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Re: The Limits To Growth
John Flanery wrote:
> There is no conflict between employment and the environment. Oh, certain
> jobs should be eliminated, but the overall employment level is controlled
> by the Federal Reserve, not by the amount of economic regulation.
>
Thomas Hopkins recently studied regulatory compliance costs in
"Regulatory Costs in Profile" done for the Center for the Study of
American Business. In 1995 regulatory compliance costs were $668
billion. Of that $218 billion was just paperwork, $223 billion was due
to environmental regulations and $227 billion was for price and entry
controls. Even if you assume that environmental regulations create no
paperwork (which would be like assuming that the world is flat)
environmental regulations still cost on average $1905 per employee in a
business with less than 20 persons. $1824 per employee in a business
with 20-499 employees and $1025 per employee in large businesses with
over 500 workers. So imagine if you ran a business with 10 employees.
By these figures, you would be paying $18240 just to comply with
regulations. That is enough money to hire another person. So, its hard
for me to believe you when you tell me regulation doesnt effect the
general employement level.
Now for your second assertion. The federal reserve does not control the
general employment level in this country, the market does. Your
assertion is a good example of machine age thinking, something we at the
Bionomics Institute are trying to overcome. The economy is not some
sort of automobile, with the fed having its foot on the gas pedal. The
economy is a complex ecosystem. Sure if the fed raised the federal
funds rate tremendously there would be, some increase in the
unemployment level. But that is only because wall street trusts Alan
Greenspan to make the right decision. The fed only controls the federal
funds rate, which is the interest it charges to make loans to other
banks. This does effect the interest rates that we deal with everyday,
but it is the market that actually changes them. A couple of months
ago, there were some rumors going around that the fed was going to raise
the federal funds rate and that very day, interest rates rose by
themselves.
If this hasnt convinced you, how about this. Imagine if the federal
government cut defense spending by 25%, wouldnt that effect the
employment level? (it did in california). Imagine if IBM went bankrupt,
wouldnt that effect the employment level? Imagine if regulatory
compliance costs went down to zero and $668 billion were availible this
year for investment. Wouldnt that raise employment? The economy is vast
and complex and many different things create the current level of
unemployment.
Max Jacobs
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The Bionomics Institute
http://www.bionomics.org
Viewing the economy as an ecosystem
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