Economically Counterproductive Policies – Incandescents

In the March 28, 2011 edition of Forbes, Steve Forbes wrote an article titled “Ban Bulb Lunacy.”

An online caption of the article reads “Next year the federal government begins the phaseout of traditional incandescent lightbulbs, giving us yet another enlightening example of politicians short-circuiting free markets.”

In the article, Steve Forbes says “This prohibition of the standard lightbulb is justified on the grounds that it will save energy. Well, if that were true, don’t you think consumers would figure it out for themselves?”

The article goes on to challenge the safety and comparative longevity of the CFLs vs. that of the standard incandescents.

My comments:

In my opinion, it appears, from an “all things considered” basis, that the regulatory “phaseout” of incandescent bulbs is a prime example of not only overregulation, but also (and more importantly) economically counterproductive policy.

The purported economic and environmental benefit of CFLs over incandescents seems at best nebulous, and, at worst, dubious – which some may view as duplicitous.  As Steve Forbes alludes to in the aforementioned quote, it would seem that if CFLs were as beneficial as claimed, consumers would heavily favor CFLs and incandescents would eventually (naturally) disappear from the marketplace.  Instead, we have regulation to force incandescents from the marketplace.

Milton Friedman spoke at length on the issue of harmful regulation in his “Free to Choose” television series, especially in Volume 7, “Who Protects the Consumer.”

I am sure that many people view this incandescent bulb phaseout as inconsequential, as it may seem trivial in the larger “scheme of things.”

If this represented an isolated example of economically counterproductive regulation, it wouldn’t be of great concern.  However, when such regulation proliferates, its existence should become a major issue of concern.  This is so for a number of reasons.

In the article “America’s Economic Future – ‘Greenfield’ or ‘Brownfield’?” I mention the issue of policies that are inherently economically counterproductive.  Of these economically counterproductive policies, I wrote:

“There exist innumerable examples of these types of decisions; and their aggregate negative effect on the nation’s well-being (and strategic position) should not be underestimated.”


The Special Note summarizes my overall thoughts about our economic situation

SPX at 1303.13 as this post is written