By J. P. Tangen
For Mining News 

Elephant in the room burdens our economy

U.S. small businesses cannot justify significant expansion as long as government imposes increasingly unreasonable regulation

 

Last updated 2/28/2010 at Noon



The economic catastrophe that has plagued the national economy for the past 24 months has precipitated a laundry list of blame factors and proposed solutions that are simultaneously well intended and, thus far at least, ineffective. The bailout of financial institutions and automobile manufacturers has not yet done the job. The rolls of the private sector unemployed continue to grow, albeit more slowly than was the case a year ago. Many of the so-called "shovel ready" projects that were supposed to be funded, are still on the "to do" list, and small businesses across the nation cannot yet justify significant growth in an economy which feels like it is still contracting.

H. L. Mencken observed that for every difficult problem, and this recession clearly qualifies, there is a solution that is simple, neat and wrong. Mencken, however, did not say that all simple, neat solutions are necessarily wrong. Therefore, it behooves us to keep trying to find the way out of the swamp, if for no other reason than because when ideas can be spread around the world at the speed of light, thoughtful people will gravitate toward those concepts that lift all the proverbial boats.


One idea that has gained no traction over the past 17 years, counting the incumbent president as indistinguishable from either of his predecessors, is the idea that government is incapable of resolving serious, far-reaching problems. Ronald Reagan unequivocally identified government as the problem, but we have elected to ignore this maxim. While I am not yet ready for high tea, I do join those who favor less government over better government.


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It should be self-evident that people need jobs that provide a reliable source of regular income, but the elephant in the room delaying or precluding private sector job creation is the increasingly intolerable regulatory burden that government imposes, particularly on the small business sector.

This is not to imply that reasonable regulation in prosperous times is bad.

On the contrary, reasonable regulation of commerce is a legitimate role of government; but the absence of temperance is the untenable opposite of reasonableness.

Except for very rare occasions, regulations tend to come in a "one-size fits all" framework, focusing on the wrong side of the equation - the problem to be averted rather than the cost of the solution.


In the resource development sector, for instance, small placer mines are encumbered by many of the identical environmental proscriptions imposed on world-class open-pit operations.

The red tape is the same, and the delays and costs associated with overcoming those hurdles are likewise.

There is little flexibility on the part of the government when it comes to enforcing the rules, irrespective of whether one job or one hundred are at risk.

I do not suggest that the world is not a better place as the result of certain health, safety and environmental regulations on mining operations. Mining has become one of the safest and cleanest industries in the nation specifically as the result of pervasive governmental oversight.

But that was then and this is now. At the moment, the temporary suspension of selected regulatory burdens on mining in Alaska would go a long way toward expanding employment opportunities. Millions of dollars could be saved inside the government and out by suspending National Environmental Policy Act compliance for 60 months. Those savings could, in turn, be spent on engineering and geological analysis which, indubitably, would lead to mine construction and development, i.e., private sector jobs.


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Similar actions could be taken elsewhere. For instance, the President could, by executive order, excuse the U.S. Army Corps of Engineers from NEPA compliance during the current emergency. By charging the Corps with responsibility for repairing and upgrading the bridges and highways, he would give the concept of "shovel-ready projects" a whole new meaning. Otherwise unemployed people could actually move dirt in exchange for a weekly paycheck.


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Government should be in the service of the people of the nation; but government, like business, has no heart. Both institutions are single-purpose constructs: business delivers goods and services as needed for a dynamic and prosperous lifestyle; government protects and defends people, including entrepreneurs. Government restrains business, but it is the responsibility of the electorate to restrain government. Neither institution is well-suited to restrain itself.

The President can restore prosperity expeditiously by getting government out of the way - not by opening the floodgates, but by clearing the stream. At this moment in time, we do not need better government, we need less red tape.

 

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