Death by a Thousand Cuts

By Keith D. Rodebush, Contributor to US Daily Review.

Researching an article about government regulations is akin to complying by them I suppose as it is eternally frustrating and mind boggling. Aside from the general notions that there are too many regulations, is the even more nuanced problem of determining the cost/benefit ratio of said regulations. When you start by simply asking questions such as:

  • Why is the government regulating this business
  • What are the dangers to Americans if these regulations are not enforced
  • What is the impact on business and jobs of these regulations
  • In the case of the EPA, what is the overall effect of business in this context as opposed to natural environmental causation

…you find yourself in a maze of information put out by alternative sources, some with an agenda; and yes, the government has an agenda as well. What you also find is that sometimes those who appear to be helping us citizens turn out to be the very ones hurting us citizens. Case in point: a letter sent to President Obama bemoaning the economic impact of regulations on businesses, signed by Lamar Smith and Fred Upton. That would be 26 year career politician Lamar Smith (my former Rep.) who has voted for a plethora of EPA business stifling regulations when ‘Green’ was in vogue; and Congressman Fred Upton of ‘you can’t buy an incandescent light bulb, you have to use the twirly bulb’ fame. Our politicians are masters of disguise and are constantly on guard to see which way the political wind blows so they can climb on board and squawk like a Minor bird in their next campaign their fealty to the cause du jour. Oh to just have a legislator with a spine and a set of convictions.

Let us start with the basics: How many regulations do companies have to conform to in modern America? Well it turns out that it is almost impossible to find out. What you get are estimates with caveats about how the little government munchkins are busy writing away as we speak to keep up with the 2,000 page bills recently passed by our glorious leaders. For the purpose of this article we will settle only on those that carry serious criminal penalties for non-compliance. A recent study by The Heritage Foundation finds approx. 4,500 such rules as of 2007 with a historical growth of 500 per year. That would put the current load at around 6,500 if we assumed that the “Affordable Health Care” act and the “Dodd-Frank” banking act don’t over regulate; which of course is akin to saying that Obama doesn’t over speechify. That would indeed be assuming too much as in fact, the administrations own Unified Agenda of Regulatory and Deregulatory Activities (2010) lists 4,255 new actions under development by federal agencies. In other words, regulation is set to almost double under one administration. And they can’t figure out where all of the jobs went. This type of lunacy is reserved only for government wonks of the greatest order.

So imagine that you are a small business person out there hitting the pavement and trying to grow a business and your lawyer and accountant warn you to be sure to comply with government regulations that number in the thousands and carry stiff penalties and even jail time if you fail. And by the way, there are thousands more just around the corner. We’ll get back to you. What is the cost of complying with all of these regulations? The Small Business Administration’s Office of Advocacy recently released a report that shows the cost of regulations to the American economy is an astounding $1.75 Trillion dollars a year. That is approximately 14% of our nations income. How many jobs is that? And keep in mind that these studies are always a few years old. The cost of Obama voters is entirely unknown at this point.

What do we get for all of this government intervention into business? The primary result is lobbyist flooding Washington D.C. throwing dollars at politicians in hopes of having some of these regulations re-written, many times in an attempt to hurt their competitors. The unholy alliance between business and government is the anchor on our economy that is never truly comprehended. But I digress… Let us give them the benefit of the doubt shall we? After all, they only want to help you. Let’s take the case of mercury deposits released into the air by cement plants. Let’s first acknowledge that cement is a fundamental material for building the world over. As a strong building industry goes, so goes the overall economy. The benefit of concrete is indescribable. But we all want clean air and we wouldn’t want to hurt our fellow citizens unnecessarily. Let not your heart be troubled, the government is here to save you. Recent regulations have stiffened the EPA’s resolve to diminish the mercury levels released by cement plants by 90% by 2013. First of all, that is a huge leap. 90% in just a few years. Wow, this must be a horrible problem requiring quick and decisive governmental response. It is estimated by Portland Cement that these new guidelines will result in the closing of 18 of 97 cement plants nationwide at a cost of 4,000 jobs. What is the impact of those lost jobs? Are there families that will now do without health insurance? Perhaps put off going to the doctor at all? What is the health impact of that one symptom of these regulations?

Good grief, this is horrible! Just how much mercury do American cement plants put out a year? Well, depending on who you ask it is between 12,000 pounds (EPA) and 23,000 pounds (various environmental groups). So between 6 and 12 tons per year. Well, that does sound bad. How does that compare to say, Mother Nature? As it turns out a recent scientific study found that just one vent on one volcanoe puts out about 7 tons of mercury into the air in a year. Just one vent on one volcanoe. So how many active volcanoes are there in the world? Approx. 1,500 worldwide. In 1 to 2 years one vent on one volcanoe puts out more mercury into the air than all of America’s cement plants do. I ask you, is this worth 100’s of regulations, closing 18 cement plants, losing 4,000 jobs and risking corruption of government officials at a cost of 100’s of millions of dollars a year? There are stacks of other examples in every industry in every city in every state of the union.

The British Petroleum oil spill in the Gulf of Mexico recently was curtailed in months (many claim the gov’t impeded the process and prolonged the spill), but the governmental intervention has just put it’s boots on. The moratorium on drilling coupled with new regulatory boards and rules have been dripping out slowly as the oil industry bleeds jobs and rigs are taken down and sent to foreign countries from whom we will buy the oil at a higher price. In the meantime the Gulf shrimp industry is rolling along quite well, I know I purchase Gulf shrimp often. Never tasted a bit of petroleum on mine. They were fat and delicious! But never fear, the federal government is busy in the back rooms of Washington writing new rules to shackle the oil industry for your protection.

Whether it’s Sarbanes-Oaxley, or Dodd-Frank (they love putting their names on things) or just the Durbin amendment that caused the recent $5 surcharge on ATM cards, the government is busy ‘helping’ us at every turn. The truth is that none of these regulatory actions ever stop the intended problem, and in fact cause more problems such as financial meltdown (Fannie Mae & Freddie Mac) and financial paralysis (Dodd-Frank: Yes, the two legislators most responsible for the financial meltdown). But fear not, for they have another piece of legislation or regulation in mind to fix that too. The entire system grows and grows until it has become a cruel if not humorous joke. The American people aren’t laughing; they’re struggling and losing ground. Alas they are only the grist for the big wheels of big government which grinds along crushing the entrepreneurs and inventive people of our nation. We all pay dearly for it. Remember when you could sell lemonade without a license?

References:

http://judiciary.house.gov/news/pdfs/03102011RegulatoryReform.pdf

http://archive.sba.gov/advo/research/rs264tot.pdf

http://www.heritage.org/research/reports/2008/06/revisiting-the-explosive-growth-of-federal-crimes

http://www.sciencedaily.com/releases/2008/06/080629081932.htm

Keith D. Rodebush is a Christian businessman, a writer and an armchair scholar. He has a Bachelor of Science in Architecture from the University of Arkansas. Keith is currently working on a novel and periodically writes at his blog, “Ignarus Semino Dominatus”

All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.

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