Economics

The Price of Big Government

Do the benefits ever outweigh the costs?

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The bio for James Delingpole of the London Telegraph describes him as "a writer, journalist, and broadcaster who is right about everything." The rest of us should probably heed the counsel of a woman of my acquaintance who advises remaining open to the possibility that we might—just might!—occasionally be wrong.

There are lots of reasons to do so—e.g., well-deserved humility. What Churchill once said of Clement Atlee must be said as well of the journalist: "He is a humble man, with much to be humble about." Also, many issues resemble chess: You're no good if you can't play both sides of the board. Then there is confirmation bias: the annoying tendency (annoying in other people, anyway) to see only the evidence that agrees with us, and to avert our eyes from the evidence that does not.

So: Last week this column looked at the Obama administration's proposal to raise corporate average fuel economy (CAFE) standards. It concluded, based on voluminous studies over the past couple of decades, that higher gas-mileage standards will, ceteris paribus, increase roadway fatalities. Tongue-in-cheek conclusion: Maybe government policies should come with warning labels like the gruesome ones now required for cigarettes.

But there are broader ways to look at the issue. For instance, one correspondent asks: What about the cost of blood for oil? "We are currently at war in two oil states (Iraq and Libya)," he writes, "and our third war (Afghanistan) was basically started by our pursuit of a renegade Saudi (named bin Laden) who happened to resent our influence in his native land."

Seems like a fair question. So far the U.S. has lost nearly 4,500 service members in Iraq and another 1,650 in Afghanistan. Assume—if only for the sake of argument—that the wars were fought solely for oil. According to the Energy Information Administration, the top six foreign suppliers of oil to the United States are Canada, Saudi Arabia, Mexico, Venezuela, Nigeria, and Iraq. Avoiding the war deaths would have required America to reduce petroleum consumption so much that it no longer needed oil from its second- and sixth-biggest suppliers.

Transportation accounts for roughly two-thirds of all U.S. oil consumption; reducing oil imports only on the transportation end would require huge leaps in fuel economy. Would the lives saved in wars foregone outnumber the additional lives lost on the highway? Someone with mad math skills will have to figure that one out.

Here's another wrinkle: If the U.S. reduced its oil consumption by (let's say) half, then rather than simply omit Saudi Arabia and Iraq from its list of importing countries, it might cut its Canadian imports by half, its Saudi imports by half, its Mexican imports by half, and so on.

In that case, the only way to avoid the war-for-oil deaths altogether would be to eliminate oil imports almost entirely, by switching nearly all vehicles to electric power. That would jack up coal and nuclear generation by orders of magnitude. (Then again, perhaps if the U.S. imported only half as much oil from Saudi Arabia and Iraq, that would not have sufficed to justify war. Probably impossible to say.)

What about another consideration: the fatalities induced by air pollution? (Air pollution from vehicles causes lots of health problems—$56 billion worth in 2005, according to the National Academy of Sciences' report "The Hidden Cost of Energy"—as well as crop damage and various other negative externalities. But since last week's column addressed only vehicle fatalities due to CAFE standards—not injuries, lost productivity, and so on—let's keep it simple.)

There's no doubt improving fuel efficiency would reduce emissions and lower deaths. How much? Hard to say. A Harvard Center for Risk Analysis study claims more than 2,200 people died prematurely last year as a result of exposure to fine particulate matter from cars and trucks in big U.S. cities. The EPA and the Natural Resources Defense Council contend that the administration's proposed goal—a 56.2 mph fleet average—would cut greenhouse gas emissions by 11.6 percent. Presumably other emissions, such as nitrogen oxides and sulfur dioxide, would shrink proportionately as well.

On the other hand, as the EPA's Office of Transportation and Air Quality noted in a 2005 report, "cars are getting cleaner, but people are driving more." Indeed, higher fuel economy causes what is known as a rebound effect: On a per-mile basis, they make it less expensive to drive. So some of the gains from greater fuel efficiency are lost through induced demand. Besides, tighter standards would raise the cost of a new vehicle, inducing some people to keep their old clunkers longer. If reducing emissions is the goal, then raising the gasoline tax might be a more effective means.

Well, shoot. The goal of this column was to turn the chessboard around and play the black pieces. Reading it over, it seems I can't help turning the board around again to play white after each black move. Apparently my mind wants to slam shut even when I'm consciously trying to keep it open. How 'bout yours?

Then again: Maybe, like Delingpole, I'm simply right about everything.

Nah.

A. Barton Hinkle is a columnist at the Richmond Times-Dispatch. This article originally appeared at the Richmond Times-Dispatch.

NEXT: If You Won't Change Your Mind About Gay Marriage, Will You Limit Your Opposition to Quiet Grumbling?

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  1. Well, I think what this article is saying is… wait what?

  2. We must bring Democracy to Libya. Just as we did for Iraq and Afghanistan. And Egypt and Yemen and Somalia and Serbia and Illinois.

    1. Democracy = mob rule. Illinois already has that.

      1. I hate illinois nazis

        1. Tell Elwood, Twiggy’s still waiting.

        2. I hate Illinois socialists.

  3. What about the cost of blood for oil?

    I’ve been saying that since Desert Storm. I understand that it doesn’t work. I understand that it’s stupid policy. I also understand that just because it’s a stupid policy doesn’t mean our brain trusts in Washington won’t continue doing it, therfore you have to bake in the cost.

    1. There has never been a war that was not about money. Our own history, the revolutionary war,taxes, the Civil war, slavery, WWIⅈ our trade partners were being harmed, etc. and so on. So yes the middle east is about oil but we absolutely need it. Yes we dissguies it has helping helping those in need which is admiral but we wouldn’t be helping if they didn’t have something we always want and lets face it if we could conquire them all and convert them to our way of thinking there may actually be peace in this world. NOT.

      1. There has never been a war that was not about money.

        Bullshit. History is chock full of wars started by men seeking glory and a place in history.

        1. Talk about second-handers…

        2. Were the Crusades primarily about money or Ideology? What about Al-Qaeda’s war against us?

      2. Two things.

        Admiral =/= admirable. Very different words.

        And, electric cars via nuclear (and Gen III+ plants will be much safer than the Gen II plants that give us problems) = less oil and less air pollution. Australia and Canada have good supplies of uranium. Thorium, which is more plentiful, less radioactive, and more energy efficient, could be used in plants that are essentially meltdown proof.

  4. Everything has externalities that lead to harm. One common one is life, there is a 100% chance that you will die.

    1. Until recently anyway.

  5. Remember:

    Foreseeable consequences are not unintended.

    1. Foreseeable consequences are not unintended.

      Somehow this makes me think of the recent H&R article about how poor we are at prediction.

      1. Intentions are predictions as well: claiming that the best case scenario is the only thing can be anticipated is intentional dishonesty.

      2. Yet another reason to be extremely cautious in enacting public policy.

        1. When has either Team been cautious in that regard, RC?

          1. And you think Team L would be any different if it ever became important?

            1. Yes, I do.

              Why should I put my faith in Rs or Ds?

  6. Why is buying oil,a raw material,such a bad thing.Oil is used to create wealth in many ways.The Saudi’s produce nothing.They sell off resources.The real wealth in oil is what’s produced form it’s refinment and the use of those products.Oil is a huge part of our GDP.It’s not a zero sim game

    1. Bingo M.P.!
      Prior to the invention methods of distilling Kerosene from it, petroleum was a nuisance goo that fouled wells and trapped unwary animals.
      Of course, one great evil of the rise of petroleum is that it killed the whaling industry.
      Poor Queequeg.

      1. Mmm. Tasty whale.

        1. Fuck you, whale! Fuck you, dolphin!
          /South Park

    2. I’ve been wondering if the pipeline leak is really that bad.

      Back in the 19th century, crude oil floated on top of lakes and rivers in Pennsylvania. It was not an ‘enviromental disaster’ since it had always been that way. Early crude oil wells weren’t wells–someone just skimmed it off the top of the river.

      Before petroleum was widely produced, society’s main source of oil was whaling. Does anyone think we should go back to killing more cetaceans?

  7. Do the benefits ever outweigh the costs?

    That depends on who you’re asking.

  8. Best answer to the headline question:

    Fuck, no.

  9. Oh, and this air pollution death rate is a fallacy just as the obeisity deaths are.People live longer and better now then ever before.Go back to the days of no antibiotics,horse manure every where,putrid water, and farming that could not feed a countries population.Famine and plagues were once the norm.

    1. But we had love.

    2. Air pollution from vehicles causes … crop damage

      Betcha they didn’t factor in the fertilizing effect of higher CO2 either.

    3. I must note that no Native Americans ever died from engine exhaust before the white men showed up.

      1. I see what you did there.

      2. No white men ever died from engine exhaust before they got to North America, either.

        1. Damn injuns!

  10. Pet peeve alert:

    It gripes the hell out of me that people only list negative externalities, and not positive ones, when trotting out proposals for increased government control.

    What a shock, that if you look only at the bad things, you can make a case for more government.

    1. “What a shock, that if you look only at the bad things, you can make a case for more government.”
      Not if you are intelligent.

  11. If the benefits outweighed the costs, they wouldn’t need taxes to keep government funded.

  12. Obviously, big government is worth it because it makes liberals so happy (we won’t worry about non-liberals cause they are wicked, racist, and short penised).
    Objectively, by government expenditures, we have by a wide margin the biggest government ever!!!
    And liberals are ecstatic!
    ….Whut?!?? They’re not? But we got big government!!!

  13. I thought I was wrong once, but I was mistaken.

  14. This is about the Obama regime zealots trying to force people to buy the kind of cars they want them to buy instead of the kind of cars that the consumers themselves want to buy.

    I heard that part of the legislation would levy fines of up to $25 K on high end cars with powerfull engines, such as Lexus, BMW etc.

    1. So?

  15. Just have to say – I love the comments on this board, but this is one of the most poorly written pieces of trash I’ve ever seen on this site. I mean this both stylistically and content-wise.

    1. Yeah, buddy. For a website called “Reason”…

    2. And, just for the record, this never happened when Virginia Postrel was the editor…

  16. Others have noted it obliquely, but let me be clear:

    Do the benefits ever outweigh the costs?

    No.

    That is all.

    1. Also, just cause it’s Friday:

      A. Barton Hinkle Heimerschmidt
      His name is my name, too!! (come on, sing along!)
      Whenever we go out
      People always shout,
      “There goes A. Barton Hinkle Heimerschmidt!”
      LALALALALALALA….

      (repeat ad nauseum)

      1. That took awhile…

      2. I thought we weren’t doing that anymore.

        oh, and tractor pull.

  17. “Do the benefits ever outweigh the costs?”
    No.

  18. CAFE is the dumbest form of meddling.

    A far superior approach would be to limit the max. weight of a vehicle and to restrict weights within a narrow range for safety purposes.

    Technocrats are incredibly stupid.

    1. Perhaps overtime, this would spur on the composite / nano materials industry.

    2. A far superior approach would be for the government to butt out of it altogher and let people buy whatever kind of car they want based on whatever vehicle attributes they value the most.

      We do not have some sort of “collective” obligation to maximize vehicle fuel mileage.

    3. Most people I know buying cars are already obsessed with fuel economy and want to buy high-mileage cars.

      An article in the WSJ reviewed how the new CAFE standard will effectively ban Mercedes-Benz, Land Rover, and other European luxury vehicles from the U.S.

      1. The sales patterns indicate that most people only get overly concerned with gas mileage whenever there is a big run up in the price of gas.

        When it goes back down, they revert to buying big pickup trucks and SUV’s.

        There are plenty of small cars that cater to the high mileage crowd already.

        What the Obama regime idealogues are trying to to is remove any alternative choices from people who DON’T value high mileage cars.

        And they are trying to force people away from using oil on all fronts.

        That is why the EPA is holding up the approval of an oil pipeline from the Canadian oil sands region down to the gulf area refineries. They don’t want the US to have a more reliable source of oil than what is coming in from Mexico and Venuzela.

        1. They also neglect to mention how poor people are going to be able to afford electrics or hybrids, as by the time such vehicles have depreciated to the point where a McD’s grunt can buy one on the cheap used-car lot, it’ll need expensive-assed battery replacements or expensive-assed engine repairs or… well, it goes on, that list.

  19. “According to the Energy Information Administration, the top six foreign suppliers of oil to the United States are Canada, Saudi Arabia, Mexico, Venezuela, Nigeria, and Iraq.”

    So, if “wars for oil” are the inevitable result of our alleged “addiction to oil,” then why are we not at war with Canada, Mexico, Venezuela and Nigeria?

    Seeing both sides of an argument does not require that we accept nonsense. To suggest that our three current wars would not have happened if our CAFE standards had been higher is just plain silly.

  20. All passengers should opt for the pat-down and insist the agents put on a new pair of gloves before touching them. They’ve had those gloves up the previous person’s crotch. Perhaps the cost of gloves will be the TSA’s downfall.

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