On Friday, the U.S. Department of Energy (DOE) announced that it would revise the definition of “shower head”. The proposed action shows that the Trump administration is trying to increase consumer water pressure in 2020. Although the Department of Energy is generally prevented from lowering its energy standards, Trump’s Department of Energy has found a solution to provide more water flow to frustrated bathers by changing the definition of terms such as shower head and “body spray.
Although energy regulations certainly have some advantages, they influence people to freely choose the core of products that they think are most suitable for themselves and their families. DOE product regulations affect everything from light bulbs to ceiling fans to refrigerators, even the small clock on the microwave. One of the goals of the
energy efficiency regulations is obvious and noble: to improve the environment. By passing regulations that make shower heads use less water, theoretically more water can be used for other needs (assuming people don’t just shower longer). Places like California, which has suffered from a drought, highlight why water conservation is so important now. Energy regulations can also reduce air pollution, including the carbon dioxide emissions that cause climate change.
This rationale, to reduce energy use to protect the environment, requires consumers to sacrifice for broader social goals. Yes, consumers prefer a stronger flow of water, but perhaps water conservation is more important than your comfort, so we are willing to bear this cost to achieve greater social benefits.
However, this is not always the logic used by environmentalists and regulators to justify these rules. Instead, they often claim that their regulations are good for consumers and the environment. They told us that reducing energy use is good for the environment, but it can also save utility bills, which is a benefit (not a cost) for consumers.
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If these statements sound too good to be true, they should do it. The energy regulations of the US Department of Energy benefit consumers of these products in the same way that grocery stores prohibit. Of course, it can greatly reduce the family’s monthly expenses, but only because it is more difficult for people to find food.
When environmentalists and regulators claim that they improve consumers’ lives by banning products that they would otherwise buy, what they really mean is that consumers are making decisions that they do not approve of. These enlightened people can make better decisions for them.
Although the claim that consumers are getting better because of fewer choices may be false, in a sense, environmental activists and regulators are right. The cost savings from reduced energy use is, in fact, a benefit of efficiency regulations. The main beneficiaries are not the consumers of these products. Chapter
You Are Not Alone Even many professional economists have not understood this point.
Consider an example. Imagine that the government decided to ban the installation of air conditioners in the cabs of all tractor trailers nationwide. What is the cost of this requirement? Mainly the comfort of the truck driver. Sweaty truck drivers across the country can resist and push hard to avoid implementation of this regulation (which may explain why such regulations will not be introduced soon).
But what are the benefits? In addition to environmental benefits, the cost of trailer cabs may be reduced because the manufacturers of these vehicles can meet fewer consumer demands. The cost of driving these vehicles on road trips may also be reduced. Off-site, it is easy to imagine that, according to this regulation, it will be cheaper to transport products across the country by truck, and some of the savings will be passed on to consumers across the country.
Therefore, the regulation establishes a clear trade-off between the comfort of truck drivers and the slight increase in consumer welfare. Is the compensation worth it? If you are a truck driver, you may refuse. Your comfort is more important to you. In addition, although the benefits to consumers may be great in general, they may be too small in individual cases to motivate anyone to promote this particular regulation.
Similarly, you can think of shower head efficiency adjustment as a cost reduction for operating economy. Now less investment (water in this case) is needed to prepare workers for work. From an economic point of view, compared to inputs such as food, shelter and housing, we will get any production done by more workers. It is true that the shower nozzle regulations will lose a comfortable shower experience, but you cannot invest the experience in your account to earn various compound interest generated by the production workers in the market. These compounding returns stimulate reinvestment and growth, and indirectly benefit consumers in other ways.
Both examples emphasize that consumer preferences are often inefficient. Those who prefer to use a heavier stream of water in the shower or a comfortable air conditioner while driving have a worse impact on these energy regulations. But at the same time, the efficiency gains brought about by higher production have improved consumer conditions in other ways.
The fact that consumer preferences are often ineffective is not even understood by many economists. The economic concept of efficiency is an impossible fairy tale. If we all have effective preferences, each of us will work as a hedge fund manager 80 hours a week while saving as much of our savings as possible and living like a monk. This is clearly against human nature, which is why many economists respond by assuming that what consumers want must be effective.
Therefore, just as environmentalists often mistakenly assume that consumers improve by forcing them to act in accordance with environmental priorities, economists often mistakenly assume that when one group of consumers is successful, society as a whole must improve. This error is called

By Peter

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