INSIGHTS: EPA’S WAR ON THE U.S. ECONOMY
By Guest Column Todd Wynn:
Director, Energy, Environment and Agriculture Task Force, American Legislative Exchange Council
The EPA’s War on the American Economy
The U.S. Environmental Protection Agency (EPA) has begun a war on the American standard of living. During the past couple of years, the Agency has undertaken the most expansive regulatory assault in history on the production and distribution of affordable and reliable energy. With 30 major regulations and more than 170 policy rules being finalized in the next few years, the extent of the recent EPA actions could surpass its entire 40- year history of regulation.
Numerous regulations, all proposed within a short timeframe, have created regulatory chaos and uncertainty, stagnating investment as the economy attempts to recover from recession. These regulations are destroying jobs, raising energy costs, and decreasing reliability of electricity.
The American Legislative Exchange Council, the nation’s largest non-partisan association of state legislators, recently released its comprehensive report on the EPA’s war on affordable energy. The report, titled Economy Derailed: State-by-State Impacts of the EPA Regulatory Train Wreck assesses the impact of the major burdensome regulations implemented by the EPA on state economies. The report also details the broad coalition of public officials, government agencies, unions, trade associations, and legislative bodies that have publicly declared their opposition to the EPA’s regulatory overreach. It ends by outlining strategies for state legislators to get involved in fighting back against an ever-expanding EPA.
According to potential job loss, the top ten states impacted by the EPA are Illinois, West Virginia, Ohio, Alabama, Michigan, Indiana, Pennsylvania, Tennessee, Kentucky and North Carolina- each of which could shed over 20,000 jobs. Illinois will be the worst hit with jobs at risk totaling 38,382. In addition, over 100 power plants across the nation could be shut down due to pending EPA regulations. Ohio is the worst hit with 13 power plants being retired early due to overbearing regulations. Illinois is expected to have the most electricity generation going off line in the next few years, over 8,000 megawatts which is enough energy to power over 6 million homes.
State legislators, U.S. Congressman and American citizens all need to get involved in pushing back against EPA overreach before any hope for a robust economic recovery is strangled by the EPA’s regulatory chains.
ON THE ECONOMY: BARNACLE BILL THE SAILOR
“I’ll spin you yarns and tell you lies, I’ll drink your wine and eat your pies. I’ll pinch your cheeks and black your eyes,” sings Barnacle Bill, the Sailor from the 1930 Talkartoon.
The Economist recently suggested that barnacles attached to a ship’s hull are like “all kinds of supplicants and subsidy-seekers” naturally attracted to the government. This was part of a larger discussion on whether the world’s continued economic woes might be more structural than cyclical as claimed in a new book, Why Nations Fail: The Origins of Power, Prosperity and Poverty written by two economists, Daron Acemoglu and James Robinson. They argue that many countries’ economies are structured in ways that “extract resources from the many by the few.”
This activity, called “rent seeking” by economists is as old as time itself and has often become the major industry of the realm. The court of King Louis the 14th in France or Nero’s Rome come to mind. Unfortunately, rent seeking societies tend not to be productive and eventually are either vanquished or implode.
Interestingly, in the United States, “extractive elites,” as Acemoglu and Robinson call them, may be the reason why the economy continues to stall. On one end of the spectrum, the banking industry, which was determined to be “too big to fail,” needed to be “bailed out” by taxpayers. On the other end, public-service employees, emboldened by their sheer numbers, continue to demand generous pension and social benefits despite depleted government coffers. The thing is, with over 50 percent of the population dependent on the government’s largess in one form or another – and I would argue an even larger portion indirectly dependent on some sort of trade restriction or other regulation – it appears as if rent seeking is now the major industry in America.
So the next time we think about the government “doing something” to help the economy, or a business, or a trade union, we need to remember that – just like Barnacle Bill, the government will spin you yarns and tell you lies, drink your wine and eat your pies, and eventually pinch your cheeks and black your eyes, for there is always a price to pay for a free lunch.