Robert R.M. Verchick recently completed a two-year stint with the U.S. Environmental Protection Agency, and returned to his work at Loyola University in New Orleans, and, happily, to the rolls of active CPR Member Scholars. While at EPA, he published Facing Catastrophe: Environmental Action for a Post-Katrina World, and just a few days after returning to CPR, he's published two op-eds on disaster preparedness and recovery.
In the Christian Science Monitor on April 13, he asked whether Japan's recovery from the recent tsunami and nuclear disaster would be "heavy-handed or hands-off"? He goes on to contrast the recovery efforts in Japan after a 1995 earthquake laid waste to the city of Kobe with the ongoing post-Katrina recovery in Verchick's home town of New Orleans. In Kobe, Verchick says, strong-willed Mayor Kazutoshi Sasayama developed a master plan for reconstructing the city, and pursued it with iron determination. Verchick writes,
[P]rogress came at great cost. That “makeover” became for some a “takeover,” as residents of modest means saw their property downsized or expropriated. Japan’s emergency management office officially refused to allow government aid to go directly to residents (although some local governments ignored the edict), foisting hardship on the city’s elderly and disabled populations, as well as the working poor. Public hostility mounted. On the first anniversary of the quake, the city’s vice-mayor committed suicide. Eventually, city leaders reversed their previous stances and invited greater community involvement; but among some, resentment continues to this day.
By contrast, the New Orleans recovery has been marked, in Verchick's description, by a "light touch."
Full textRight about this time a year ago, Americans were learning about a massive explosion aboard an oil rig in the middle of the Gulf of Mexico called the Deepwater Horizon that had occurred the day before. Video footage of the flame-engulfed rig began splashing across television screens, and we were told that 11 workers on the rig were “missing.” (In fact, those workers had been killed.)
Also unclear or unrevealed was the extent of the environmental harm that was being done. In the day-after stories, BP and the federal government expressed the view that pollution was not much of a concern. Here’s what the New York Times article said,
Officials said the pollution was considered minimal so far because most of the oil and gas was being burned up in the fire. “But that does have the potential to change,” said David Rainey, the vice president in charge of the Gulf of Mexico exploration for BP, which is leasing the rig.
And change it did. The months-long ooze of crude oil from the well beneath Deepwater Horizon eventually came to be the largest oil spill in U.S. history.
Full textCPR Member Scholar John Echeverria was on Capitol Hill yesterday, testifying before the House Judiciary Committee’s subcommittee on the Constitution. His topic was a proposed bill from Rep. Jim Sensenbrenner (R-WI) to impose federal limits on state and local use of eminent domain – the authority to condemn private property so that it can be used for public purposes. The subject became particularly controversial in 2005 when the Supreme Court issued its ruling in Kelo vs. City of New London, upholding the city’s condemnation of private property so that it could be sold and developed by a private developer whose project the city had concluded served the public interest of economic development.
Sensenbrenner’s bill, H.R.1433, the Private Property Rights Protection Act of 2011, would suspend federal economic development funds for states that condemn property for purposes of economic development. That’d be a powerful disincentive, although short of an outright prohibition on the use of eminent domain. Of course, there’s only so far that Congress can go in banning the use of eminent domain, since it is explicitly authorized in the Fifth Amendment to the Constitution. (That’s right, the amendment that ensures citizens cannot be forced to testify against themselves also protects us against double jeopardy, ensures due process of law, and prohibits governments from taking private property for public use without providing just compensation. It’s an action-packed 108 words.)
In his testimony, Echeverria argues that federal action is “unnecessary, unwise as a matter of policy, and would be highly destructive of the recent efforts by the States to address this specific issue.” He goes on to say:
The basis for these conclusions is that, in the six years since the Kelo decision was handed down, every or virtually every state legislature in the country has studied proposed reforms on this subject, held hearings on the use of eminent domain, and in many cases enacted new legislation limiting the use of eminent domain. In addition, in several States ballot measures addressing eminent domain reform have been submitted to the voters. All told, approximately 40 States, four-fifths of all the States in the nation, have now adopted some kind of post-Kelo reform measure. Some applaud the reform steps adopted, while others believe that some of these steps have been misconceived. Some believe certain state legislatures have gone too far in curtailing the power of eminent domain, while others believe some States have not gone far enough or have abdicated their responsibility by not imposing any new constraints on this governmental power. The bottom line, however, is that the state legislatures, as well as the voters themselves in some States, have fully engaged on this issue.
His full testimony is here.
Full textThis afternoon at 1:00 p.m., the House Energy and Commerce Committee’s Subcommittee on Energy and Power will check one more box in the House GOP's ongoing effort to demonstrate its appreciation to the corporate interests that helped elect them, by holding a hearing on a proposal disingenuously called the Transparency in Regulatory Analysis of Impacts on the Nation Act of 2011, or as they acronym-ize it, the TRAIN Act.
As the name does not at all suggest, it’s a bill about undercutting environmental regulations that inconvenience the energy industry. The idea is to create a sort of non-environmentally minded Star Chamber to review the full slate of Clean Air Act and coal ash regulations, for the purpose of concluding that they cost too much. That’s not quite how they phrase it, of course, but that is the purpose.
Here’s an excerpt from the committee majority staff’s description of the bill:
In the past two years, the Environmental Protection Agency (EPA) has promulgated numerous final and proposed rules that will require retrofitting of power plants, increased fees for new construction and operation of units from diverse sectors of the economy, potential construction delays, revisions to state plans to implement federal requirements, and the adoption of Best Available Control Technology measures to address greenhouse gas emissions from diverse sources.
EPA’s own analysis indicates that some of these rules will have significant costs; other actions have not yet been analyzed. There has not, however, been an analysis of the cumulative impacts of these regulations on global competitiveness, cumulative change in energy and fuel prices, employment, or reliability of the electricity supply. Nor has there been an analysis of the cumulative impacts on consumers; small businesses; regional economies; state, local and tribal governments; specific labor markets; and agriculture.
Of course, every rule that emerges from EPA undergoes a rigorous cost-benefit analysis, totting up every penny of cost to industry (calculated by industry, for the most part, so you can imagine they don’t under-project), and comparing it with the dollar value of the benefits that would result. For a number of reasons, that process is deeply flawed and slanted against protective regulations. It ignores, for example, the value of benefits that can’t be readily monetized, with the net effect that benefits are commonly understated, while the costs to industry are often exaggerated.
Full textOne hundred years ago today, 146 people perished in one of the nation’s worst workplace tragedies – the Triangle Shirtwaist Factory Fire in the heart of New York City. The story is gruesome, and each detail of exactly how so many people were trapped in a burning building was, and remains, a reminder of what can happen when worker safety is sacrificed in the name of profit.
Here’s the barest sketch. The Triangle Waist Factory in lower Manhattan relied on cheap, exploitable labor to produce women’s blouses – shirtwaists, as they were known. The factory occupied the 8th, 9th and 10th floors of a building at 29 Washington Place, and its employees were mostly young immigrant women, some as young as 14. They’d come to the United States for a better life, and found themselves working more than 50 hours a week, six days a week, in a non-union shop, laboring under sweatshop conditions. (This, of course, was before unions had essentially created the concept of “the weekend.”)
On March 25, 1911, at about 4:45 p.m., fire broke out on the 8th floor and spread quickly to floors above, fueled by piles of fabric scraps. The factory had no alarm system and no sprinklers, although such technology was available. Workers were quickly trapped, not just by the flames but by doors locked by company officials worried that workers would abscond with fabric if allowed to leave by any but the main door. The fire escapes did not reach to the ground, and eventually collapsed under the weight of the many escapees. A heroic elevator operator made several rescue runs but had to abandon the effort when the elevator’s guide rails buckled under the heat. Responding fire trucks lacked ladders that could reach the victims. Faced with the prospect of being burned alive, many of the workers chose instead to leap to their deaths.
Watching in shock that day was a young social worker, Frances Perkins, who would go on to champion a successful crusade for safer working conditions. (She would later become the first female Cabinet member, serving as FDR’s Labor Secretary.)
In a spot-on piece in Wednesday’s Washington Post, columnist Harold Meyerson observes that industry rose in opposition to Perkins’ proposed reforms, offering arguments that ring familiar even today. Proposed fire code reforms would cause “the wiping out of industry in this state,” said the Associated Industries of New York, and were “absolutely needless and useless,” said a lawyer for the Real Estate Board of New York City. The president of the Real Estate Board argued that, “To my mind this is all wrong….The experience of the past proves conclusively that the best government is the least possible government, that the unfettered initiative of the individual is the force that makes a country great and that this initiative should never be bound…”
Full textOn last night’s PBS NewsHour, Rep. Darrell Issa (R-CA), chair of the House Oversight and Government Reform Committee, took a shot at CPR’s Sidney Shapiro, who was the lone witness that Committee Democrats were allowed to invite to testify at yesterday’s hearing on the costs of regulation. Issa badly mischaracterized Shapiro’s testimony, saying:
The minority chose a witness. Mr. Shapiro spoke on behalf of his views, which were, in a nutshell -- and he reiterated them -- that he sees no reason to have a cost-vs.-benefit analysis. He thinks it's futile, meaning that no matter how much it costs, go ahead and do regulations. I would hope that, instead of the progressive witness that they had, that they would have sensible groups that see an advantage to environmental progress, while at the same time getting business progress, that win-win that we often look for but don't find in government, but we find it in the private sector whenever possible.
It’s true that Shapiro and a host of other scholars think that cost-benefit analysis is hopelessly slanted toward industry’s interests, and that it’s a fatally flawed method of regulatory impact analysis. But that doesn’t mean, as Issa fabricates, that he’s opposed to any analysis and that “no matter how much it costs, go ahead and do it.” Shapiro and others believe that cost ought to be one of several important considerations. Under today’s cost-benefit analysis methods, if it costs a chemical company one penny more to avoid pumping cancer-causing emissions into the air or water than it costs the victims of those emissions to treat the cancer that results, a regulation to prohibit or otherwise mitigate emissions would probably fail a cost-benefit analysis. Note, by the way, who pays for what in that example. It’s not the chemical company paying medical bills, even though it’s their pollution. Cost-benefit analysis treats it as a simple mathematical equation, without worrying about such questions of morality. It proceeds from the premise that polluters have a presumptive right to do harm in pursuit of profit, and that the rest of us must accept the risks associated with their profit, unless the numbers don’t happen to add up.
That’s one of a number of reasons why cost-benefit analysis is ill-considered. Others include that it relies on industry’s inflated cost projections, and ignores some of the most important benefits. As Shapiro wrote in a recent post on CPRBlog,
Full textNeither does OMB’s methodology account well for items that defy monetization – the value of keeping people healthy rather than simply treating their pollution-caused illnesses, or the value of a great view from the top of a mountain that hasn’t been shorn clean by mountaintop mining. But even allowing for those shortcomings, all of which accrue to the anti-regulation side of the ledger, almost all regulations have greater economic benefit than cost.
We'll be live-tweeting today's hearing of the House Oversight and Government Reform Committee. Follow @CPRBlog.
Full textCPR Member Scholar Noah Sachs has a piece on The New Republic's website dismantling the GOP House majority's favority piece of anti-regulatory legislation, the REINS Act. The proposal would block all regulations from taking effect unless they are specifically approved by both houses of Congress within 70 days of submission and then signed into effect by the President. He writes:
Last year, [the Office of Management and Budget] concluded that the annual cost of major rules issued between FY 1999 and 2009 was $43 to $55 billion, while the annual societal benefits of those same regulations ranged from $128 billion to $616 billion—an excellent return on investment by any standard. To see why the REINS Act would jeopardize these benefits, take a look under the hood. The bill would apply to any agency regulation with an expected annual economic impact of $100 million or more. Between 50 and 100 of these “major rules” are issued annually. [Speaker of the House John] Boehner dismisses them as “red tape,” but most are critically important, governing everything from food safety and housing discrimination to airline pilot training, accounting standards in financial statements, and air pollution control. Under the REINS Act, if just one house were to reject a rule, or simply didn’t act on it within the prescribed time period—70 legislative working days—the rule would be dispatched to the regulatory graveyard. Or, put another way, the bill would provide one house with veto power.
He continues:
by opening up a second front for corporate lobbyists to negatively influence policymaking. Consider the January 2010 Department of Transportation (DOT) regulation on Positive Train Control—GPS systems and computerized track controls that can help prevent train-to-train collisions and derailments. The rule was explicitly mandated in a 2008 statute signed by President Bush in the wake of a train collision in Los Angeles that resulted in 25 deaths and more than 135 injuries. To this day, however, the rule is opposed by major freight haulers and the Association of American Railroads, who object to the cost of the system. In all likelihood, had the REINS Act been in effect when the regulation was being considered, major railroads would have flooded Congress with campaign contributions and arguments against the rule, in hopes of killing it. The problem with this scenario is that, unlike a federal agency, which will always have to publicly justify its decisions with scientific and economic data, Congress could use the REINS Act to kill rules on virtually any premise it wanted—and do so behind closed doors or without much substantive debate. Politics, not sound policy, could rule the day.
Or, perhaps more accurately, politics and scheduling. REINS Act supporters know full well that Congress would never be able to debate and vote on 50 to 100 major federal regulations each year (certainly not within the 70-day window for each one). Already, budget negotiations drag on for months, while battles over confirming a single federal judge can rage for a year or more. And, although the Act includes some “fast-track” procedures, such as requiring that each house of Congress take an up-or-down vote on a regulation without amendments after two hours of debate, those hardly solve the problem: That’s still a lot of floor time devoted to regulations—too much, in fact, for most of them to stand a chance of survival. For REINS Act proponents, of course, this is all for the good: Under the guise of oversight, they want Congress’s notorious inability to act quickly to help kill important agency rules.
It's a great piece, well worth a read.
Full textThis monring, CPR Member Scholar Sidney Shapiro will testify before Rep. Darrell Issa's House Oversight and Government Reform Committee on the economic value of regulation. He'll be a lone voice on the roster of witnesses. The hearing will have two panels of witnesses. The first will feature five industry representatives, and the second will feature two representatives of right-wing think tanks (Heritage and Mercatus), one leader of a nonprofit that advocates for small businesses, and Shapiro. That would be eight witnesses who may be expected to support Issa's witch hunt for burdensome regulations, versus one defender of efforts to actually enforce the laws Congress has passed to protect health, safety, the environment, workplace safety, consumer rights and more.
Shapiro's may be a lone voice, but it'll be a clear one. And Shapiro's testimony will cover a fair amount of territory. Among other things, he'll review the findings of the recent CPR ereport he co-authored demolishing the Small Business Administration's Crain and Crain report, which provides the flimsy basis for the frequently heard assertion that regulations impose an annual burden of $1.75 trillion on the economy. (Spoiler: The number is severely overcooked, and the authors don't bother to account for the economic benefits of regulation, which happen to be larger than the costs.)
Another topic certain to come up is the GOP's REINS Act, the scam of a proposal to block all regulations from taking effect unless they are specifically approved by both houses of Congress within 70 days of submission and then signed into effect by the President. The proposal is a transparent effort to create a mountain-sized obstacle to enforcement of laws that the GOP and its business supporters don't like, but which nevertheless are the law of the land. About a dozen things about the proposal scream "bad idea," and Shapiro described them in a backgrounder last fall. (It's pegged to the 2010 iteration of the bill, but the current version is no better.)
Today's hearing starts at 9:30 ET, and the Committee's website promises a video feed, and CPRBlog will be live-tweeting from the hearing room. Follow @CPRBlog.
Full textOne of the top agenda items for the new Republican majority in the House of Representatives will be pressing an anti-regulatory bill they're calling the REINS Act. The bill would subject newly minted regulations protecting health, safety, the environment and more to a requirement that Congress adopt resolutions of approval within 90 days of the date that the regulatory agency finishes its work. It's a miserable idea for a number of reasons, many of which CPR Member Scholar David Driesen details in an op-ed in this morning's Syracuse Post-Standard. He writes:
Since gridlock, backed by filibusters, makes passage of legislation extremely difficult today, this approach promises to make setting significant standards to address looming problems, from climate disruption to a new potential economic crisis, very unlikely. Just to make sure that routine delays in Congress can derail even popular and obviously needed standards, the proposed legislation provides that a lack of approval in 90 days makes new agency-enacted standards invalid.
This legislation serves the interests of corporate campaign contributors, who spent an unprecedented $50 billion in Senate races alone last time around, at the expense of everybody else. And it’s completely unnecessary. Agencies left to their own devices typically apply expert judgment to standard setting, rather than the base form of unalloyed political decision-making that typifies Congress these days. Of course, even a well-intentioned expert agency can make a mistake, and Congress can already override any regulation. The new bill, however, assumes that all standards seeking to limit financial shenanigans, protect public health or limit environmental hazards should become void, unless Congress manages to get around to declaring otherwise. It thus establishes a strong presumption against any effort to rein in abuses by financial corporations, polluters and other actors threatening the public.
Of course, the REINS proposal is one part bad policy and two parts political prop. Republicans are arguing loudly this year that the economy is in bad shape not because of their own hands-off approach to regulating Wall Street throughout the last decade, but because supposedly burdensome regulations are choking the nation's businesses. Lay aside for the moment that their brief is full of holes, it does at least give them an argument to distract voters. They're hoping that by telling us that environmental, health and safety regulation is the cause of unemployment, we won't remember just exactly when the recession started, and under whose watch.
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