Broken Windows, Ozone, and Jobs (Krugman)

[wtmusic]

"I’ve actually been avoiding thinking about the latest Obama cave-in, on ozone regulation; these repeated retreats are getting painful to watch. For what it’s worth, I think it’s bad politics. The Obama political people seem to think that their route to victory is to avoid doing anything that the GOP might attack — but the GOP will call Obama a socialist job-killer no matter what they do. Meanwhile, they just keep reinforcing the perception of mush from the wimp, of a president who doesn’t stand for anything.

Whatever. Let’s talk about the economics. Because the ozone decision is definitely a mistake on that front.

<>

And now you can see why tighter ozone regulation would actually have created jobs: it would have forced firms to spend on upgrading or replacing equipment, helping to boost demand. Yes, it would have cost money — but that’s the point! And with corporations sitting on lots of idle cash, the money spent would not, to any significant extent, come at the expense of other investment."

http://krugman.blogs.nytimes.com/2011/09/03/broken-windows-ozone-and-jobs/

[applegrove]

1. Absolutely. The corporations are just sitting on cash. Forcing them to comply

with regulations would put some of that money to use.