Once again, be careful what you wish for

by Sandy Ikeda

I’d wager that many of us who’ve lectured to our classes on environmental economics have at some point suggested that one way to eliminate pollution is to stop all forms of energy-consuming and pollution-generating production.  That would kill most of the human (and a lot of the non-human) inhabitants on earth, but it would probably preserve the natural environment (in the long-run, that is, after all those nasty carcasses get washed away).  The point being, of course, that there’s such a thing as having too little pollution, and that there are better and worse ways to lower pollution.

Next time, you might want to use this article from the latest (November 22, 2008) The Economist.  Thanks to skyrocketing gas prices (at least until lately), the housing collapse, and the impending recession, Californians may actually come close to hitting the ambitious targets for renewable energy and greenhouse-gas emissions mandated by Governor Arnold Schwartzenegger for 2020. Continue reading

Deregulation and the Crash of 2008: Was Greenspan right?


When Alan Greenspan blamed deregulation for the Crash of 2008 many libertarians scrambled to denounce the former Fed chairman as a hypocrite or nuts or both. And in defense of the free market, some invoked “the dynamics of interventionism,” the popular interpretation of which is that the expansion of government control generates negative unintended consequences that tend in turn to provoke further government controls.

For what it’s worth, lately I’ve realized that these responses are probably wrong: What we’re going through right now is at least partly the result of deregulation – or to use my preferred clunky term “disintervention” – and less the result of the expansion of intervention. So how does that not make me a hypocrite or nuts or both?
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