Friday, November 10, 2006

Turning Toughened Rules Into an Advantage


Here is an interesting spin on how government regulations turned into a benefit for the regulated industry. If you see yourself as a "progressive" politically (conservatives would call you the L word), you would tend to point to this article of how government could be a positive good.

4 comments:

Anonymous said...

im going to be short and sweet here cause if i ramble on im goign to start tossing words around. I see this as forcing technilogical advance. and they brag about these new light weight engines yet they fail to mention that they are more like computers then an actual engine. and this advance in making smaller engines would have come with out these laws given time and the note of fuel prices.

Anonymous said...

It's very interesting to see the adaptation of companies such as Cummins to regulations that were expected to make towns like Columbus, Indiana into "ghost towns."

I think that though the EPA's regulations can potentially be seen as anti-market, in the end these regulations will save the market and the economy. Increasing GDP in the short run in compromise for the natural world will only lead to future losses (and economic crashes), and if we degrade our world to the point where it is uninhabitable, there will be no economy to speak of.

In short, it is very smart of a company to use an eco-friendly stance to gain customers as well as comply with laws. Regulation never sounds good to the regulated, but it is necessary to maintain balnce in all spheres of activity. This EPA emissions regulation, ableit not kosher in the lasseiz-fare sense, is internalizing the cost of the harmful externality (sulpher emissions), and that is a postive good.

Even if from a purely anthropocentric perspective, a healthy environment is crucial to a healthy economy. And regulation, although not always the right move, maintained the balance in this case.

Anonymous said...

“Pleasing the E.P.A. with an integrated, fuel-efficient, low-emissions engine is not the point of the exercise for Cummins or its big rival, Caterpillar …” so it all started with the government regulations about pollution and what not but if you ask me it turned out to far surpass the original goals of the regulation. The prosperity of the American company is great and the fact that the governments involvement didn’t ruin them but spark the revision of their product and production is pretty awesome. The competition also spurred the companies to continue to their revamping their engines. The increased budget for research allowed Cummins engines to get more miles to the gallon which might put them in a position to be competition against the new hybrids. So the engines aren’t just more environmentally friendly but now are more customer appealing with their 30% more miles to the gallon. (sucks that their money cycle is peaking…don’t buy stock?)
the end.

Anonymous said...

In a capitalist society there is always a place for government, but the government just has to know where that place is. Government interference in the economy can have many unintended side effects which may cause more harm than good. Of course government interference is also needed to protect some things such as the environment and people from the savage competition that is capitalism. The EPA's regulation of the auto industry is a good example of how this works. The EPA's new emmisions standards have helped to make diesel engines cleaner and more efficient. This of course has had a cost, and this cost has been passed onto the consumer. Research and development of more efficient and cleaner ways of combustion increses the company's costs. Also the EPA and motor companies such as Cummins has forced diesel refiners to reduce the sulfer content in diesel, in effect this raised the cost of diesel. So in general the regulation of the auto industry sparked some progress in that field, but it came with an increased cost to the consumer