Toilets and other Windows of opportunity

An economist I am not. But my earlier toilet post caused me to stumble upon something that challenges my libertarian (Misian) view that government intervention is always a force of economic stagnation, and therefore never a force for economic growth.

On to my unsettling discovery. Initially, I found that, yes, the 1994 law mandating 1.6 gallon toilets did cause quite a commotion, and it did cause a black market in older style toilets that worked. The first 1.6 gallon toilets were terrible, because no thought went into making them work properly. All that happened was that the toilet manufacturers made the tank smaller, and left everything else the same. Thus, the typical ballcock flushing mechanism that worked fine with a 3.5 gallon toilet worked only half as well with a smaller volume of water, meaning that toilets often had to be flushed two or three times, or worse, plunged manually.

With a litany of complaints from consumers, innumerable anti-big-government toilet jokes on talk radio, a "keep the government out of my bathroom" movement was born, and a bill was introduced to deregulate toilets.

Guess whose opposition to the bill killed it?

The environmentalists? No way -- not in a Republican Congress.

It was the toilet manufacturers themselves. It turned out that they'd done pretty well under the new laws prohibiting the older toilets.

This led me to wonder about how many economic opportunities are direct and indirect result of government regulations. If you're a toilet manufacturer, you know that there are only so many toilets in this country, and that while the metal or plastic parts may need to be renewed from time to time, most toilets continue to stay bolted to the floor for many, many years.

Who the hell wants to tear out a toilet unless he really has to? But with the government creating a "has to," that changes everything. Suddenly, the industry woke up and realized that almost every home had an "outmoded" and now illegal toilet. That's many millions of toilets that need to be replaced, with much more expensive alternatives.

In short, such government regulation becomes a manufacturer's dream.

(Libertarians like me object of course. But we're living back in the pre-9/11 Reagan Era.)

Ditto for the window industry. Anyone in the construction business will tell you about the new double pane window requirements for new construction. But now the rules are changing to require even old windows to be upgraded to the double pane variety.

That's millions of windows. Who wouldn't want to be a window manufacturer?

I'm sure there are innumerable examples. Take the disabilty-related rules and regs. One Microsoft executive wrote a piece titled "FEDERAL REGULATION CREATES ECONOMIC INCENTIVES FOR COMPETITION, INNOVATION AMONG TECHNOLOGY COMPANIES" which argued that such regulations create innumerable business opportunities for the high tech community. (Especially for large established companies like Microsoft. Rules like this help insure that its Windows will never be in the toilet.)

I'm sure other examples abound.

How about SUVs? A major reason they're so popular is that child seat laws make it impossible to use a passenger car to transport more than two kids.

Is government regulation good for the economy? I'll always be a diehard libertarian in my thinking, but playing Devil's Advocate occasionally is a good way to flush my soul.

MORE: The comments to this post have reminded me of Bill Clinton's remarks in Canada that adopting the Kyoto regulations would create economic opportunities.

Montreal — Former President Clinton told a global audience of diplomats, environmentalists and others Friday that the Bush administration is “flat wrong” in claiming that reducing greenhouse-gas emissions to fight global warming would damage the U.S. economy.

With a “serious disciplined effort” to develop energy-saving technology, he said, “we could meet and surpass the Kyoto targets in a way that would strengthen and not weaken our economies.”

Clinton, a champion of the Kyoto Protocol, the existing emissions-controls agreement opposed by the Bush administration, spoke in the final hours of a two-week U.N. climate conference at which Washington has come under criticism for its stand.

Here here!

And here's the picture of Bill Clinton at the conference, next to Canadian Prime Minister Paul Martin:

MARTINCLINTON.jpg

Considering the recent Canadian election results, doesn't that picture seem to cry out for a caption?

posted by Eric on 01.25.06 at 08:56 AM







TrackBack




Listed below are links to weblogs that reference Toilets and other Windows of opportunity:

» RINO Sightings for Jan 29! from The Radical Centrist
The RINOs have been sighted! (actually, their not that hard to spot, as they are scrambling to be noticed.) We have a good crop of free-ranging opinion and observation this week, as is traditional for the Sightings. Thanks to all [Read More]
Tracked on January 30, 2006 6:42 AM
» RINO Sightings for Jan 29! from The Radical Centrist
The RINOs have been sighted! (actually, they're not that hard to spot, as they are scrambling to be noticed.) We have a good crop of free-ranging opinion and observation this week, as is traditional for the Sightings. Thanks to all [Read More]
Tracked on January 30, 2006 6:47 AM



Comments

But isn't this a classic example of what Hazlitt discussed in Economics in One Lesson, namely that it's merely the illusion of economic growth? By requiring consumers to spend money in one area, thus artificially growing one sector of the economy, you're diverting capital from where it might elsewhere have gone. In short, you can rarely ever create real growth, but rather only temporarily benefit some at the expense of others.

Dennis   ·  January 25, 2006 10:05 AM

Playing Devil's Advocate does not mean I agree with the Devil!

Eric Scheie   ·  January 25, 2006 10:28 AM

The key here is something called opportunity costs, best illustraged by the broken window fallacy.

Dave Justus   ·  January 25, 2006 11:50 AM

The broken window fallacy is of course directly applicable, but when the companies agree with the regs, they're behaving like glaziers who thank the boy who broke the windows.

The victims become irrelevant. Besides, they're made to feel guilty for having had the wrong kind of windows.

Eric Scheie   ·  January 25, 2006 1:02 PM

The toilet law acted as a tax on consumers, but a tax payable to toilet manufacturers rather than the government.

mark-o   ·  January 25, 2006 6:29 PM

Here's another government toilet program you might what to check out:
Toilet Taxed
"Mayor Larry Delgado cast the tie-breaking vote in a 4-4 tie of Santa Fe's city council on Aug. 26, 2002, to pass a water budget that makes a new building permit contingent on retrofitting eight, 10, or 12 low-flow toilets in existing buildings (depending on the new construction's lot size)."

Dinah Lord   ·  January 25, 2006 8:01 PM

Yes and Canada's Kyoto accord waving Liberal government managed to reduce green house emmissions by a staggering plus 24%. US Republicans did much better in opposition to Kyoto
Hugh

hugh   ·  January 25, 2006 11:13 PM

Is that "plus 24%" the figure Bill Clinton is indicating with his hands, and is that why Paul Martin is scowling?

By the way, Hugh, you might get a kick out of the analysis here, which includes a very damning graph:

http://magicstatistics.blogspot.com/2005/12/canadas-greenhouse-emissions.html

Eric Scheie   ·  January 25, 2006 11:42 PM

To be fair, I don't think you had to replace old toilets in existing one-family homes.

The manufacturers are actually losing an opportunity; those who are dissatisfied with low-flow toilets might replace them with better ones if such were available.

I would.

miriam   ·  January 31, 2006 3:53 AM

April 2011
Sun Mon Tue Wed Thu Fri Sat
          1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30

ANCIENT (AND MODERN)
WORLD-WIDE CALENDAR


Search the Site


E-mail



Classics To Go

Classical Values PDA Link



Archives



Recent Entries



Links



Site Credits