«
»

And the World is 4000 Years Old Too

October 14, 2011, 10:21 am

This is just staggering ignorance from a prominent US Congressman

"I think the answer is no," [MN representative Keith] Ellison said when asked if he believes regulations kill jobs. "And here is why: When we talked about increasing fuel efficiency standards, the industry responded, and they need engineers and designers and manufacturers, and they need actually more people to help respond to the new requirement."

"I believe if the government says, look, we have got to reduce our carbon footprint, you will kick into gear a whole number of people that know how to do that or have ideas about that, and that will be a job engine. I understand what you mean, because if anything adds a cost to a business, you could assume that that will diminish that business’s ability to hire. But I don’t think that’s actually right. I think what businesses want is customers and what — if they are selling product, if they have a product to sell they will do well even if they have some new regulations to meet," the Congressman said.

There is a lot about economics we still do not understand, but one thing we are pretty certain about is that shifting labor and investment from productive to unproductive activities destroys wealth and reduces economic growth.  Of course, since much of the press is at least as ignorant on economic fundamentals, they just nod sagely.

Tags: , , , , ,
Category: Economics
  • Matt

    “I believe if the government says, look, we have got to reduce our carbon footprint, you will kick into gear a whole number of people that know how to do that or have ideas about that, and that will be a job engine."

    Well, sure. It'll be a terrific job engine for the folks doing the rounding up, and the folks running the cattle cars, and the folks running the crematoria, not to mention the folks who remember how to make Zyklon-B. (Oh, and since you're talking about doing this in _America_, there'll also be jobs for the morticians to bury the members of the former groups who get shot while attempting to do _their_ jobs.) It'll be a downright _bonanza_ for jobs!

    Oh, wait. You mean you want to mandate that it be done _without_ killing millions of people and putting your name in the permanent roster of historical infamy alongside such notables as Pol Pot, Hitler, Stalin, and Mao? Well, sure...that'll create lots and lots of jobs for the folks who know how to do that.

    Except that such people don't exist, and hence can't vote (except in Chicago, where they're still of no use to a Congressman from Minnesota). Oops.

    I'm afraid you're really out of luck there, Mr. Congressman.

  • morganovich

    this is just a particularly egregious example of the broken window fallacy.

    if this were true, then we could legislate our way to prosperity by passing a law that everyone has to paint their house every year. if that is not enough growth, we can try twice a year, or hell, how about weekly, that would cause a boom, right? we'd all be rich in no time.

    if this is his view, then i propose a test. i will make up new regulations for him to comply with. at the end of a year, if he feels richer, then i'll listen to him.

  • hedberg

    Ah yes, the perpetual motion theory of economics. Ellison is not the only serial Onanist to tout the philosophy. Keynes famously suggested that the government could create a positive economic outcome by burying banknotes in old bottles and then granting licenses to "private enterprise" to dig the bottles up. Krugman seems to agree .

  • Jon B.

    But, but, but...

    He "believes" it will work. What more is necessary than belief?

    We have quite a crop of politicians here in Minnesota: Ellison, Franken, Klobuchar...

    Jon

  • Ted Rado

    Every time I think we have reached the limit of stupidity in government officials, something like this comes along. I am beginning to feel that the greatest hazard we face is our own government.

    If the American public reaches the stage where they have no faith in the government, we are in trouble. People follow their leaders only if they have confidnce in them. Otherwise there is chaos, rioting, etc. If we don't do something to improve our USG functioning soon, we may be in that situation. I am a flag-waving patriotic American, but I am becoming outraged at what the pols of both parties are doing to our country.

  • me

    Well. Y'all have to understand that the money funding these programs is free from the view of the politician: it's just a number on paper. The green stuff is magically printed by fiat or just raised through taxes here and there... I'd bet a significant portion of my personal assets that things would be very, very different, if total spending on a bill would have a direct negative correlation to the income of politicians voting for them.

  • Anon

    He's just repeating the "green jobs" doctrine as explained by the Holy O.

    We are rotting from the top.

  • Not Sure

    More regulations for businesses? I don't know why these guys keep tinkering at the edges. Why not just repeal the laws of physics that are keeping the world from being the way they want it to be?

  • Bob Smith

    "if they have a product to sell they will do well even if they have some new regulations to meet"

    This nincompoop apparently has forgotten that prices matter. The ridiculous new fuel economy standards (which are CO2 standards in disguise) will probably add 50% to the cost of a car. Will that product still sell even with that burden? I don't think so. Add the inferior qualitative differences of the new car (less power, more interior noise, and less comfort) and it looks even worse.

  • http://thecivillibertarian.blogspot.com/ Frankenstein Government

    Ted Rado writes;

    Every time I think we have reached the limit of stupidity in government officials, something like this comes along. I am beginning to feel that the greatest hazard we face is our own government.

    Ted, that last line might be the largest understatement I have ever read in my life. Why do I get this feeling that you are a nice man? Tell ya what. If I ever get convicted of stretching a few necks, I want you handing down the sentence.

  • Noumenon

    There is a lot about economics we still do not understand, but one thing we are pretty certain about is that shifting labor and investment from productive to unproductive activities destroys wealth and reduces economic growth.

    I think the idea is that you are going to shift labor and investment from very unproductive activities (like being unemployed, or producing Twinkies) to activities that are productive but not rewarded by the market. It's possible the guy knows more economics than you. (Though my bet is on him just being kneejerk and stupid.)

  • Fred from Canuckistan

    Sure that was Ellison?

    Reads just like the words out of Obama's mouth.

    And that explains a whole lot about the current economic malaise in the USA.

  • JKB

    I saw this over at Newmark's Door, it explains a lot of this:

    "My father (a lawyer) once told me: 'Company culture is driven from the top--if it's the people who make the product, you're good; sell the product, you're OK. If the accountants take over, look for another job, and if the lawyers take over, run as fast as you can!"

    Not to engage in nasty, gratuitous, superficial stereotyping, but what is the former occupation of most of the members of the U.S. Congress?

    @Bob Smith: You have made the classic mistake of attempting to use logic and reason with a politician. They can only comprehend self-interest. Regulation is the milk cow of Congress.

  • http://togetrichisglorious.blogspot.com Colin
  • anon

    ". . . activities that are productive but not rewarded by the market."

    No such thing by definition. By definition, productive => making stuff people want.

    You might not like Twinkies, but many other people do -- in other words, you are assuming that only your personal aesthetics matter when measuring productivity.

    Taxing/regulating the production of Twinkies makes Twinkies more expensive to the consumer, and shifts investment/labor into the production other stuff people don't want at free-market price.

    End result, resources are inefficiently allocated and people end up eating fewer Twinkies.

  • Ted Rado

    The problem with our politicl system is that pols do not suffer personally for bad decisions. If a husband spends beyond his means to gain the favor of his wife and kids, he winds up bankrupt and in the street. Thus, he is motivated to control his expenditures. With USG officials, no such thing. Spend like crazy to buy the votes. Someone else down the line can worry about the consequences. This arrangement has got to stop or we will fail as a society.

    The pols have seduced the voters with all sorts of freebies which we cannot afford. Now they say anyone who thinks we need to stop this nonsense is pushing grandma off a cliff. As a retiree, I would be glad ro take a cut in social security and increase my medicare copay. I imagine many feel the same way, PROVIDED that the pols then do not turn around and piss away the money saved on new vote-buying idiot projects.

    Maybe a balanced budget ammendment would work. It does pretty well here in Oklahoma.

  • Harry

    Great job, Coyote and others.

  • CT_Yankee

    I'll see your Congressman Ellison's Ignorance, and raise you Jessie Jackson's:

    "I believe in the direct hiring of 15 million unemployed americans. At 40,000 a head, some more than 40,000 some less than 40,000, that would be $600 billion. It could be a five-year program,” Jackson said, going on to add money to bail out cities and states. “For $804 billion, we help Americans, we bail out the cities and bail out the states and we do it through direct hire."

    http://www.myfoxchicago.com/dpp/news/metro/jesse-jackson-jr-calls-president-obama-direct-hire-unemployed-without-congress-20111014

  • http://pretenseofknowledge.com/ Speedmaster

    I saw this story, too. If ignorance was illegal, Ellison would be guilty of a capital crime. Disturbing.

  • http://www.gifts2germany.com gifts2germany

    Website is very comprehensive and informative. I have enjoyed the visit. From http://www.gifts2germany.com.

  • http://mpc-blog.blogspot.com Matt

    I'll see your Ellison and Jackson, and raise you Lee:

    http://www.weeklystandard.com/articles/boneheaded-economics_595927.html?nopager=1

  • MJ

    As morganovich, Colin and others have alluded to, this is just garden-variety window-breaking, and Ellison is probably not the source of this stupid idea, as it already has numerous supporters. The green folks (Apollo Project, etc.) who designed the stimulus are very sympathetic to this worldview, and have already given it a trial run -- through programs like Cash for Clunkers. The jobs-through-regulation approach is just a response to the fact that Congress won't let them spend any more money explicitly through conventional budgetary processes.

    Many of the promoters of these types of schemes already hold prominent positions within the Administration. For instance, EPA Administrator Lisa Jackson gave us a taste of this two years ago when she explained in an NPR interview why she thinks the government should be dictating to the bailed-out automakers which types of cars they should be manufacturing. "Woman of system", indeed. I'm pegging this as the source of the kool-aid.

  • JSmoke

    I'm no Ellison fan, but I'm not sure this is a broken window fallacy. I agree that government regulation is not the most efficient method of creating innovation, but having more fuel efficient or longer-lasting vehicles would benefit everyone just as having more productive use of agriculture assets has made it so less people have to farm for a living.

    In the house-painting example, there is obviously no production if the end product isn't better than what you stated with. But if, and it's a BIG if, a government initiative did spark a technological breakthrough, it wouldn't just be fixing broken windows.

    I think it more boils down to what's the best method for sparking innovation.

  • MJ

    But if, and it’s a BIG if, a government initiative did spark a technological breakthrough, it wouldn’t just be fixing broken windows.

    Consider me skeptical. The federal government has been mandating fuel economy improvements for the past 35 years. We have yet to see the "big push".

  • Ted Rado

    If left alone, the marketplace will detemine what to produce. USG intervention just screws it up.

    For the USG to determine (in their infinite wisdom) what will benefit everyone rather than let the public decide is unbelievable arrogance.

    I decided some years ago to install double glazed windows to a) reduce my electricity bill, and b) make my home more comfortable. That was MY ecision, not some bureaucrat's in DC. Someone else may make a different decision as to optimizing the use of their money. This sort of decision is made by everyone almost daily. Does anyone REALLY believe that some USG officials can do this better? Price and value will determine individual choices. We don't need some idiot politician making our decisions for us!

  • ZZMike

    "When we talked about increasing fuel efficiency standards, the industry responded, and they need engineers and designers and manufacturers,..."

    And this of course made the product ever so much cheaper and more efficient.

    "...if they are selling product, if they have a product to sell they will do well even if they have some new regulations to meet,..."

    Like Solyndra's photovoltaic cells, like the all-electric cars that are flying off the assembly line, ...

    I'll write my Senators and suggest that they pass a law that says that everybody has to buy new aluminum siding for their house - all in the interest of energy conservation, of course.

    If that doesn't work, we'll make them buy something else. We'll think of something. Maybe some sort of insurance.

    Someone should introduce Mr Ellison to the concept called "economics".

    JSmoke: "but having more fuel efficient or longer-lasting vehicles would benefit everyone just as having more ..."

    Absolutely! ! And the marketplace would make that decision. I think a lot more people would buy energy-efficient light bulbs if only the government hadn't rammed them down our throats.

    Mandating 50 mpg cars is tantamount to repealing the laws of thermodynamics. Even Commander Scott said you can't do that. (But you just might be able to get a factor of 5 improvement in battery technology.)

  • http://www.buygreatcheap.com Great

    After read few of the articles on your blog today, and I really like your style of blogging. I bookmarked it to my bookmark site list and will be checking back soon. Pls visit my website also and let me know what you think. Thank You.