Sunday 27 November 2011

Illegal Washing Machines

"How Washington Ruined Your Washing Machine" talks about regulations banning washing machines that cost less but use more electricity:
Efficiency standards for washing machines aren't as well-known as those for light bulbs, which will effectively prohibit 100-watt incandescent bulbs next year. Nor are they the butt of jokes as low-flow toilets are. But in their quiet destruction of a highly affordable, perfectly satisfactory appliance, washer standards demonstrate the harmfulness of the ever-growing body of efficiency mandates.....

Front-loaders meet federal standards more easily than top-loaders. Because they don't fully immerse their laundry loads, they use less hot water and therefore less energy. But, as Americans are increasingly learning, front-loaders are expensive, often have mold problems, and don't let you toss in a wayward sock after they've started.

When the Department of Energy began raising the standard, it promised that "consumers will have the same range of clothes washers as they have today," and cleaning ability wouldn't be changed. That's not how it turned out.

In 2007, after the more stringent rules had kicked in, Consumer Reports noted that some top-loaders were leaving its test swatches "nearly as dirty as they were before washing." "For the first time in years," CR said, "we can't call any washer a Best Buy." Contrast that with the magazine's 1996 report that, "given warm enough water and a good detergent, any washing machine will get clothes clean." Those were the good old days....

Now Congress is at it once again. On March 10, the Senate Energy Committee held hearings on a bill to make efficiency standards even more stringent. The bill claims to implement "national consensus appliance agreements," but those in this consensus are the usual suspects: politicians pushing feel-good generalities, bureaucrats seeking expanded powers, environmentalists with little regard for American pocketbooks, and industries that stand to profit from a de facto ban on low-priced appliances. And there are green tax goodies for manufacturing high-efficiency models—the kind that already give so many tax credits to Whirlpool, for example, that the company will avoid paying taxes on its $619 million profit in 2010.

Amazingly, the consensus also includes so-called consumer groups such as the Consumer Federation of America and Consumers Union. ...


Do these regulations address a market failure? Why would anybody support them if they do not? Should consumers be allowed to buy the old 1996 washing machines?

19 comments:

  1. These regulations are just as the article pointed out, a "feel good" regulation. The Department of Energy aren't experts in washing machines and therefore don't understand the effects of their regulations.

    A similar issue is with CAFE standards. The government raises fuel requirements, but doesn't realize how it is making it more expensive for auto companies and causing them to produce cars that are lighter and not as safe. Consumers should be allowed to purchase the old washing machines if they want.

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  2. I agree with the comment above. The legislative realm is teeming with similar examples where policymakers follow through with stringent regulation in an information deficient scenario. The article itself points out that those who agree with newer regulations consist of politicians pushing feel good regulation, industry leaders seeking benefits such as tax exemptions, environmentalists with little regard for price increases on these washing machines. It seems funny that those conceding to this regulation all have personal goals other than simple energy savings. This article reminds me of a case I came across this past summer, where there was a similar support base for the inclusion of the European airline industry in the continental Emissions Trading Scheme. There were several academic articles where scientists mentioned that the inclusion might not cut pollution emission at all due to the design of the scheme, and that a better avenue would be to either further air-tighten the ETS or to avoid inclusion as airline carriers in this case would suffer deep cuts in profit margins for negligible changes in air pollution levels. However, there seemed to be so much support for keeping the scheme as it was and for inclusion, just so politicians could claim that they helped pass the legislation, so that a subset of environmentalists could help pass this feel good regulation, and so that some carriers that could avoid the profit margin damages because of their routing systems could weaken competition.

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  3. These regulations do cause market failure because the consumers value an easy to use washing machine (like one that doesn't produce mold and one that can open just after the load has started) more than an efficient one. This regulation is one for enviromentalists to give them selves a pat on the back. The consumers should be able to purchase an old washing machine if they want to.

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  4. Based on this article, it seems like the regulations are not working. In order for the regulations to be effective, they need to accomplish two goals. They need to make the machines more energy efficient, but they also need to satisfy user requirements (i.e. cleaning the clothes thoroughly and allowing for additional clothing items post starting the machines). If both of these goals are accomplished, the consumers will not want to buy the 1996 models of washing machines.

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  5. Well I think it depends what you value more, if you are part of the Siera Club you will say that the only thing that is alright if the most efficient use of our energy, as opposed to a wash machine enthusiast who may say that the least efficient is best because it is nostalgic. We must decide where we fall in the divide before we can judge what is best and what is not, and then make sure that we still have safety standards that ensure XYZ..

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  6. As someone who supports both sustainability and cleanliness, I am a little torn with this regulation. The regulation is meant to reduce energy usage and be beneficial to the environment and to the consumers pockets; however, the cost of purchasing a front-loading machine is more than a top-loader and on top of that there are some negative externalities like the inconvenience of not being able to pause the front-loaders. Because most American value conveniences over the protection of our environment (as we know all too well) this regulations will seemingly not be successful is a large percentage of cases.

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  7. I believe this regulation is not a good idea. The cost for energy saving is too high and not worth it. The supporters are either manufactures benefited from the regulation, politicians who take advantage of this as a political showcase, or environmentalists. Some consumers may support it because they have put too much value on saving energy without regard of cost-effective analysis, or because they will/already have the more expensive front-loaders any way, even without the regulation. I believe since washing machines actually cost a lot and the adverse effect of not meeting the requirements are far from devastating,consumers should actually be allowed to buy the old 1996 washing machines.

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  8. I think this is definitely a regulation that is installed as one to make emotions low. However, with this in play, we could certainly see some sort of market failure. Cost of energy saving is very high.

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  9. Maximilian Roedder1 December 2011 at 14:50

    In my opinion, this regulation shows how a good cause can lead to the most absurd consequences. There is no balance between the benefits the new regulation would bring and the additional costs it would cause for consumers.
    It is also the kind of regulation that looks like it potentially could have been strongly influenced by industry lobbyists.

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  10. I agree with many above in believing this is a "feel good" regulation. The tax benefits for producing energy-conscious washing machines are a great incentive but abruptly forcing manufacturers to do so is a different story. Would it be financially and economically worth it to subsidize washing machines? Would that create additional market failure? These are questions to consider, given the intent of the end result.

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  11. The regulations do not address a market failure, as the ones who created it did not have enough information to make the decision. The problem in this case is that there are much too broad policies being enforced in an area that requires much more study than just a "feel-good" regulation.

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  12. I don't see a problem with the regulation. I think it is important for government to step in and reduce waste. It is not expensive to be wasteful, so there is no incentive to use less.

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  14. I don't think this regulation will work because consumers will still want the old models of washing machine instead of the new ones. They value the old washing machines more than the new ones. As long as consumers value the old ones more, I think that there will be a market failure. The government needs to consider what consumers really want. When they decide to impose a regulation, they will need to consider a balance between consumers' value and environmental effects. When the marginal benefits equal to the marginal costs, there should be a regulation at that time.

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  15. The market failure here seems to be from government failure. Innovation comes when people are able to think freely without forced regulation from the government. These companies have the resources to create innovative products to reduce efficiency and government aid isn't necessary in this case, as evidenced by the lack of clarity in the market for washing machines.

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  16. Another thing that must be considered is if the government is planning to expend a significant portion of its budget to fight global warming. This reduction in carbon emissions will provide significant costs to these companies and the subsidies might be necessary to help support the increased compliance costs in the future.

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  17. This is an example of where it is important to look for a market failure. Keep in mind that ordinarily markets work well to maximize surplus, so having the government decide that people should not be allowed to buy the products they want needs justification. It is not irrational for a consumer to want to spend less for a washing machine that uses more water, especially if it also cleans better; indeed, one might better question the government's preference for saving water over consumer welfare.

    On the other hand, Vince is right that if one doesn't care about economic efficiency, and the ultimate goal is to use less water rather than make people better off then the regulations are a good idea even if there is no market failure.

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  18. I believe it would be wise for the government to consider the true effect of washing machine regulation. Certainly the intent was to reduce energy consumption gradually over several years while allowing producers to gradually reduce costs over the same period, which would then be passed on to the consumer. Without this reduction in cost, consumers have been forced to pay significantly more for front-load washers than the now extinct top-load washer (that producers do not make any more because of the government's tax incentive to produce front-load washers).

    Like most strict government regulation, the idea is great on paper but awful in practice. Consumers are forced to pay more for a washer, above and beyond the increased energy charges from a top-load, if they are even able to find a quality top-load washer in today's market. The government must reexamine the true impact of this regulation and weigh it against, what has proved to be, a much greater cost of regulation.

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  19. Isn't this the same discussion we have with cars. I mean a lot of people like the old 1988 Cadillac DeVille's with their 405 Horsepower Northstar V8 and no fuel injection, but we still ban Cadillac from bringing those old, high polluting engines back onto the market.

    I have a front loading washer/dryer from whirlpool, and it's amazing, so I'm not sure I agree with the argument that there is market failure. LIke the song says you can't always get what you want. Whether these regulations are being pushed by greedy companies and bureaucrats or for the sake of our environment they are a step in the right direction.

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