Strangled by Carbon Monoxide and Regulations
More red-tape rules that cost more than they're worth.
-
Tools:
On November 16, 2012, USA Today announced yet another massive and urgent threat to public health. "Hotel guests face carbon monoxide risk" pointed out that 8 hotel guests had died of Carbon Monoxide (CO) poisoning and 170 had been treated for fumes since 2010.
That works out to about 3 deaths and 55 hospital treatments per year. Shock! Horror! Three whole deaths! Something Must Be Done!
Advocacy groups argue that state and local fire codes should require CO detectors in all hotel rooms. These detectors cost about $100 each. Unlike smoke detectors which last as long as their batteries are replaced, CO detectors have to be replaced every 5 years because the sensor deteriorates.
Smoke detectors cost much less to buy, and maintenance costs are about $2 for new batteries every couple of years. That works out to about $3 per room per year.
CO detectors, in contrast, cost $20 per year plus installation because they have to be replaced, you can't just change batteries. They'll probably turn out to contain hazardous materials, too, which will increase disposal costs. Ignoring installation and disposal costs, CO alarms will cost $20 per room per year just to buy a new one every 5 years.
The American Hotel & Lodging Association reports that there are 4.9 million guest rooms in 51,214 hotels and models with 15 rooms or more. At $20 per room per year, CO detection in hotel rooms would cost at least $98 million per year. The cost per life saved would be more than $30 million, which is even more than the cost per life saved by air bags in cars.
Bringing in an additional $98 million per year would be a benefit for the alarm industry, but the $98 million would come out of the pockets of people who rent hotel rooms. It wouldn't bother our ruling elites who stay in high-priced hotels at taxpayer expense, but it would hurt those of us who must scrimp on our accommodations. No matter whom they benefit, regulations always cost We The People a lot of money.
The Dilemma
Unfortunately, we do need some rules; history shows that anarchy doesn't work. Every society needs laws and rules to govern how people interact.
The goal should be to apply the minimum set of rules which will order society without limiting people's ability to make the economy grow, but the rule-making process is bound up in politics. Instead of trying to write rules to make the system work, politicians urge the bureaucrats to write rules to support their personal agendas. Lawyers love running for office so they can pass laws and then charge us big bucks to explain the laws they just passed, for example.
The advocates' problem is that just about all of the sensible regulations have already been passed, but they have to argue about something. $98 million to save 3 lives per year might be OK if we had infinite money, but we don't. Although the economy grows over time, it's of fixed size in any given year. $98 million spent on CO alarms is $98 million not spent on schools, or highway safety, or medical care. To paraphrase Mr. Romney, if we weren't already spending $98 million per year on CO alarms, would we borrow money from the Chinese to do it?
The USA Today article is another example of the media helping advocates drum up a new concern. If the alarm industry lobbyists are able to get new laws passed requiring CO detectors in addition to the smoke detectors hotels already have, We the People will be the poorer for it.
Going with the Flow
Mr. Obama has made it very clear that he intends to increase regulations of industries such as electricity generation which he doesn't favor. It'll be a lot easier to get expensive new laws passed in such a climate. Get set for higher hotel bills along with higher electric bills!
-
Tools:
What does Chinese history have to teach America that Joe Biden doesn't know?
By contrast with some gases carbon monoxide is undoubtedly lethal and a leaky car exhaust usually the prime offender. By definition, would be suicides take this route. Being lighter than air, it rises fairly quickly and according to some plays a part in the greenhouse effect: it depends on how far you believe that's going. It is also unstable and bonds readily with other compounds to become less than toxic.
If trapped, it can be compressed and used commercially but that would be too easy. Far easier to tie everyone down with unnecessary regulations: by any measure, carbon dioxide, CO2 is distinctly more deadly. This is taught in first year science courses at most high schools.
Looked at another way the added cost is $0.11 to rent a room assuming that each room is rented half of the year ($20 / 185.5 days). I personally would be happy to pay that added price for the added, albeit very small, added safety. My landlord requires that I maintain the CO detector that he installed because a neighbor of his owns the home in which a family of vacationers were killed in Aspen by CO. I'm happy to pay an extra $20 per year on my rent to do that.
Putting it at '3 lives' raises the question, how many lives would it take for this to 'make sense' at what point does it become 'worth it' to save a life. If you're one of those 3 lives or if one of them is your family member of course $98 million is worth it! If you're not then a penny is too much. Where do you draw the line as a society, 100 lives? 1000? Or put another way, how much is each life worth. Are we, as a society, willing to pay $10 million to save a life? 1 million? 1 thousand? Where is that line when it starts 'making sense.' This is a real question by the way. After all I think its clear that 1 trillion is too much to pay to save a single life, 1 penny is worth it. There is a point some where in between that is the magic number and I honestly would like to discuss what it is.
The question isn't 'is $20 per year per room worth it to save 3 lives' the question is should it be mandated and how is it mandated. After all not every room is heated by something that could potentially release CO. So any room with a CO detector that has effectively 0% chance of it happening is obviously true waste so we can get rid of those. Not sure how much that would save but a decent amount. If we do want this to be regulated by the free market where someone like myself could choose to stay at hotels that have CO detectors should we mandate that they disclose if they have CO detectors in their rooms?
Leaving things like this to the free market are problematic because capitalism as a theory depends on total knowledge of the system. Which obviously in real life isn't so much possible. So how do we allow people freedom of choice while still providing the needed information. And just how much are we willing to pay any given life, knowing that it could be yours (you know, that 3 in 311 million chance).
Jonyfries, you've hit on precisely the question - how much is a life worth? Because if you spend $X billion on saving one life, that's $X billion you can't spend on schools, roads, or going to the movies.
Unfortunately, there's a corollary question which Scragged has explored several times in the context of healthcare: is everyone's life worth the same? Morally, of course they are. Economically, not so much:
http://www.scragged.com/articles/what-price-a-life
And then the final question becomes: who gets to make the choice? Some government bureaucrat? Or the invisible hand of the market? Trusting to the market may seem harsh, but history shows bureaucratic fiat ends up far, far worse.
@jonyfries made some excellent points except for this:
"because capitalism as a theory depends on total knowledge of the system"
This argument is often used by anti-capitalists to discredit it since, after all, no one really has totaly knowledge of any system. Thus, Fair Trade will always produce a loser.
Capitalism not only thrives in scenarios in which one or more parties are misinformed, but in fact it helps to CREATE information about the system which leads to more-successful subsequent trades.
Since our dear leader opposes the electrical industry, suggest we turn his lights off.
@lfon
Capitalism as a theory does depend on total knowledge. That is how the market ensures minimal price and maximum quality of goods. Companies and individuals are 'punished' for charging too much or providing inferior service or whatever else. However, in my little town almost no one even knew there was an office depot in town and so staples got all of the business, regardless of if that was in fact the better location.
A great example is that people think Wal-Mart is cheaper but don't realize that the product that you get from Wal-Mart is not what you'd get else where:
http://www.businessweek.com/innovate/NussbaumOnDesign/archives/2007/02/can_this_be_true_of_wal-mart.html
While Capitalism can function without perfect knowledge is becomes inefficient, still better than any currently available models but inefficient never-the-less.
@Petrarch
That is all well and good but that doesn't answer the questions how much is any given life worth. It is absolutely true that the President is and should be worth more than I am at the moment. The question that we face here is different, the question is how much is any given life worth, not knowing whos 'given' life it will be. As with any pure insurance product (which is really what we're talking about here) it is worth far more than the charged price if you need it and nothing if you don't. So how much more are you willing to pay for a hotel room to provide yourself the freedom to know that you do not have a 3 in 311 million chance of dying in a hotel room this year?
@jonyfries
You are correct, Capitalism can be inefficient when knowledge is incomplete, BUT it is the very best at forcing people to correct themselves when they operate on incomplete knowledge. Capitalism is indeed lousy, until you compare it with all the other economic systems we've tried.
@jonyfries, jamie, et al:
You're still missing it. There's a huge misconception about capitalism going on here.
There is ALMOST NEVER complete knowledge on any good or service in a free market.
There CANNOT be.
That's why liberals are always into "consumer advocacy". They know it's easy to bring up stuff the buyer and seller weren't aware of at the time of the trade.
Suppose you're buying a car. Does the buyer know 100% without any doubt that the car will function as the seller claims? Does the SELLER even know that the car will function as HE thinks it will? Of course not. Even if they both have the most knowledge they can possibly have at the time of the trade, they still don't have COMPLETE knowledge of who will get the best outcome from the trade. The car could die of unknown reasons in 6 months regardless of the seller's good intentions.
The best you get in a free market is (1) good intentions and (2) consistent rule of law (viz. enforcement of contracts). You can't do any better.
How complete the general knowledge of a good or service is based, in part, on less-complete knowledges in the past.
How do you know that a certain brand is better than its competitors? Because other people, who made trades in the past based on less-complete knowledge, have provided feedback to the marketplace thus increasing the collective amount of knowledge.
Don't fall for the liberal lie. Capitalsim is a ongoing learning experience by it's nature.
@lfon
We're not actually disagreeing with you on anything. The theory of capitalism does in fact rely on perfect knowledge. The theory of capitalism is rather utopian. Everyone acting as rational agents with perfect knowledge to force the most utility out of the system for themselves while never acting in any way that would harm the person you're doing business with.
The reality of capitalism is as you have stated it. It is still, thus far, the best economic system developed. Although modern capitalism is looking more and more like mercantilism but that is an entirely different argument. Capitalism doesn't work very well without any consumer protection however, because people get cheated and swindled. This is why 'snake oil' is still part of our vocabulary. Without any checks on business they would be able to lie about anything. And people would believe them and buy things that at best don't do any harm to them.
None of this however addresses the crux of the issue of the article above. What are you willing to have the government mandate, what cost would be acceptable to save a single life that could be yours or a family members. Perhaps the more important questions is how do we find that number. As I stated above, obviously 1 trillion is too much to save any given life and 1 penny is obviously worth spending to save a given life. So where in between do you start changing your belief that it is not appropriate for the government to mandate it (local, state, or fed) to switch around to the belief that it is appropriate.
Your Snake Oil reference proves my point. Society didn't need regulations to get rid of Snake Oil salesmen. The market took care of the problem on its own. The term sprang up **organically** as consumers talked to one another. That's what the free market does. It takes imperfect trades and refines them over time. Bad actors get flushed out. "Checks" on business already exist as a natural part of that process.
After reading this article and the comments that keep coming in it seemed as though both sides have good arguments. Here is a solution that would answer the question. Let's take one hotel for example. At the front desk there is a sign that says, "Carbon Monoxide alarms available for rent for $1 per night". Is there any doubt that the hotel would probably rent a lot of the devices and make a profit. I realize that the hotel owners don't want to alarm their guests of a potential hazard and that their hotel is more dangerous than other hotels. It would never happen in real life because of the negativity of the sign but it does shows, in my opinion, the validity of the desire for most individuals to not take chances however small they may be. I do not want government intrusion on this topic but will wait on capitalism to take the initiative. Some hotel chain will start advertising that they are CO protected and they will gain an advantage over the competition. Just imagine the advertising, "We have just installed the carbon monoxide detectors in each room to protect you, our valued guest from the minuscule hazard". This could be done in conjunction with new policies that stressed better guest services in the hotel. It would drive guests to this chain in order to protect themselves from the CO hazard and potentially move them from staying at hotel chain A to hotel chain B. Capitalism is always the best way to do this. Just wait and see, this will happen.
Snake oil is alive and well, one of the current big ones is anti-bacterial soap which in fact has no utility in normal homes and has negative health effects:
http://cid.oxfordjournals.org/content/45/Supplement_2/S137.long
http://www.dailymail.co.uk/health/article-2118871/How-keeping-children-clean-wreck-immune-systems.html
http://hope-ngo.com/Portals/0/PDF/SoapHealth%20ARI%20Lancet%20Man%20Report%203.pdf
http://brainblogger.com/2008/10/20/household-antibacterial-products-and-increased-antimicrobial-resistance/
Quite simply people are very bad at making decisions. We search for meaning where there is none and reject meaning where it exists. How we make decisions is quite simply bad.
http://www.ted.com/talks/dan_gilbert_researches_happiness.html
No that doesn't mean people at the top should make the decisions for us, after all they do all the same things that people not at the top do. But when given incredible power suddenly those terrible decisions destroy society instead of a single person.
I do very much like Bassboat's idea, and I would gladly pay the extra dollar. Unfortunately he is correct that it would simply scare most people, I believe. "What do you mean a CO detector, you're putting me into a room that could kill me!" Which is of course true but they forget to notice that they were going to be in such a room regardless.
To me the main issue is the idea that people should be responsible for themselves. But people are incapable of doing that effectively because it is impossible to
1) Be able to know the relative risks
2) Understand risk
3) Deal with risk objectively
I have now worked in Property Insurance, Life and Annuities, and Health Insurance industries in different capacities. In each case the consumer doesn't understand what they are buying, what it means, and what how it protects them. In each case the other people that work in it are annoyed that the general population buy products without knowing how they work. In each case when asked about how the other insurances work they don't have any idea.
I quite simply can not know enough about cars, electronics, insurance, houses, investments, blenders, stoves, tables, chairs... and every other product that is sold to be able to make good decisions. So I have to trust that the sales man in front of me is an honest man and thats all I really have to go on. You can't trust reviews either, many of the are written by the manufacturers or sellers. So we wait for scandals and a company gets a bad reputation, and maybe they go out of business or may be they clean up or most likely the pretend to clean up and everyone forgets about it.
In the end it comes to this, millions of people make individual bad decisions is better than ten people make the same bad decision for millions of people. Capitalism is a terrible system, its just the best thing that exists.
Manorialism doesn't work beyond very small groups. Mercantilism puts money above everything else leading to technically rich nations that don't have any thing but gold. Communism has a small group of people make bad decisions for everyone, destroying individuals ability to take advantage of local advantages. Marxism believes that humans are capable of being completely selfless for the greater good. Socialism provides incentives for people to not attempt to be productive.
Leaving Capitalism. yeah is pretty good. It works, after a sort. You can't honestly tell me that you can look at the misery in the world and say that its an 'ideal' system though. Nor can you possibly claim that the invisible hand can actually work with any efficiency.
Snake oil is alive and well, one of the current big ones is anti-bacterial soap which in fact has no utility in normal homes and has negative health effects:
http://cid.oxfordjournals.org/content/45/Supplement_2/S137.long
http://www.dailymail.co.uk/health/article-2118871/How-keeping-children-clean-wreck-immune-systems.html
http://hope-ngo.com/Portals/0/PDF/SoapHealth%20ARI%20Lancet%20Man%20Report%203.pdf
http://brainblogger.com/2008/10/20/household-antibacterial-products-and-increased-antimicrobial-resistance/
Quite simply people are very bad at making decisions. We search for meaning where there is none and reject meaning where it exists. How we make decisions is quite simply bad.
http://www.ted.com/talks/dan_gilbert_researches_happiness.html
No that doesn't mean people at the top should make the decisions for us, after all they do all the same things that people not at the top do. But when given incredible power suddenly those terrible decisions destroy society instead of a single person.
I do very much like Bassboat's idea, and I would gladly pay the extra dollar. Unfortunately he is correct that it would simply scare most people, I believe. "What do you mean a CO detector, you're putting me into a room that could kill me!" Which is of course true but they forget to notice that they were going to be in such a room regardless.
To me the main issue is the idea that people should be responsible for themselves. But people are incapable of doing that effectively because it is impossible to
1) Be able to know the relative risks
2) Understand risk
3) Deal with risk objectively
I have now worked in Property Insurance, Life and Annuities, and Health Insurance industries in different capacities. In each case the consumer doesn't understand what they are buying, what it means, and what how it protects them. In each case the other people that work in it are annoyed that the general population buy products without knowing how they work. In each case when asked about how the other insurances work they don't have any idea.
I quite simply can not know enough about cars, electronics, insurance, houses, investments, blenders, stoves, tables, chairs... and every other product that is sold to be able to make good decisions. So I have to trust that the sales man in front of me is an honest man and thats all I really have to go on. You can't trust reviews either, many of the are written by the manufacturers or sellers. So we wait for scandals and a company gets a bad reputation, and maybe they go out of business or may be they clean up or most likely the pretend to clean up and everyone forgets about it.
In the end it comes to this, millions of people make individual bad decisions is better than ten people make the same bad decision for millions of people. Capitalism is a terrible system, its just the best thing that exists.
Manorialism doesn't work beyond very small groups. Mercantilism puts money above everything else leading to technically rich nations that don't have any thing but gold. Communism has a small group of people make bad decisions for everyone, destroying individuals ability to take advantage of local advantages. Marxism believes that humans are capable of being completely selfless for the greater good. Socialism provides incentives for people to not attempt to be productive.
Leaving Capitalism. yeah is pretty good. It works, after a sort. You can't honestly tell me that you can look at the misery in the world and say that its an 'ideal' system though. Nor can you possibly claim that the invisible hand can actually work with any efficiency.
What Capitalism does, what makes it the best system thus far developed is quite simply that it allows for individuals to take advantage of local abilities and advantages to provide for the general welfare. It encourages people to make a better tomorrow for everyone by giving them the incentive of current advantage over other people in society. After all, with the possible exception of the homeless, the poorest people in America are significantly better off than the serfs of medieval europe. So while the system doesn't solve issues of today it provides for a general improvement for nearly all persons over time.
So in the end it comes to this. How much current suffering is acceptable to allow for some given amount of improvement in the GDP. Given that GDP allows for the improvement of general welfare over time, some current suffering is obviously needed. This is just the re-phrasing of the question I asked in a previous post. What are willing to spend, in what ways, with what kinds of mandates and from whom. No matter how much some people want this to be black and white (on both sides) it quite simply is not that easy. The government can not be trusted to try to keep us safe, nor can the general population be expected to know and understand enough to keep themselves safe on every issue.
@jonyfries:
You're wondering further and further away from reality here.
OF COURSE snake oil still exists. That's the whole point. It will always exist, and there's nothing you can do to stop it. And there's nothing the government can do to stop it no matter how many FDAs and FTCs they throw at the problem because the snake oil types will just figure out who to buy.
You're searching for some sort of market utopia that will never exists. To some extent, capitalism needs bad actors to keep consumers vigilant.
Look at what you just said. You yourself (a consumer) have declared antibaterial soaps as unhelpful and dangerous.
**Why?**
Because of an all knowing government watch dog that alerted you?
Because God told you?
No, because YOU FIGURED IT OUT BY BEING ALERT. You've read science journals. You follow science news in the media. You've joined Consumer Reports or online versions of the same thing.
None of that has anything to do with government.
You're falling for the liberal lie over and over here. Consumers will lose now and then and consumers will pretty much always have incopmlete knowledge about what they buy.
Again, bigger stronger governmental influence won't change that either. Even with 10 FDAs and FTCs, we would STILL have snake oil on the market.
In the abstract, this is why progressivism doesn't work. The very people insisting that the market needs help disprove it in the way they live their own lives.
"You can't honestly tell me that you can look at the misery in the world and say that its an 'ideal' system though"
I very much can and will. It's EXTREMELY ideal if we review world history. Everytime it's tried, it has increased wealth (USSR), frees individuals (South American at one time) and topples authoritarian regimes (China).
Economic misery almost always equates to central management of one kind or another.
It's okay for consumers to have to think now and then. Consumers don't need to be controlled and failure is okay.
To go off the subject even further allow me to add to Ifon's comments. China has certainly been changed by capitalism and that is exactly why we should have never blockaded Cuba. Capitalism would have destroyed Castro years ago if we had traded and traveled to Cuba. When people see other people with goodies they typically want some too. As for the discovery aspect Ifon is spot on here too. Consumers are the ones that ferret out the snake oil types. The government agencies are always behind the curve and many times they get it wrong. Just money put in the back seat of a convertible and go down the interstate at 80 miles and hour and the money will disappear, that my friends is how government works.
Is capitalism the theoretically ideal system? No - a theocracy, where government is directly provided by an omniscient, omnipotent, all-wise God, is the only theoretically ideal system. As James Madison wrote in Federalist #51, "If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself."
But since that doesn't exist, yes, capitalism is the best system **we have yet come up with** and I think, given human nature as it truly is, also the theoretically bast system - because it attempts to harness the limitless power of human greed and use it for the general good. Socialism attempts to harness man's altruism and use that for the general good, and we see how well that doesn't work - there simply isn't enough altruism to get anywhere.
Sure consumers find the issues, but the problems with antibacterial soap have been known for decades and people still buy it. And sure I'm knowledgeable in that one area but I am not in the vast majority of areas. I do not have either the time nor the inclination to spend all of my free time researching the cost and benefits of each and every product I purchase.
Please try to tell people that they have not been improving their children's lives and have actually been damaging them and the world as a whole by using them. They will not believe you, you can show them the studies, they will not believe you.
I am not arguing that a different system works better, but unfettered capitalism leads to massive pollution and coal towns and other terrible things. Unfettered capitalism leads to massive suffering today. While at the same time providing for a better future by incentivising people to come up with products that people want.
There is a difference, lfon, between the best system currently imagined and ideal. Capitalism is not idea, it is the best system that has been attempted to date. You are absolutely correct that looking through history it is not possible to find a better system that would work on a global stage.
Its not quite true that capitalism has negative effects on authoritarian governments, after all the chinese leaders are doing just fine. There is no evidence that Authoritarian Capitalism doesn't work. In fact one can argue that Authoritarian Capitalism works better than Democratic Capitalism because when something needs done they don't have to go through the red tape of the people, it just gets done.
Capitalism is not a panacea, it doesn't not fix social problems. It is an economic system, it fixes wide spread poverty by providing jobs.
"...but the problems with antibacterial soap have been known for decades and people still buy it"
Which may be an indicator that the problems with antibaterial soap aren't as bad as you assert.
Are you willing to consider that you might be wrong?
With respect, often those that argue that the free market isn't working because consumers aren't making the right decision are themselves incorrect and unwilling to admit/consider that.
Of course I'd be willing to admit I was wrong, if there weren't hard numbers behind my assertions. People would rather hold to incorrect beliefs than admit that they're wrong. And yes I'm as guilty of it as you and every other human.
This is why I go far out of my way, perhaps further than reasonable as I've been told by many, to only believe that which is backed by numbers. You can look at the numbers, household that use antibacterial soap do not have a lower morbidity than those that use traditional soap. Antibacterial soap leads to more bacteria that is immune to traditional methods of killing bacteria.
Those are facts. Known for decades. The market can't fix it because people believe it works. Do even a small amount of research on cognitive biases and how people make decisions and you'll understand fairly quickly just how bad people really are. People are far from the rational actors that game theory imagines when they make their models
I am not attempting to say that Capitalism is bad, as I've attempted to strongly stress. Rather I am attempting to make its limitations known. You must understand the limitations of not just your ideological opponents ideas but also of your own. By all means fight for capitalism, but make sure that you are fighting for a system of capitalism (as it can take many forms) that will lead to the improvement of the general welfare and that you are living your own life in accord with a world that you want to live in.
It is true that humans are greedy and any system that doesn't allow for that is doomed to failure. However, it is also true that humans are altruistic and any system that doesn't allow for that will never achieve the the maximization of the general welfare.
The NYT understands that regulation and bad government are strangling the Indian economy but they can't see it happening here.
http://www.nytimes.com/2013/02/10/opinion/sunday/india-in-the-slow-lane.html
This weakness should also worry the rest of the world, which increasingly needs India to play a bigger role in the global economy. While India has been hurt by the economic troubles of Europe and the United States, its current problems are largely attributable to the passivity of Mr. Singh and Sonia Gandhi, the leader of the Indian National Congress Party, who put him in the job.
Under their leadership, the economy remains hobbled by widespread corruption, counterproductive regulations, weak infrastructure, and government ownership of most banks and many major corporations. As finance minister 20 years ago, Mr. Singh played an important role in freeing some areas of the economy from a stifling “license raj,” in which businesses were required to get government approval to set up shop and even to change production levels. But as prime minister he has done little to follow up on those important early reforms.
The finance minister, Palaniappan Chidambaram, appears to realize the urgent need to shore up the economy. In recent months, at his prodding, the government has begun making changes — for example, distributing subsidies like scholarships and pensions directly to citizens instead of channeling them through corrupt bureaucracies.
Of course, the Times doesn't see Mr. Obama's funneling taxpayer omney to his friends as corruption, they see it as fostering green energy, no matter how much of your money goes down the drain.