The Fed’s Dirty Laundry and Yours

by on September 11, 2007 at 8:00 am in Economics | Permalink

Not content to kill people with CAFE standards the Federal government is now messing up our laundry.  So called "energy-efficiency" standards have severely reduced the cleaning ability of new laundry marchines.  Who says?  Here is Consumer Reports:

Not so long ago you could count on most washers to get your clothes
very clean. Not anymore. Our latest tests found huge performance
differences among machines. Some left our stain-soaked swatches nearly
as dirty as they were before washing
. For best results, you’ll have to
spend $900 or more. (italics added)

What
happened? As of January, the U.S. Department of Energy has required
washers to use 21 percent less energy, a goal we wholeheartedly
support. But our tests have found that traditional top-loaders, those
with the familiar center-post agitators, are having a tough time
wringing out those savings without sacrificing cleaning ability, the
main reason you buy a washer. 

I too support the goal of having washers use 21 percent less energy.  Hell, I support the goal of having washers use no energy at all.  Let’s pass a law.

Energy efficiency sounds so nice.  Who could be against efficiency?  Tradeofs, however, cannot be avoided.  Thus, energy-efficiency really means that the government is going to choose how white your shirts are gonna be.

Ironically, the law could well reduce cleanliness and increase energy use.  If the new washers are as bad as Consumer Reports say they are people will just start to wash everything twice.

Addendum 1: Prominent members of a certain political party often promote the theory that "if we make them build it, the savings will come"
but, as we all know, ignoring tradeoffs is a sure sign of discredited crackpot economics.

Addendum 2: CEI suggests you email some virtual underwear to the Secretary of Energy in protest.   

Chris Meisenzahl September 11, 2007 at 8:19 am

Well-said, Dr. Tabarrok!

luispedro September 11, 2007 at 8:33 am

If the machine doesn’t wash my clothes, it’s not efficient. Zero, nada!

(Efficiency) = (Effect)/(Energy)

If you reduce (Energy) by 21%, it *does not* mean that efficiency rises. In fact, if (Effect) [in the current case, clean clothes] is reduced; then, Efficiency drops to zero.

ZZZ September 11, 2007 at 8:36 am

my prediction: Give it 3-5 years and the lower end washing machines (including top loaders) will work just fine with the new energy standards. In the long run, it seems entirely plausible that these types of regulations end up improving energy efficiency at reasonable cost (although I would have preferred an “energy tax” for less efficient machines, which is essentially the CAFE policy).

Dan September 11, 2007 at 9:00 am

Is it automatically bad for the government to decide how clean our shirts should be? Let’s say current detergent formulations were shown to kill 3 million babies annually via mother’s milk, and that mandating different formulations would lead to increased ring around the collar. Isn’t this a worthwhile tradeoff? Wouldn’t the state have a legitimate regulatory interest in that case? By banning lead in gasoline it’s possible the government decided how fast cars should go, but then again it does that anyway with speed limits. My question is whether this is *necessarily* bad, or whether you just object to the tradeoff in the washing machine example (my own domestic regulatory bete noire is low-flow toilets).

josh September 11, 2007 at 9:04 am

“Is it automatically bad for the government to decide how clean our shirts should be?”

I’m not even really that libertarian, but yes, obviously, duh. Are you joking?

Yan Li September 11, 2007 at 9:06 am

I think I would rather die if I have to eat less and wash my clothes by hand. On the other hand, if I die, I eat nothing and dirty no cloth. So everything comes to a wash – I wonder whether my washing machine could handle it.

Jim Caserta September 11, 2007 at 9:32 am

Which is safer, a chevy cavalier or honda civic? Which gets better mileage?

mington September 11, 2007 at 9:46 am

arghh…soon they’re going to be rationing how much toilet paper one can use…with the mandatory switch to energy-efficient bulbs approaching (I hate the light that those give off–much less pleasing than the “Reveal” type bulbs I prefer to use), aesthetics and personal hygiene are taking a big hit to “eco-friendliness.” I’d better stock up…

Acad Ronin September 11, 2007 at 9:54 am

Why 21% Why not 22%? For that matter, why not 100% less energy. Let’s give industry some real stretch goals. :-)

Vincent Clement September 11, 2007 at 10:06 am

Top loaders are so, 1990s. Front loaders are the way to go – and they use less water.

Katie September 11, 2007 at 10:07 am

Use a front loader.

mike September 11, 2007 at 10:37 am

here here. I’ve been disappointed in our brand new washer & dryer for months. more on the dryer side – it takes up to 2 hours to dry clothes in my 2007 dryer that took 1 hour in my previous 1987 dryer. Progress!

odograph September 11, 2007 at 10:39 am

BTW, the short answer to auto safety is to buy a Camry … a Camry hybrid if you swing that way ;-)

Alex Tabarrok September 11, 2007 at 11:07 am

Odograph, read carefully the paper you cite supports exactly the point I was making. What the paper says is that cheap, fuel efficient cars are less safe. In other words, holding price constant there is a tradeoff between fuel efficiency and safety so mandating “fuel efficiency” has encouraged people to buy less safe cars. All of this is pretty obvious. The paper makes these points but it elides them by focusing on the fact that it is possible to build an *expensive*, fuel efficient and safe car. Indeed, as CR notes there are expensive, “energy efficient,” washers as well but this is not much of a consolation to those who can’t afford a $900 washer or a $26,000 Camry hybrid as you recommend.

odograph September 11, 2007 at 11:15 am

Come on Alex, don’t cheat.

First, let’s remember that the median new car price in America is somewhere between $26-28K (data varies). So things like Camrys (and Priuses) are right in there, for the average buyer.

Second, let’s look at the safe and inexpensive models you ignored: Jeta, Civic, even Corolla. Those are all down and to the left from Explorer, Blazer, 4Runner. That is, they have a lower risk to their own drivers, and a lower risk to others.

Third, note that while the Tahoe and Suburban beat the Corolla on “risk to drivers” they do it while multiplying the “risk to drivers of other vehicles” by a factor of 3! What is the morality in that?

Fourth, note the cluster of Carvan, Voyager, and Windstar far to the left. They have the lowest risk to drivers, while generating much less risk to other drivers. They might even satisfy CAFE.

K. Williams September 11, 2007 at 11:39 am

“In other words, holding price constant there is a tradeoff between fuel efficiency and safety so mandating “fuel efficiency” has encouraged people to buy less safe cars. All of this is pretty obvious.”

I don’t think this is obvious at all. What does it mean to “hold price constant” in this case? The average SUV is not cheaper than the average midsize car — is not cheaper, for example, than a Camry or an Accord or a Civic. So where’s the tradeoff between fuel efficiency and safety? If everyone who buys an SUV spends the money instead on a Camry, they get much better fuel efficiency and more, not less, safety.

Also, Odograph’s point about combined risk is essential: from a regulatory point of view, what we’re concerned about is not the safety of a car for the driver alone, but for everyone on the road.

odograph September 11, 2007 at 11:50 am

Wow, this report shows the British version of the Chrysler Voyager getting 36.7 combined (British) MPG. That works out to about 31 MPG for the US Gallon.

If you want another interesting discussion of mutual benefits and risk you could talk about the US resistance to passenger diesel cars, based on their particulate emissions and associated lung cancer deaths.

Apparently Europeans place a higher value on energy independence and a lower value on lung cancer.

Jim Caserta September 11, 2007 at 11:53 am

Driver habits have to be almost as important to safety as car size/weight/fuel economy. From recent data, the Grand Marquis is 67% more dangerous than a Crown Vic, when they are almost identical cars. There are as wide variations in within-class safety as inter-class safety. A 4wd explorer for 2002-2004 had a death rate of 47/million reg. vehicle yrs, while a 4-runner had 13, while an accord 4-door 35. Car model correlates to driving habits which impacts safety, so you can’t just say that these types of models are safer using crash data without controlling for driving habits.

spencer September 11, 2007 at 12:00 pm

Your argument that CAFE kills people ignores the lives of American military lost in defending our access to middle east oil.

If you incorporated that into your analysis it would show the opposite conclusion.

We really need to use total cost is our calculations than people are less likely to think your conclusion is biased.

washcycle September 11, 2007 at 12:18 pm

Another reason why implementing the new efficiency standards is good (for existing technology) is that it forces everyone to retool. If Companies A makes the Wasteful 9000 and Company B makes the Wasterator they both probably sell for the same price. Comapny B invents some way to do your laundry using 21% less electricity and retools their factory at huge cost. So they sell their new washing machine – the Green and Clean – for slightly more to capture the additinal investment. But people don’t do a good job of considering the lifetime cost of their choice (and as noted above the energy costs don’t capture the externalities) so the Wasteful 9000 crushes it in the market. Good you say.

But we’d all be better off if everyone bought the Green and Clean. It’s a classic Tragedy of the Commons problem, and if there is one reason why government should exist, it’s to address TotC issues.

odograph September 11, 2007 at 12:38 pm

“Since lighter, smaller cars are generally less safe” – that is a naked assertion, and countered by the “cluster” of high quality small cars in the bottom left of figure 3.

Indeed aren’t those cars “better” than the overall center, for all cars?

(BTW, my front-loading washer dryer combo cost $899 for the two (with a year’s detergent). You can pay $900 for just a washer, but like cherry-picking cars, that does not tell the whole story.)

Alex Tabarrok September 11, 2007 at 12:46 pm

You are evading. Name the tradeoff!

odograph September 11, 2007 at 12:52 pm

I’m not following maybe … what is the trade-off the consumer feels “versus mpg?”

Status? The very perception that an efficient car implies penury?

Performance? The on-ramp “arms race” that moved a 6 sec 0-60 time from rare to common?

Capacity? The idea, as Jim notes, that we should size our cars for our yearly highest-case burden rather than our more common ones?

… I’m sure there are more (I wrestle with this as I try to figger the best way to carry a 17ft sea kayak with a Prius)

Jim September 11, 2007 at 1:05 pm

The ‘in general’ tradeoff of size vs. safety does not always hold. Holding other things constant, you will always get better mileage making a car lighter or with a smaller engine, while you will not always make a car safer, by any measure, by making it bigger/heavier. A 4wd ford excursion has over twice the rate of driver death than a 4wd ford explorer, which has over 3x the driver fatalities of a 4-runner Also, holding mileage relatively constant, you can get a large difference in safety – 4dr chevy cavalier has twice the driver fatalities as a 4dr civic.

Obviously you could simulataneously improve safety, as measured by weighted average driver fatality rates, and mileage by shifting explorers to 4runners and cavaliers to civics and a few explorers to civics also. That is assuming that the selection of the driver has no impact on safety.

Dolohov September 11, 2007 at 1:23 pm

Oh, I forgot to add: If you’re that concerned that the reduced weight will increase traffic deaths at the price of energy efficiency, then you simply need to mandate carpooling! The additional weight from three or four sweating, whining coworkers and their belongings, all crammed into your Corolla, will easily add enough weight to offset the difference, while still representing a large overall gain in fuel efficiency! Problem solved!

… yeah, I’m running away now.

jb September 11, 2007 at 1:33 pm

Random observations

- it’s amazing that some people believe that the market will adapt to higher CAFE and EnergyStar standards, but won’t adapt to Peak Oil.

- it’s amazing to me that some people claim that we’re in the middle east to preserve our access to middle eastern oil, when we import less than 12 percent from the middle east: http://www.sustainabilityinstitute.org/dhm_archive/index.php?display_article=vn355energyfactsed

- it’s amazing to me that people are so adept at seeing the unintended consequences, the externalities and all the deep, dark ramifications… of things that they dislike. Things they like? – not so much.

- it’s amazing how people will ignore burdens (increased cost, reduced flexibility) placed on the poor by their political advocacies, but use the “suffering poor” as a foundation for so much of their platform(s) elsewhere.

Really, it just amazes me how many people use their ideology as an excuse to not really think about things.

Mcwop September 11, 2007 at 1:44 pm

Most washers and dryers run on electricity (some dryers on nat gas). Government controls electricity prices usually trying to keep those prices low. The end result is inefficient appliances becuause electricity may be artificially cheap.

joan September 11, 2007 at 1:51 pm

“The paper makes these points but it elides them by focusing on the fact that it is possible to build an *expensive*, fuel efficient and safe car.”

The civic is fuel efficient, cheap, and the 10th best in the safety ratings. Only two of the large cars do better.

K. Williams September 11, 2007 at 2:06 pm

Also, Alex, I don’t understand what your hypothesis about pricing is when you suggest that the only reason people are buying cheap, light cars is because of CAFE standards. You seem to be arguing that in the absence of CAFE standards, there would be plenty of cheap, heavy new cars or SUVs for these people to buy. But that’s a nonsensical position. According to what economic logic would a heavier car with more metal and materials in it be cheaper than a tin can like the Neon?

Jack September 11, 2007 at 2:27 pm

So why are US roads so dangerous when the cars are relatively big and not fuel efficient?

Safety through car size is a positional thing, not absolute so an individual driving a car will be safer if it is larger but putting everyone in larger cars may not make the population safer.

If US cars were more fuel efficient it might even be possible to export them!

Also, what’s wrong with front loaders?

I don’t know if this claim is being made in bad faith or if you just have a very underdeveloped sense of statistical meaning.

Alex Tabarrok September 11, 2007 at 2:37 pm

The National Academy of Sciences concluded that CAFE standards probably killed about 2000 people in 1993. You can find the study here

http://www.nap.edu/openbook.php?isbn=0309076013

My point is simply that tradeoffs exist. Many people are denying this. Obviously, safety is not the only margin on which the tradeoff exists; there are lots of other margins – as I noted it’s possible to have an expensive, safe car or it’s possible to have cars that cut back on other features to make room for safety at the same price. Citing specific cars just means that on that car the tradeoff is different – no surprise. One of the tradeoffs for cars, however, is safety and you see this in the averages.

JRip September 11, 2007 at 2:43 pm

PS our next washer will be a Front Loader. Why? Our clothes will last longer and will be cleaner (than our current, energy-inefficient Top Loader with the center agitator.
[a top line Maytag].

Having cleaner clothes is a plus. Energy savings and water savings and detergent savings are a nice bonus too but the longevity of the clothing is the return on investment. Esp those of the ladies in the house.

odograph September 11, 2007 at 2:56 pm

No one is denying that trade-offs exist, we are disagreeing that those trade-offs are one-dimensional.

Regarding The National Academy of Sciences publication, I note that Appendix A, “Dissent on Safety Issues: Fuel Economy and Highway Safety” makes many of the same points we do.

odograph September 11, 2007 at 3:04 pm

Sudden thought … how many of those extra deaths were in Neons?

If some number were, what would the answer be to that? Fault CAFE, or fault the Neon?

Jim September 11, 2007 at 3:20 pm

Included in those that disagree about the size/safety tradeoff are 2 authors of the NAS study – Greene & Keller. On average there may be a trade-off, but that trade-off falls off in many specific instances and generally speaking vehicle size is less important to overall safety than individual driving habits.

There are things you can do that simultaneously improve mileage and safety, with the tradeoff being cost and/or action – proper care of tires for one.

spencer September 11, 2007 at 3:55 pm

Why do I get the feeling that the analytical process taught at the George Mason economic department is to reach a conclusion than to go look for anything that will confirm that conclusion?

K. Williams September 11, 2007 at 4:15 pm

Well, the Ross/Wenzel paper linked to above, which we’ve been citing, is based on crash data from the 1995-1999 model years. So it didn’t take Honda twenty years to build a small, safe car. And I suspect that if you compared Honda crash data from the 1980s to bigger vehicles from then, it would still look very good.

That’s the problem with the Chevy Caprice to Chevy Citation comparison. The introduction of CAFE standards didn’t force Detroit to make crappy, unsafe cars. They could have made cars like Honda, Toyota, and Volkswagen — affordable, safe, and fuel-efficient vehicles that people wanted to buy. (After all, one thing that’s gone unmentioned here is that these safe, efficient cars are also the most popular cars in America.) Instead, they chose to make cars like the Neon and the Cavalier.

odograph September 11, 2007 at 4:56 pm

P.S. That graph above is why I actually regard the CAFE requirement as ineffectual. We only pass laws which track what we are already choosing in the free market. I guess that’s smart. Why would we punish ourselves?

I only hope that we will (continue to) move to safer and more efficient cars over time.

Neil September 11, 2007 at 5:56 pm

As a laundromat owner, I fully support the new energy requirements. Hopefully more people will come to our store! This would not only be good for our bottom line, but our store is more efficient than your home washer/dryer setup will ever be…

Mike Huben September 11, 2007 at 6:16 pm

Spencer, you’ve hit the nail on the head: the positions of GMU faculty often reek of ideology and propaganda.

Of the many government and private factors that have resulted in overall lower auto accident rates (such as safety regulations, better roads, engineering changes to cars), lower levels of pollution, lower levels of fuel consumption, etc., Tyler brings up an unintended government tradeoff of lives in exchange for other values.

It’s a theme that I mock in my Libertarianism in One Lesson; The Second Lesson: “A practice common in business is insufferable by government.”

All sorts of similar decisions are made by private businesses. Look at recent research on how many hospital deaths are preventable, for example. And in this case, the CAFE deaths are likely a private business decision: auto makers have chosen to reduce the weight of the vehicles for fuel efficiency rather than to reduce the size of the engines. And they would probably respond the same way even if it hadn’t been a government regulation, but instead had been a huge increase in fuel prices.

But 2000 deaths a year due to regulations is a nit compared to the problems libertarians would rather you didn’t look at. In my Libertarianism in One Lesson, I point out a consequence of one of their nastier opinions: “All food, drugs, and medical treatments should be entirely unregulated: every industry should be able to kill 300,000 per year in the US like the tobacco industry.”

R. Richard Schweitzer September 11, 2007 at 7:20 pm

Does anyone focus on the fact that everything discussed is an extension of what is involved in collectivization?

John Pertz September 11, 2007 at 10:57 pm

AAHHHHHHHHHHHHHHHHHHHH RUN FOR COVER, MIKE HUBEN IS HERE. This topic has officially gone to hell and a hand basket. Nice job Spencer and Mike, you guys sift through a couple of arguments that you dont particularly like and start the mud slinging. Its all just a right wing corporate conspiracy. Mike and Spencer will tell us all about how GMU’s economics department could not survive if it was not for the extreme amount of corporate donations that they receive. After that, Mike and Spencer will be teaching an all day religion class about the virtues of government regulation. Remember kids, CAFE standards and all other types of government regulations are created by prescient, welfare-maximizing politicians whose sole aim in life is to create laws that lead to the most socially optimal ends. Any cynical view of politics is mere right wing-corporate sponsored demagoguery.

Anyways, back to the topic at hand. Does anyone find it hard to believe that politicians(assuming the best of possible intentions) could some how hold enough future information about market evolution so as to be able to implement socially optimal regulation? Do you people really believe that? And if you do then why would these borderline demi-gods be wasting their time in politics and not instead be working for firms, using their prescience to enrich themselves?

Buzzcut September 12, 2007 at 9:12 am

Odo, you don’t know your history very well. Prior to the implementation of CAFE, there was this little thing called the energy crisis.

What you see as mileage increases before CAFE implementation is nothing more than people making rational choices in the face of higher gasoline prices.

So downsizing wasn’t entirely a reaction to CAFE. The problem with CAFE was that it didn’t allow cars to rightsize once gas prices dropped after the Saudis reopened the spigots in 1986. As a result, people switched wholesale from too-small cars to right sized SUVs.

BTW, regarding the cooper vs the f-150, hitting a stationary barrier is equivalent to hitting a vehicle that is exactly the same size as the crashed vehicle. i.e. it’s the same as a Cooper hitting a Cooper, or an F-150 hitting an F-150.

The more interesting test would be a Cooper hitting an F-150.

Ditto for those “5 star” tests. Okay, a Civic does well against itself. How well does it do against an Explorer.

ck September 12, 2007 at 11:42 am

They did the same thing with toilets by mandating they use less water. Now they don’t flush adequately. Gross!

odograph September 12, 2007 at 12:52 pm

Well, since the front-loaders broke through (in the US) as luxury items (as discussed in Trading Up: Why Consumers Want New Luxury Goods… And How Companies Create Them) I’d say the “main benefit” was a status gambit.

Indeed even as Alex deplores mandated front-loaders, the market continues to expand with more and more luxury models. These things have paint jobs to rival luxury cars.

Buzzcut September 13, 2007 at 8:51 am

auto makers have chosen to reduce the weight of the vehicles for fuel efficiency rather than to reduce the size of the engines.

Uh, no, they did that too.

You guys forget just how crappy cars were back in the ’80s. Small, light, underpowered, bad styling, and of poor quality.

We’re really come a long way. Cars are bigger, more powerfull, much safer, and of high quality. They’re stylish too.

And they get EXACTLY the same mileage as those crappy ’80s cars.

Eric H September 14, 2007 at 12:06 pm

Yes, new low-flow toilets are at least as good as the old high-flow toilets. I wonder whether anyone has calculated the water wasted in the transition period. All else being equal, small cars are less safe than large cars for the occupants (the physics of acceleration), but not less safe than large trucks & SUVs (both cited papers including the dissent show this). Something that has been overlooked is the fact that the rolling stock does not consist solely of new vehicles.

This is a debate about the best way to get consumers to value those things which they have been determined to undervalue: prices or regulations? It is also therefore a debate about which things they undervalue, by how much, and whether the chosen correction is effective. It should be a debate about how that information is collected in a dynamic world.

One way to collect it is to test multiple theories against one another and see which works out. When market actors make decisions to produce or buy, others may observe the results. Many such tests may be conducted simultaneously with complex tradeoffs between styling, safety, price, reliability, energy efficiency, and other subjective factors. Pressure-assist low-flow toilets are remarkably effective and dominate industrial and commercial applications, but consumers don’t like the noise and they are correspondingly rare in consumer applications. When regulators make those decisions, no such data collection is permitted: a decision along one axis is passed down, victory over corporate interests or inefficiency is declared, and in other (seemingly unrelated) news there is much hand-wringing about the increasing size of corporations, state and corporate corruption, lower quality jobs, and increasing anomie.

The golden carrot approach to such problems may be a more effective approach than the blunt regulatory policy, but it is underutilized. There are institutions besides the federal government (including state and local governments – California’s ARB is interesting if frequently near-sighted), but those are relatively under-appreciated.

googoo October 23, 2007 at 11:08 pm

It’s not that we lost a decision to use top load or front load, it’s that the congress in it’s infinite wisdom took away our freedom of choice, and we had no say so about it at all. Your congressmen and mine are suppose to represent us, not take our rights away with pen strokes.

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