them good quality feed, who sell eggs in re-used cartons.

    Most of them aren't "certified organic", but I can ask what they're fed and decide what I think.  With them, free range truly means free range; the regulations just make there be an open door and some space, whether or not the chickens ever go outside.

  •  Thanks - great stuff. dsteffen has a diary series (2+ / 0-)
    Recommended by:
    James Wells, cai

    called "How regulation came to be" (HIGHLY recommended). You have added "and why it's good for industry." Much appreciated.

    Pollan's Rule: Cook! What two people eat for dinner: My 365 Dinners 2011

    by pixxer on Sat Jul 09, 2011 at 09:31:38 PM PDT

  •  Thanks so much everyone for the comments and recs (1+ / 0-)
    Recommended by:
    cai

    I'll try to come up with another that might be as well received and hopefully useful.

    Good night!

  •  If you're looking for a lightbulb joke (4+ / 0-)
    Recommended by:
    cai, Calamity Jean, IreGyre, James Wells

    I came up with a few answers to

    How many Republicans does it take to change a lightbulb?

    None. If we lower taxes and decrease regulation, the invisible hand of the market will magically change the lightbulb.
    Even though the darkness began under GW Bush, it’s obviously Obama’s fault. If it stays dark long enough maybe a Republican can win in 2012.
    Two. One man and one woman, as God intended.
    Buying a new lightbulb and getting someone to change it would increase the deficit. Obviously we must cut Medicare and Social Security. That will solve the problem.
    What kind of socialist question is this? If we simply cut taxes, the rich will be able to buy their own lamps and some of the light will trickle into your dark little corner.
    242 to vote against fixing the lightbulb, but first they attach an amendment against government funding of abortion.
    Ten fundamentalists. They pray and then chant, “Let there be light,” hoping the problem will go away. Hey, it worked for God.

    But the angle said to them, "Do not be Alfred. A sailor has been born to you"

    by Dbug on Sat Jul 09, 2011 at 10:33:57 PM PDT

  •  Synchronicity - more from Think Progress (0+ / 0-)

    Think Progress column cleverly titled "How Many Republicans Does It Take To Screw Up Our Light Bulb Savings"

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