One Sector of the Economy Booms: Government Regulation

First, a chart and explanation from Investors Business Daily (h/t):

Under President Obama, while the economy is struggling to grow and create jobs, the federal regulatory business is booming.
Regulatory agencies have seen their combined budgets grow a healthy 16% since 2008, topping $54 billion, according to the annual “Regulator’s Budget,” compiled by George Washington University and Washington University in St. Louis.
That’s at a time when the overall economy grew a paltry 5%.
Meanwhile, employment at these agencies has climbed 13% since Obama took office to more than 281,000, while private-sector jobs shrank by 5.6%.

More than just the size and scope is changing, too. So is the attitude.
It has long been the case that regulatory agencies could utilize discretion in policing their realms. For instance, OSHA could reduce fines and work with companies to come into compliance by following a process that had the company accept or admit the violations and have fines reduced by 2/3 while also putting a payment plan in place. (This last is especially important to small companies who can’t afford to pay the fine all at once, up front). No more. Apparently the Obama administration has directed OSHA to scrap that approach to “generate” as much “revenue” as possible.
The EPA will also become even more hardline and that will effect businesses and local governments (and your taxes). They’ve ordered the City of Newport to pay a $170,000 fine and spend $25M to fix a problem with their Waste Water treatment plant, after the city had already spent $32M to fix it (whether we can blame the EPA, City of Newport for incompetence–or both–is probably an open question). In addition, the EPA has now tightened their already tough regulations even more. Going from concentrating on so-called “point sources” (smokestacks, fan exhaust outlets, etc.) that emitted certain threshold levels of chemicals they have identified as hazardous wastes to regulating (and fining) any exposed amount of any of these chemicals found in a facility. The apparent theory being that opening a door allows pollution of the atmosphere.
Regulations impact jobs, especially on the small business level. Obviously, we need safe, clean work environments. But working with small companies, as has been done in the past, seems to have been, well, working. This new change in philosophy is both antagonistic and ill-timed, given the current state of our economy.

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Warrington Faust
Warrington Faust
11 years ago

This going to hurt a lot of people, a lot more than the general public may realize.
I know of three small businesses (very small, 1 & 2 man operations) that have each been hit with clean up requirements by the EPA. The “clean ups” average 100K each. At least two were not created by the owners. The only route open to them was to sign a Consent Decree and agree to a yearly fine for non-compliance. They can never afford to comply, so they pay annual fines of about $3,000 each.If the fines were increased, I can see these small businesses disappearing. So far as I know, all of these violations are “technical” as opposed to imminent dangers.
I understand that this is a common solution to a problem with the EPA. They must understand that the fines could never be collected, and that the violations are minor. So, now we know, it is about “revenue”.
I am thinking of a friend building an office park. Work was halted because the well water contained 2 parts per billion of some chemical, where the limit is “I part per billion”. I am also thinking that a billion dollars, stacked in $100 bills is taller than the Empire State Building. I would like to see the machine which could pick out the two counterfeit bills.

11 years ago

Wait, how do you get fined for a mess that you didn’t create?

11 years ago

Just another brick in Hussein Obama’s wall. He’s destroying the private sector and enhancing the Govt. and their public sector unions. Hussein is also making it easier for illegals to remain here. Is it any wonder our economy struggles? The imposter at the top is out to destroy this country under the guise of saving it. Golf at Martha’s Vineyard and am imbecilic bus tour while peoples 401-K’s are being wiped out. Emperor Hussein fiddles while Rome burns.

Warrington Faust
Warrington Faust
11 years ago

Posted by Patrick
“Wait, how do you get fined for a mess that you didn’t create?”
Because the ground is dirty (maybe prior manufacturing), you own it, and you didn’t clean it up. It is real foolhardy to buy land in a former manufacturing area without a very thorough investigation.
I suppose you could sue a prior owner, but if that owner went out of business in 1940, good luck.
Not an expert, but I understand that commercial and residential uses are different, you can build a house on land that you couldn’t operate a business on.
This has become such a problem that the politicans have declared a new catagory “brown fields”. That is previoulsy contaminated soil which by political fiat has beceome “brown fields”. That reduces the obligation on the new owner and makes it financiable and buildable. Old city mayors came to realize that everything in older industrial zones was contaminated. Businesses were moving to the suburbs, rather than deal with it.
I would expect that every old mill building in RI sits on contaminated soil. That is one reason to convert to residential use. You can live on stuff that you can’t work on.
Government is wonderful. I have a few acres of wetlands that people use as a dump. If I “call in the law”, I am at risk of being fined $5,000 a day for allowing their stuff to remain there. It is not a defense that I didn’t put it there, I allowed it to remain.

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