naturescene’s Recent Comments

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  some thoughts

  This is as much a case of "government failure" as it is "market failure".  Since there never has been a functioning free market I don't see how anyone can seriously argue that a free market philosophy of limited government has been an abject failure.  It's never been tried! And it never will be. So let's go ahead and get past meaningless platitudes.

  The people involved in this are NOT free marketeers - they have NO principles.  They're for whatever helps them out at the moment.  

  As easy as it is to blame this entire thing on greedy Wall Streeters, or even all the people taking loans they knew they couldn't afford, we should also remember that the regulatory system in place encouraged and in some cases required many banks to lend money to people who otherwise wouldn't qualify for a loan - all in the name of affordable housing.  At the same time, as the dot-com bubble burst, money flooded the construction industry.  Construction lobbyists were successful in getting many communities to allow poor-quality housing, built at 2-4 units per acre, and sold at inflated prices -- all in the name of "Smart Growth" or (supposed) "Low-Impact Development" (a concept I think is past time for a new discussion among environmentalists).  These problems were compounded by mark-to-market accounting requirements, hold-overs from the 30s, that forced companies to undervalue assets, almost encouraging them to file bankruptcy.

  Wall Street isn't innocent, but neither is the government.  We don't need more regulation (or deregulation - those terms are becoming meaningless), but we do need smarter rules put in place.  Thankfully a 1999 act repealed some of the regulatory barriers between investment banks and commercial banks that were set up by the Depression-era Glass Stegall Act.  Doing so is the only reason that JP Morgan was allowed to buy Bear Stearns and that Bank of America was allowed to buy Merrill Lynch.  Here's a case of deregulation that actually kept this crisis from being even worse.

  But there is no fundamentalist case to be made for either regulation or deregulation.  There must be oversight, but at the same time regulations should not create perverse incentives.  Oh how I wish it was easy.

  Now to the bailout.  Everytime I read about it I see "there is no alternative" or "if we don't have the bailout, things will be even worse!"  

  There's a strategy here: Say something enough times and people will start to believe it.  You don't need facts, or even explanations.  Kinda like WMDs and the Iraq War.

  There are alternatives.  For one, the capital gains tax could be lowering, likely encouraging money to flow back to the markets.  

  A contraction and some pain at this point is unavoidable.  What the bailout does is put it off for a while - so new politicians have to deal with it.  But it doesn't fix anything.  

  When someone tells you that the bailout is the only option, ask them how exactly it will work?  How does a government, which itself has bad or toxic debts, have the ability to buy up other bad debts and make things ok?  It doesn't.  The bailout ensures that certain companies will continue to exist rather than making sure that there is a functioning market.

  It's time for some of Schumpeter's creative destruction of the market to take over.  Let the giants fall and new markets emerge.  It'll hurt in the short term, no doubt, but in the long-term it's advantageous.  The bailout is a short-term band-aid with disastrous long-term effects.On Friends of the Earth says anti-regulation approach causes environmental destruction posted 1 year, 1 month ago 25 Responses

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  ITQs

  Some environmental economists have promoted ITQs for years, and fisheries in Alaska and New Zealand showed signs of success.  It's good to hear this concept becoming more mainstream.On Allocating individual quotas could save many fisheries, study says posted 1 year, 1 month ago 4 Responses

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  not socialism, markets

  Wolverine,

  I believe you're overlooking the fact that this proposal is advocating a market-based system for fisheries, in which individuals are allocated quotas, but the quotas are transferable.  In other words, it's a market-based cap-and-trade for fisheries.

  Sorry to burst your bubble.On Allocating individual quotas could save many fisheries, study says posted 1 year, 1 month ago 4 Responses

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  Not an oxymoron

  There's are two very simple truths that benefit-cost analysis is a must: The first is scarcity - that is the resources that we have available to deal with environmental problems is limited.  The second is opportunity costs - the opportunities we give up by devoting our resources to a certain action.

  There is no shortage of demand for funding to fix environmental problems, but the available funding is limited.  All environmental goals are noble, but the fact is that a dollar spent in one place can be much more effective than a dollar spent elsewhere.  To ensure that public money is directed to the projects in which it will be most effective, there must be some sort of analysis to compare the pros and cons of a policy option - that is benefit-cost analysis.

  If you argue that benefit-cost analysis can't include non-monetary values you have shown that you are completely unaware of the current state of research in environmental economics.

  But what you're really arguing against here isn't benefit-cost analysis anyway, it's the use of discount rates.  The points made in regard to this are valid, but you've cloaked an interesting argument about discount rates into a straw man over benefit-cost analysis.  

  There are environmental issues besides climate change, that have immediate impacts and are perfectly suited for benefit-cost analysis.
  On Lisa Heinzerling responds to Richard Revesz on cost-benefit analysis posted 1 year, 5 months ago 38 Responses

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  none of this

  directly refutes Sean's assertions that good carbon policy should provide penalties as well as incentives.On Empirical data and theory both show that emissions taxes get passed to consumers posted 1 year, 6 months ago 6 Responses