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Regulators vs Business

12/28/2011

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Late last summer industry chalked up one in the 'win' column of the "Economy vs Regulators" standings when President Obama asked the EPA to withdraw an air-quality rule business groups said would cost millions of jobs. The EPA wanted ozone standards tightened to 60-70 parts per billion, down from the 75 ppb proposed by President George W. Bush but never put in place. Most states currently adhere to a level set in 1997 of 84 ppb.

At the time, Jack Gerard, president of the American Petroleum Institute, was hopeful the White House was "becoming more sensitive to the uncertainty created by its heavy regulatory hand." As would be expected, environmentalists had another take. "The White House is siding with corporate polluters over the American people," said Frances Beinecke, president of the Natural Resources Defense Council. "The White House now has polluted that process with politics." 

The environmentalist's view is overstated. Congress is facing 219 major regulation proposals, each with an estimated cost to the economy of $100 million or more. And the White House concedes seven of those will each have a price tag of at least $100 billion. The Administration has also increased the number of regulation proposals (environmental, financial and so on) it is drafting by 15 percent, and bumped up the budget for regulatory agencies 16 percent.

As it stands now, the score at the end of 2011 is actually one victory for business and the economy and 4,200 for the regulators. That's right. Along with the 219 big ticket regulations, the Administration admits another 4,000 new or revised regulations are in the pipeline. 
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Fish Flushed Down The Missouri

12/22/2011

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No one is really against prosperous habitats for both wildlife and humans. But at some point there has to be a balance between what humans can expect from Mother Nature and what laws of eminent domain can be invoked to benefit a dominant species. In other words, how much should humans concede or forfeit to a lower species whose contribution to the continued development of the planet might have outlived its original purposes, or maybe isn't that important anymore.

At the risk of sounding insensitive to the pallid sturgeon in the Missouri River....oh, the hell with it. The spring floods in 2011 illustrate the dilemma. The human habitat of the Missouri River Basin (crops, property, businesses, infrastructure and homes) was devastated when the reservoir and flood control systems couldn't contain the enormous buildup of water from the unusually large snow pack melt and continuous spring rains. In Missouri, water inundated 450 square miles, destroying 284,000 acres of cropland and causing $1.3 billion worth of damages to the flood control infrastructure alone. All told, the flood racked up a total of $5 billion in losses.

While the Army Corps of Engineers bore the brunt of the criticism, even being accused of incorrectly forecasting the weather, blame more aptly should be placed on other federal agencies that actually control more of the Basin's operation budget. Their priorities seem to favor the preservation of the pallid sturgeon over the economy of the region and the livelihoods of the farmers. One board member of the Missouri Levee and Drainage District (MLDD) said the flooding occurred because the Army Corps of Engineers was not encouraged to release the rising waters from the reservoirs earlier.

In the Kansas City flood plain area, flood control systems (dams, reservoirs and levees) protect 2,900 businesses that employ 60,000 people and generate $12.5 billion in sales. The commercial and residential structures are valued at $15 billion and contribute $26 million in local real estate taxes.

But it appears the Fish and Wildlife Service was more concerned about protecting species-habitat and recreational areas than preventing catastrophic flooding of the entire region. The  Fish and Wildlife  Service is the dominant agency  involved in Missouri River Basin operations and claims the lion's share of the federal budget allocated to those activities. Of the $80 million federal outlay to the Missouri Rive Basin,
only $7 million is earmarked for dam, reservois and flood control construction and repair. The rest is reserved for the pet (so to speak) projects of the Fish and Wildlife Service.

Ironically, because the feds kept the spigots closed to preserve the pallid sturgeons' habitat during the early spring floodwater buildup, they could only watch helplessly as sturgeon breeding pools were violently washed away when the floodgates could no longer restrain the pressure .
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Diminishing Returns of Over-Regulation

12/14/2011

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It's bad enough that the expanding array of government regulations costs the American economy $1.75 trillion annually, which the Small Business Administration also calculates as more than twice the amount of revenue collected each year from individual income taxes. While large and small U.S. businesses grumble about the expense, tediousness and inconvenience of compliance, it seems some of the beneficiaries of the regulations, especially those in the wild, are, well, ungrateful.

Two decades after six million acres of federal forests in the Northwest were closed to logging by the Endangered Species Act in an effort to restore the spotted owl population, these nocturnal birds of prey don't seem to have got with the program. They are vanishing at an average rate of 3 percent a year and 9 percent in some parts of the preserve. In the meantime, 200 sawmills in Oregon alone are out of business. Unemployment there is 20 percent, and the unmanaged forests have become firetraps. The 2002 Biscuit Fire in southern Oregon and northern California burned 500,000 acres, cost $150 million to fight and destroyed $5 billion worth of timber. It also resulted in the deaths of an estimated 75 pairs of spotted owls.

Biologists admit they don't really know what is behind the spotted owls' demise. But some suspect the hoot owl, a fierce rival, is preying on its cousin. So, despite Mother Nature's settled law, i.e., natural selection, survival of the fittest, the U.S. Fish and Wildlife Service is pressing on with a final Revised Recovery Plan issued this past summer. The Plan sets aside additional acreage for the spotted owls and calls for shooting the hoot owl.

As the U.S. prepares to withdraw most of its troops from Iraq by the end of the month, is the nation really prepared for an incursion of armed federal agents into the Northwest forests on a search and destroy mission against hoot owls? By the way, the price tag for this Revised Recovery Plan is $127 million, and the Fish and Wildlife Service only ventures to say it might restore the spotted owl population in 30 years.
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