Saturday, September 3, 2011

Cost Benefit Analysis

President Obama caved this week and announced that he would tell the EPA (Environmental Protection Agency) to withdraw its proposed regulatory rules to tighten smog standards.  The rules have been reported to have carried a potential cost to businesses and state/city governments of anywhere from $19 billion to $90 billion (depending on the strictness of subsequent enforcement).  In such a challenging economic environment, Obama explained, these rules would place an undue burden on job creation, a critical imperative during an election cycle.  As consumers become sicker from lung-related illnesses and die, however, this has the potential to impact demand for goods and services in the future, another drag on growth.  We know that “Dead men tell no tales”, but it is also true that “Dead men don’t consume goods and services”, either.  May I suggest that loss of life has a cost to business, too?

This most recent executive branch spelunking represents a clear example of shortsightedness on the part of the President and the GOP minority that acts as his puppet master.  The proposed regulatory rules could save the equivalent money or more in reduced health care expenses nationally, but that is not part of the public debate.  Saddling future generations with debt is immoral.  Saddling them with chronic lung disease however, well that’s a cost of doing business.  That choking feeling around your throat is just the invisible hand of capitalism.  Pay no attention.  When the demand for breathable air reaches critical mass, someone will sell it to us at an affordable, market-driven rate, and the stockholders will be the winners.      

The Republicans (surprisingly) agreed that Obama did the right thing by postponing the rules, while adding that his decision was made too late and he hasn’t gone far enough in rescinding regulations (not surprisingly).  According to the conservative philosophy, it would seem that regulations of any kind are a burden on business, a tax on consumers, and a drag on innovation.  This isn’t a new claim, and the history books (especially those in Texas) are filled with examples of conservatives railing against any and all restrictions on free and unfettered capitalism.  A quick review of the MSRP email archives from the past century bears this out:

February 2, 1906

Dear MSRP,

I write today to oppose the so-called “Meat Protection Act of 1906”.  Liberal author Upton Sinclair writes a poorly footnoted novel about alleged unsanitary practices in a few meat packing plants, and suddenly we need another regulatory agency!  Implementation of the new meat inspection rules will lead to another bloated bureaucracy and serve as a hidden tax on consumers.  Who will pay the cost of this new law?  The poor, working class carnivores like you and me, that’s who.  Liberal compassion about “safety” is phony.  They don’t care about sanitary food.  They care about creating lifelong government jobs in the newly created Agency of Meat.

Meat is dying in this country, and only you can save it from the digestive tract of history.  If this law passes, by 1956, we will be a nation of vegetarians.  I guarantee it.  Please stop the madness.

Marvin Disgruntled
President, Al’s Poultry and Plumbing
Try our sausages!

May 15, 1938

Dear MSRP,

The federal government has once again wrongly asserted itself with its proposed child labor law, hidden inside the massive Fair Labor Standards Act.  This legislative behemoth takes federal overreach to new levels.  The business community built this great nation on the backs of affordable child labor, and American business cannot withstand another assault on its Constitutional right to negotiate for the best prices in goods or the best conditions for human services.  Child labor regulations will harm job creation at a time when our depressed economy needs all the help it can get.

Not only are the proposed rules setting the minimum age for hazardous work and work during “school days” a tax on business owners, they would unduly limit the rights of children to earn a living.  The Constitution starts with “We the People”, not “We the Adults”.

We owe the next generation of Americans the opportunity to learn how to work.  It is good for their self-esteem.  Please do not give in to attempts to smear the good name of indentured servitude in the name of misguided liberal compassion.

Marvin Disgruntled
CEO, Gepetto’s Pleasure Island Playland
Now open weekends!    

September 14, 1967

Dear MSRP,

If Congress passes the proposed law to require seat belts in all newly manufactured automobiles, you can start etching the gravestone of the auto industry.  “Here lies American Progress.  Born 1776.  Died by seat belt strangulation 1968.  RIP.”  Detroit will never survive such an unconstitutional intrusion on its right to built and sell any car that Americans will buy.

The installation of mandatory seat belts will serve as a tax on consumers, and soon price American cars out of the global marketplace.  Who will pay the increased cost?  You guessed it.  Mr. and Mrs. American Consumer, that’s who.  The legislation pretends to protect drivers.  Instead, it will limit driving and car ownership to the uber-rich.  This is the real liberal agenda, comrades.  First, they’ll want your guns.  Then they’ll take your cars. 

More jobs will be lost than lives will be saved, regardless of the fancy “statistics” about the success of the seat belt in protecting the innocent in crashes.  All the talk about a future savings from reduced national health care expenses is just a diversion from the real issue: cars will cost more now.  That fact is undeniable, unacceptable, and un-American.

No one is truly free when belted into a seat.


Marvin Disgruntled
Chairman, Automakers Alliance for Affordable Autos (AAAA)
Exceptional Cars for Exceptional Americans

If my cynicism could create jobs, we’d be at full employment.

Maybe someone will write a full-throated editorial arguing for the repeal of all immigration enforcement as a burden on business, a hidden tax on consumers, and an affront to the philosophy of paying the least for the most.  After all, aren’t immigration restrictions an undue burden on businesses in this country by restricting the labor pool?  Don’t all these immigration restrictions represent a hidden tax on consumers by forcing businesses to pay higher wages to legal residents?  Wake up, America!  Immigration enforcement is anti-business! 

Knee jerk opposition to any and all business regulations by state or federal government entities as a drag on our economy is shortsighted at best, ignorant at worst.  If a new regulation costs businesses $100 million over 10 years to implement yet generates $200 million in savings (for the country or the industry), that math should be part of the debate.  I am certain that the financial services industry would have fought new regulations in 2007 tooth and nail, quoting the exorbitant costs that would be passed on to consumers.  Show of hands - who would trade $100 million in new regulatory burdens for the trillions in lost wealth after the 2008 collapse?  That shold be easy math.

Until we can weigh the costs and benefits of a proposed rule rationally, none of us will breathe easy.  We’ve seen to that. 

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