Comments on: Yglesias On Detroit

By: fourby4

fourby4 — Wed, 11 Mar 2009 23:46:02 +0000

If they want to save the world they should make cheap low emission cars. That will make people buy that car and not use their old cars.

By: Travel Guide

Travel Guide — Fri, 06 Mar 2009 02:45:35 +0000

great post buddy and add to my rss to hear another great story

By: Helen Atwood

Helen Atwood — Mon, 16 Feb 2009 05:54:37 +0000

your blog is awsome

By: markayi

markayi — Fri, 06 Feb 2009 04:33:36 +0000

i think its useless to help zombie company cause they dont really care about on how to save the world

By: Elsie M Aiken

Elsie M Aiken — Wed, 04 Feb 2009 04:23:57 +0000

Excellent, entertaining, useful reading, Thanks !!

By: Bram

Bram — Mon, 17 Nov 2008 16:11:45 +0000

Zombie companies using resources that could otherwise be put to more effective use – great points that I will use when talking with friends and colleagues.

By: Jadagul

Jadagul — Mon, 17 Nov 2008 13:59:10 +0000

MK: I think the point is that, if we really have no idea what the net externality is, then the _expected value_ of the externality is zero. However, since we're risk averse, we'd prefer a lower variance distribution over a given mean to a higher-variance one. So we tax carbon and reduce the variance.

Not sure whether I believe the argument I've just sketched–would need to think about it more, and homework calls. But it's not prima facie false.

By: mk

mk — Mon, 17 Nov 2008 12:20:53 +0000

Not as totally clear as you might think. In particular, burning fuel “makes the economy go round” — the ready access to cheap automobile transportation increases shopping trips, business trips to meet clients, employee access to a range of employment opportunities, etc. etc. The use of cheap coal increases business hours, reducing prices which increases consumer purchases, etc.

Take a different example: when a new road is proposed, all kinds of externality calculations are made. These include many positive externalities from increasing commerce. Many of the same externalities hold for cheap energy usage, but sometimes these are not included in the externality calculations because there is only a focus on environmental externalities.

Now, if there is a consensus that adds all these externalities up and gets a negative number, that invalidates what I just said. But from what I remember of the literature there is not such a consensus.

By: Paul Zrimsek

Paul Zrimsek — Mon, 17 Nov 2008 10:00:25 +0000

Just to be clear, you do realize that our presumed inability to calculate the optimal carbon tax applies just as much to a tax rate of zero as it does to any other tax rate… correct?

By: Paul Zrimsek

Paul Zrimsek — Mon, 17 Nov 2008 01:42:53 +0000

If the government doesn't know the cost of emissions, then a fortiori it doesn't know the correct number of permits to put on the market.

By: webgrrl

webgrrl — Mon, 17 Nov 2008 01:15:02 +0000

Paul, emissions markets have been proven to work; NOX and SOX are great. Acid rain really is no longer a problem because of emissions trading. Why would carbon be any different than NOX and SOX?

As you may know, the carbon market in the Northeast US has already begun and the Western Climate Initiative, which includes many Western States, most of Canada, and with Florida and maybe some of Mexico joining. But regionalty won't work, since the carbon permits aren't currently fungible between them at this stage. The only way to sanity is 1 national market.

But I'll go even farther - we also need a water market, and probably a fisheries market too.

By: aphor

aphor — Sun, 16 Nov 2008 23:41:37 +0000

Is it necessary for the tax to be optimal for it to be practical?

By: Pithlord

Pithlord — Sun, 16 Nov 2008 19:22:24 +0000

If we don't know whether the consequences are good or bad, we still know that the externality is negative — on the reasonable assumption that we are risk-averse.

By: ArtD0dger

ArtD0dger — Sun, 16 Nov 2008 18:06:45 +0000

Yglesias' post is indeed spot-on, and it couldn't contrast more with the swam of comments to you last post lobbing insults at your supposed “market as god” economics.

I wonder how long young Matthew will be able to maintain even a patina of leftism on his political worldview.

By: skypotato124550

skypotato124550 — Sun, 16 Nov 2008 15:40:22 +0000

propping of failing industries began in the 1970s, stopped when monetarism was en vogue, then started up again. its fairly obvious that this leads to inflation, falling profits and the 'zombie firms' as described above.

the problem with allowing things to collapse, is, well, it hurts. are we as a society prepared to risk a broad collapse? it wont be limited to GM! it will be indiscriminate and encompassing!

personally i think both solutions to crisis are stupid. there must be another reason why this keeps on happening, and there must be a better solution.