Thursday, August 28, 2014

The Unintended Consequences Of Utopian Statism

The hubris of statism and feel good intentions of prohibiting behavior and trade always has unintended consequences.  With plastic bag ban, it's an increase in norovirus and people getting sick.  Mortgage and banking industry, Democrats passed laws forcing banks to give bad loans.  We all know the end result of that.  Millions of people couldn't (and wouldn't) pay back their loans, leading to a mortgage crisis.

If the left was as truly as open minded as they claim, they would reverse course on these bans, but they don't and the result is people die from their hubris.

The case study for this blog will be the CAFE standards, to "save the environment", or as they were originally envisioned to "make us more energy independent."

So let's challenge those two premises, and then move on to the unintended consequences of Utopian regulations, to change behavior.

1) Has it "saved the environment"?  By their own standards, CO2 is a pollutant. (Which I'll be addressing in a future post)  What has CO2 done since the inception of the CAFE standards?

2) It's original goal was to reduce the amount of oil imported.  Did it accomplish that?  Initially the data makes it appear that way after ten years.  However that's not taking into account two things.  Firstly, increased oil production domestically allowed under Reagan's lax on regulatory burden.  Secondly, decreased consumption in the early eighties from a recession that was the worst since the great depression.  (unlike the one Obama inherited).  You can see this in the Total oil used which also decreased from 1980 to 1985.

Year CO2 Level CO2 - %change Oil Imported OI - %Change total oil used TOU - %Change
1978 336.48 ppm 2,319,826 Not Available
1980 339.34 ppm 1,926,162 17,056,000
1985 346.65 ppm 22.1% 1,168,297 -64.8% 15,726,000 -8.5%
1990 354.88 ppm 23.2% 2,151,387 45.7% 16,988,500 7.43%
1995 361.70 ppm 18.9% 2,638,810 18.47% 17,724,590 4.15%
2000 369.85 ppm 22.0% 3,319,816 20.51% 19,701,080 10.03%
2005 380.78 ppm 28.7% 3,695,971 10.18% 20,802,160 5.29%
2010 390.22 ppm 24.2% 3,362,856 -9.91% 19,180,130 -8.46%
Sources: CO2 data, Imported Oil, Total Oil Used

So what does the data tell us?

1)  CO2 has not stopped increased, despite the push for smaller cars. In fact as an average, CO2 has remained at a constant state of increase, completely separate from economic activity. (see point 2)

2) Imported oil hasn't decreased, today is a greater percentage of total oil used, then it was in 1978.  It was 13.6% in 1978 and is 17.5% today.  You can also see in total oil used, that recessions changed behavior more than regulations.

What about my initial point, that CAFE standards kill (and that wonderful picture in the beginning)?
According to the Brookings Institution, a 500-lb weight reduction of the average car increased annual highway fatalities by 2,200-3,900 and serious injuries by 11,000 to 19,500 per year. USA Today found that 7,700 deaths occurred for every mile per gallon gained in fuel economy standards. Smaller cars accounted for up to 12,144 deaths in 1997, 37% of all vehicle fatalities for that year.
How many deaths have resulted? Depending on which study you choose, the total ranges from 41,600 to 124,800. To that figure we can add between 352,000 and 624,000 people suffering serious injuries, including being crippled for life. In the past thirty years, fuel standards have become one of the major causes of death and misery in the United States — and one almost completely attributable to human stupidity and shortsightedness.
National Review has another brilliant unintended consequence.  Fewer people will be able to afford newer cars, as regulatory burden drives prices upward.

Given all this why hasn't the state repealed the CAFE standards?

Reagan said it best:

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