Independent Businessmen, an Endangered Species?
By Gary Benoit
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Source: The New American, November 19, 1990
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Many
Americans still believe that the free enterprise system and private
property rights are sacred in America. The truth of the matter is, they
used to be sacred. With each passing decade, the federal government
gains greater control over private enterprise and private property
through its tax and regulatory policies.
The federal government has not formally declared ownership over all
property and land, as so many communist and socialistic governments
have done. It simply extends a bureaucratic tyranny over business and
property. Ever so gradually, businessmen and property owners are
becoming employees of Uncle Sam, even though they are still allowed to
hold nominal title.
In 1887, the first federal regulatory agency -- the Interstate Commerce
Commission- came into existence. In recent decades the regulatory
agencies have metastasized like a cancer on the American landscape.
They include the Occupational Safety and Health Administration, the
Food and Drug Administration, and the Environmental Protection Agency.
By combining the three branches of government -- the legislative, the
executive, and the judicial -- into a single body, these agencies
weaken the system of checks and balances that the Founding Fathers so
carefully crafted into the Constitution.
Regulations issued by these agencies can take on the force of law
unless vetoed by an act of Congress. Victims of these regulations can
be forced to argue their cases before the agency that issued the
regulations, and are obliged to exhaust all administrative remedies
before the case can go before a regular court.
Free Enterprise Works
The Environmental Protection Agency, since its inception in 1970, has
become one of the most powerful agencies of the federal government.
Major environmental laws such as the Clean Air Act, the Wilderness Act,
the Endangered Species Act, and the Clean Water Act, to name but a few,
have greatly expanded the powers of the federal government. In spite of
recent studies showing that the environment is actually cleaner than in
the past, environmental concerns have been used as a pretext to extend
government control over everybody and everything. Should this trend
continue unabated, the most seriously endangered species could become
the independent American businessman and property owner.
Ironically, the destruction of the American free enterprise system
would probably have a negative impact not only on freedom but also on
the environment. Anyone who doubts this need look no further than the
environmental damage! in Eastern Europe and the Soviet Union. The free
enterprise system has been good for the environment not only because it
results in new technologies -- enabling more production with less
pollution -- but because free men and women tend to be more responsible
than government bureaucrats and slaves.
Cost of Regulation
The impact of these regulations on the economy is awesome to
contemplate. According to a 1989 study prepared by economists Dale
Jorgenson and Peter Wilcoxen for the Kennedy School of Government at
Harvard University, "The cost of environmental regulation is a long-run
reduction of 2.59 percent in the level of the U.S. gross national
product." The Detroit News commented
in 1990, "This means that the gross national product this year will be
about $180 billion lower, with four million fewer jobs, than it would
have been otherwise."
Even President Bush admits that in 1987 alone we spent $81 billion on
pollution control, over $62 billion of it in the private sector. When
non-environmental regulations are factored into the equation, the costs
are even higher. According to Mr. Bush, "Federal regulations impose
estimated direct costs on the economy as high as $175 billion annually
-- more than $1700 for every taxpayer in the United States." Should the
Clean Air Act now before Congress be enacted, the annual cost to the
economy would increase as much as $22 billion to $25 billion.
The EPA is the federal government's main environmental agency, entrusted (in the words of the U.S. Government Manual)
to "control and abate pollution in the areas of air, water, solid
waste, pesticides, radiation, and toxic substances." In fiscal 1990
this one agency consumed an estimated $5.5 billion in order to carry
out this mission.
Satisfying environmental regulations can be very costly and time
consuming. Sometimes it's even difficult to determine what
environmental agencies such as the EPA require. Rick Brueggemann, the
environmental supervisor for the Bavarian Truck Co., a mid-sized
waste-disposal business based in Kentucky, told THE NEW AMERICAN: "The
regulations are a moving target. Every time you try to do something,
the rules change." Brueggemann does not know how much money
environmental regulations are costing his company, but does know that
"it's a full-time job" to satisfy them. In addition, his company, which
employs 90 people, has piled up plenty of attorney hours. Environmental
regulations impact businesses of all sizes and types, but they fall
most heavily on small businesses that cannot afford to employ batteries
of lawyers or full-time environmental supervisors.
The EPA enforces compliance with its regulations by imposing heavy
fines and by filing lawsuits. On June 26, 1989, for instance, the
agency publicly announced fines totaling $1.65 million against 42
companies for failing to report toxic releases. The largest fine
($262,000) was levied against Diceon Electronics Inc., a
California-based electronics company. On July 27, 1990, the USX Corp.
resolved an EPA-filed lawsuit by agreeing to pay $34 million in costs
and penalties for discharging untreated waste water from its plant in
Gary, Indiana.
Sometimes the fines border on the bizarre. Joseph Jones, the owner of a
small West Virginia industrial supply business started by his father,
was fined $20,000 because a transformer leaked a small amount of oil
containing more than the government-mandated level of PCBs onto a
concrete slab. Now Jones must test the transformers and, at his own
expense, transport those deemed hazardous to a special
environmentally-secure dump site in Arkansas.
These instances of EPA regulations are not isolated examples. Whole
sectors of the economy have been affected. For instance, in 1988 the
EPA began phasing in rules requiring firms to upgrade or replace aging
gasoline tanks. These rules could cause many of the nation's service
stations to fold. According to the Petroleum Marketers Association of
America, 17 percent of the gas-tank operators it surveyed will close
over a four-year period as a direct consequence of the EPA's
regulations. The EPA concedes that its regulations will increase the
failure rate for small businesses by 40 percent.
According to EPA figures, tank replacement for an average size station
will cost $80,000, and tank upgrades will cost as much as $40,000. The
EPA estimates that there are as many as 2 million underground tanks in
this country covered by their regulations, and that ten to thirty
percent of these tanks are probably leaking.
EPA regulations also require owners to purchase expensive leak
detection devices for all but the smallest tanks, and to purchase
insurance covering claims against leak damage. Even small businessmen
with fewer than 13 tanks must purchase $1 million in insurance coverage
by October 1991. EPA enforces compliance with fines of up to $10,000
per day for each tank in violation.
De-Energizing America
EPA regulations affecting service stations are just one example of how
government-enforced environmentalism has been used as a weapon to drive
up the cost of energy and to restrict energy development:
• In June 1990, Mr. Bush delayed oil and gas development in vast
off-shore areas, including 99 percent of the waters off the California
coastline, for ten years. Development "should occur in an
environmentally sound manner," the President declared in his
announcement.
• The huge Point Arguello field off the California coast can produce
100,000 barrels of oil per day just as soon as a go-ahead is given. The
wells have been drilled and the platforms have been put in place. But
state and local environmental officials have refused to issue the
necessary permits because of their unyielding opposition to
transportation of the oil by tanker.
• The Arctic National Wildlife Refuge is still closed to development,
even though this area is estimated to contain as much oil as Alaska's
Prudhoe Bay. Those who claim that development would be an environmental
catastrophe neglect to mention that the caribou herd -- which was
supposed to have been threatened by the pipeline and Prudhoe Bay
development -- has grown substantially in recent years.
• Exaggerated environmental and health concerns have also been used to
virtually halt construction of any new nuclear power plants in this
country. Since 1974, every order placed for a new nuclear generating
unit has been either canceled or rejected. No new orders have been
placed since 1978. Orders for more than 100 nuclear generating units
have been canceled or rejected.
Wetlands Policies
Running for President in 1988, George Bush promised that our national
goal would be no net loss of wetlands. David Senter, national director
of the American Agriculture Movement, claimed in a letter to U.S.
senators that federal agencies "are using wetlands delineation, clean
water, and other laws as a way to take control of vast areas of
farmland, much of which has been farmed for decades and has nothing to
do with permanent wetlands." Senter warned that U.S. farmers could lose
"25 percent to 50 percent of their net equity due to the outright
taking of their land by the federal government."
"Some environmentalists are running headlong at the property rights embedded in the U.S. Constitution," the Wall Street Journal editorialized
on August 27, 1990. "The question is why the Bush Administration has
been helping the greens succeed." Anyone who doubts that property
rights have been violated need only consult the record:
• John Pozsgai, a refugee from the 1956 Hungarian uprising, found out
just how little regard the EPA has for property rights when he placed
top soil and clean fill on his own property without a permit. A
self-employed truck mechanic, Pozsgai operates a small repair shop in
Morrisville, Pennsylvania. In June 1987, he purchased a lot near his
home with the intent of building a new garage.
The lot, used for the last 20 years as an illegal dump site, was
littered with old tires, rusting cars, and other trash. Pozsgai removed
the junk and then had top soil and clean fill placed over part of his
property. Then, in September 1988, the EPA had Pozsgai arrested for
"discharging pollutants into waters of the United States" -- pollutants
consisting of top soil and clean fill.
It seems that a stream running along the eastern border of the
property, which was dry most of the year, would sometimes flood part of
the property because of the damming effect of the old tires, thereby
creating "wetland" conditions. When the tires were removed, the
flooding ceased. But this did not prevent the EPA from charging that
the placing of fill on the property resulted in the destruction of
"wetlands." This was deemed to be a violation of the Clean Water Act,
even though the Act itself merely bans the polluting of "navigable
waters," not of wetlands.
For his "crime," John Pozsgai was fined $202,000 and sentenced to three
years in prison and five years probation. Recalling Mr. Bush's campaign
pledge, U.S. Attorney Seth Weber claimed at the sentencing, "A message
must be sent to the private landowners, the corporations and developers
of this country."
• In 1989, Ocie Mills and his son Carey went to prison for placing 19
loads of sand and cleaning out a 300-foot drainage ditch on their own
Florida property. Ocie Mills had wanted to build a house for his son
near the ditch and needed the fill to solve already-existing drainage
problems. He was told by Florida environmental officials that he did
not need a permit. Indeed, he received a letter from Florida Department
of Environmental Regulation Assistant General Counsel E. Gary Early,
stating that investigation had "determined that you were maintaining
your existing canal rather than engaging in new dredging activities.
Maintaining existing structures is specifically exempted from further
permit requirements."
This pronouncement notwithstanding, Ocie Mills and his son were later
convicted of "knowingly discharging fill material in wetlands," and of
"dredging a canal in navigable waters." For these crimes, the two were
each sentenced to 21 months in prison, freed $5000, and ordered to
restore the property. Keith Onsdorff, an EPA associate enforcement
counsel, argued that this penalty would "send a strong message across
the country that those who knowingly violate environmental laws are
going to jail."
• John and Gene Biggi own a piece of land bordering a drainage ditch in
downtown Beaverton, Oregon. The property has not been a wetland since
1908, the year the drainage ditch was completed. In 1976, as part of
the city's plan to improve its downtown area, the Biggis, along with
other property owners along the ditch, began filling in their property.
The Biggis completed their fill in 1983, but in 1986 the EPA cited them
for filling without a permit. Then in 1990 the EPA sought to have the
Biggis pay a free of $10,000 a day from May 9, 1977 through February 5,
1987, and then $25,000 a day from that point on. By September 30, 1990,
these fines amounted to more than $73 million.
Endangered Species Act
The Endangered Species Act is another weapon used by environmentalists
to impose their will. By getting the Fish and Wildlife Service to
declare a species "endangered" or "threatened," environmentalists have
been able to block development and, in the process, destroy jobs. For
example, environmentalists oppose the harvesting of trees in the
"old-growth" evergreen national forests that stretch from northern
California to British Columbia. By getting northern spotted owls
declared a "threatened" species, they have been able to "protect" the
forests as well as the owls, while adversely impacting the livelihoods
of thousands.
Environmentalists who oppose logging ignore the fact that loggers must
take great care not to cut down all of their trees. A Pacific Lumber
Co. brochure explains:
Because a continuous supply of trees is vital to The
Pacific Lumber Company, we manage and cultivate our 194,000 acres of
forestland carefully. We maintain access roads so we can protect our
trees against forest fires, erosion, insects, or damage from human
activity. We plant and nurture new seedlings to replace the trees we
cut. We watch our lands as carefully as any good farmer would, because
our lands represent our livelihood.
Because of its concern for the environment, Pacific Lumber even donated
20,000 of the 76,000 acres of old-growth redwoods that are in public
preserves in California. Yet, the President of Pacific Lumber, Charles
Hurwitz, has become (in the words of the Los Angeles Times) western environmentalists' "Enemy #1."
Earth First! radicals were unable to halt logging in the Pacific
Northwest, so forest "defenders" seized upon the spotted owl in order
to use the power of government to accomplish basically the same thing.
In April 1990, a team of government wildlife biologists recommended a
logging ban in vast areas of the Pacific Northwest in order to save the
northern spotted owl. One lumber company executive calculated that this
recommendation would set aside about $95 million in timber for each
pair of spotted owls. Two months later, the northern spotted owl was
declared a threatened species, even though the only difference between
it and a California cousin may be habitat.
The economic consequences of this decision will be severe. In May 1990,
the U.S. Forest Service and the Bureau of Land Management released a
study estimating that efforts to protect the owl would cut timber
harvests nearly in half by 1995 and eliminate at least 13,000 jobs.
Other estimates are even higher. The Northwest Forest Resource Council
contends that treating the owl as a threatened species would eliminate
130,000 jobs and deprive the federal government of $1 billion in timber
revenue.
Speaking in Portland, Oregon in May 1990, Mr. Bush stated: "I reject
those who would ignore, totally ignore, the economic consequences of
the spotted owl decision." Then he added, "But I also reject those who
do not recognize their obligation to protect our delicate ecosystem."
The northern spotted owl is not the only species that has been used to
impede development and lock up the land. All across the country,
environmentalists are identifying species that can be used to
accomplish their political purposes. Stephens' kangaroo rat, a
three-inch-long rodent, has delayed the construction of new housing in
Riverside County, California. The Colorado squawfish has blocked a $590
million water project intended to benefit the Ute Indians. The Mount
Graham red squirrel has held up a planned $300 million observatory atop
Mount Graham in Arizona.
These cases are not isolated examples. Step by step, environmentalists
backed by the power of government are using environmental concerns as a
pretext for locking up the land. If it is not the Endangered Species
Act, it is unreasonable wetlands policies or some other environmental
bugaboo. Regulations that already impact many businessmen and property
owners may soon be extended to others. The American Forest Resource
Alliance reported in June 1990:
Grazing, mining, timber, recreation, hunting, fishing, and
many other uses are under attack. It is becoming increasingly clear
that for any of us to survive, we must all work together when one group
is attacked.
The timber industry faces issues such as regulation of
forested wetlands, preservation of the Red-cockaded Woodpecker,
biodiversity, and the Spotted Owl. These issues are actually tools used
by the preservationists to remove multiple users from federal land. The
Desert Tortoise is being used now to remove ranchers.
Environmental Scare Tactics
Environmentalists are not above employing scare tactics and bad science
in order to condition people to accept government intervention.
Examples include the asbestos scare, the Alar scare, and the radon
scare.
Asbestos Scare:In 1982, the nation's schools were required to
inspect for asbestos. In 1986, the Congress passed and President Ronald
Reagan signed into law the Asbestos Hazard Emergency Response Act,
which ordered "abatement" in every school building judged to contain
damaged asbestos. Abatement involves the sealing off or removal of
asbestos. The following year, the EPA issued regulations for inspecting
asbestos building materials in schools and for asbestos abatement.
The cost of this clean-up is horrendous. The EPA estimates that 45,000
of the nation's 100,000 school buildings contain asbestos in a
potentially dangerous state. Removing asbestos costs $20 or more per
square foot, or approximately 100 times the cost of installing it. The
National School Boards Association estimates that abatement will cost
more than $6 billion just for the public schools. The public school
costs will be borne by the taxpayers, while many private schools unable
to shoulder this extra burden may be forced to shut down.
Should these regulations be extended to all public and commercial
buildings, the cost would skyrocket. The EPA estimates that at least
733,000 public and commercial buildings contain asbestos in a
potentially dangerous condition, and that the cost of abating this
asbestos would run about $51 billion. Other estimates range as high as
$100 billion to $150 billion.
Yet, asbestos does not pose a serious health risk. The January 19, 1990 issue of Science published
an asbestos study that concluded: "Available data do not support the
concept that low-level exposure to asbestos is a health hazard in
buildings and schools." The study found that fiber concentrations in
buildings were "comparable to levels in outdoor air, a point surely
relevant to assessing the health risks of asbestos in buildings." The
paper argued that removing the asbestos is far more risky than any
health benefits derived from removing it. "Clearly, the asbestos panic
in the U.S. must be curtailed, especially because unwarranted and
poorly controlled asbestos abatement results in unnecessary risks to
young removal workers who may develop asbestos related cancers in later
decades," the authors of the paper maintained.
In July 1989, the EPA issued new rules banning almost all uses of
asbestos by 1997. According to agency estimates, all but six percent of
the asbestos currently in use would be banned.
Alar Scare:In February 1989, the EPA announced that it planned
to ban Alar, but would allow its use for at least another 18 months.
Alar was used by apple growers as a ripener and to preserve crispness.
Later that month, the CBS news program 60 Minutes aired
a sensational story claiming that Alar was causing cancer in children.
In the wake of the ensuing public panic, consumers stopped buying apple
products, causing the price of apples to plummet.
In May 1989, apple industry spokesmen held a news conference in
Washington DC to announce that they were asking growers to end the use
of Alar. The spokesmen said that the year's apple crop had dropped by
20 percent compared to the previous year, largely because of the Alar
scare. They estimated that the downturn had already cost the industry
$50 million. Interestingly, the International Apple Institute, a trade
association represented at the news conference, estimated that only
about 5 percent of the U.S. apple crop was treated with alar in 1989.
Yet, like asbestos, Alar did not present an undue health hazard. The 60 Minutes story
cited an unpublished report by the Natural Resources Defense Council
(NRDC), an environmental group. The NRDC report was based on a
discredited 1977 test in which the amount of Alar fed to rats was
266,000 times that of normal human ingestion. Even the EPA admitted
that "there are no hard facts on hand that directly link Alar with
human cancer cases." Moreover, "the Natural Resources Defense Council
report used data rejected in scientific peer review." These
pronouncements notwithstanding, the EPA in September 1989 called for an
end to Alar use after May 31, 1991.
Radon Scare:In September 1988, the EPA issued a national health
advisory on radon, recommending the testing of homesites for the
presence of this colorless, odorless gas. In April 1989, the EPA
recommended that school officials test their buildings for radon. Later
that year, EPA administrator William Reilly claimed that 10 million
homes in America may have dangerous levels of radon. He cited Iowa as
having 71 percent of its homes above the EPA's "danger level" -- a
higher percentage than any other state.
Figures such as these suggest a crisis. Yet, once again, the risk to
the public has been greatly exaggerated. Warren Brooks demonstrated in
a March 1990 syndicated column that the EPA's figures simply did not
add up. "According to the EPA's risk model, Iowa should have had 1,600
lung cancer deaths from radon alone in 1988," noted Brooks. "Instead,
Iowa's total lung cancer deaths in 1988 were 1,420, and even the EPA
admits that at least 85 percent of those were caused by smoking. Diet,
genetic factors and simple aging probably account for nearly all of the
rest." Brooks points out that, based on EPA guidelines, venting radon
from American homes could cost $8 billion to $10 billion.
Where Will It All Lead?
Unless informed Americans once again limit our federal government to
its proper constitutional role, it will continue to use
environmentalism as a pretext for grabbing power. Unless the power grab
is exposed and opposed, the developing bureaucratic tyranny of
California's South Coast Air Quality Management District (AQMD) may be
a sign of things to come. According to the Wall Street Journal, this agency is, "in a sense, a model for environmental agencies everywhere."
In order to combat pollution, the AQMD has submitted a 20-year plan
that would limit even bakeries, dry cleaners, and backyard barbecues.
It intends to restrict construction of new drive-through restaurants
and banks, and to eliminate all aerosols. This unelected body fully
intends to alter the life-styles of Californians under the guise of
fighting pollution. Its budget has been increasing at the rate of 32
percent per year, and its growing staff already numbers 900.
In February 1990, a coalition of builders, manufacturers, and labor
unions charged that AQMD regulations could cause at least 350,000
persons to lose their jobs. The coalition further maintained that the
regulations would cause many businesses to flee the region. David
Finegood, the owner of a furniture company, said that AQMD rules are
compelling him to move a manufacturing plant from Compton, California
to Tijuana, Mexico in order to stay competitive.
Riding the Issue
Many Americans sincerely believe that regulations are necessary in
order to clean up the environment, Yet the EPA's own studies show that
the environment is cleaner than in the past. In April 1990, an EPA
report found that the release of toxic substances into the environment
by industry had dropped by about 9 percent in 1989 as compared to 1988.
In its annual report on urban quality, the EPA concluded that
pollutants had fallen dramatically from 1979 to 1988.
Why are tough new environmental restrictions being imposed when air
quality is improving? The answer is simple: Environmental regulations
are based not so much on safe-guarding the environment as on
implementing the political agenda of the environmentalists. "We've got
to ride the global warming issue," Senator Timothy Wirth (D-CO) told a
reporter. "Even if the theory is wrong, we will be doing the right
thing in terms of economic and environmental policy." Stephen
Schneider, a respected global warming expert with the National Center
for Atmospheric Research, put it this way:
On the one hand, as scientists, we are ethically bound to
the scientific method, in effect promising to tell the truth, the whole
truth, and nothing but -- which means that we must include all the
doubts, the caveats, thefts, ands, and buts. On the other hand, we are
not just scientists but human beings as well. And like most people we'd
like to see the world a better place, which in this context translates
into our working to reduce the risk of potentially disastrous climatic
change. To do that we need to get some broad-based support, to capture
the public's imagination. That, of course, entails getting loads of
media coverage. So we have to offer up scary scenarios, make
simplified, dramatic statements, and make little mention of any doubts
we might have .... Each of us has to decide what the right balance is
between being effective and being honest.
Environmental Politics
The key to understanding the environmental issue is to recognize that
the politics of environmentalism is much more important than the
science. There are certainly legitimate environmental concerns that
should be solved at the local and state levels. But, at the same time,
environmental concerns -- real, imagined, and exaggerated -- are being
used to further a not-so-hidden political agenda. Moreover, these same
concerns are also being portrayed as global crises that can only be
adequately addressed on the international level. The latter argument is
being used to justify more and more international regulation in order
to help bring about a new world order. As Jessica Tuchman Mathews put
it in the July/August 1990 issue of the EPA Journal:
[E]nvironmental imperatives are changing the concept of
national sovereignty. The post-postwar era is still unnamed, but its
defining characteristics are clear: multipolarity, replacing the
bipolar U.S.-USSR axis around which nations used to array themselves;
economic interdependence; and diverse invasions of national sovereignty.
Putting these trends together, it is likely that
international problem-solving in the decades ahead will for the first
time depend on collective management, not hegemony. And it is precisely
this form of governance that global environmental problems will yield.
Mathews, vice president of the World Resources Institute, is a member
of the world-government-promoting Council on Foreign Relations.
Put simply, the power grab is not limited to Washington DC alone.
Unless stopped, environmentalism will be used to convince Americans not
only to lower their standard of living and boost federal spending, but
to accept international controls. Unless businessmen and others who
profit from the free enterprise system work to save this now-threatened
system from extinction, they can anticipate losing not only their
businesses and property but their freedom as well.
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