The Cost of Non-Regulation

The debate over pipelines in New York, and from Canada through the midwest, has been cast as the value of the natural gas versus the value of the environment, particularly water supplies. We can have one or the other. But not both. Either the environment or the gas.

That’s a stark choice. Notice how regulation or strong liability laws could give us a third choice. We could have both. A strong regulatory agency might be able to mitigate most of the downside by regulating the techniques and the precautions. Or drive oil companies to bring their gas to market instead of burning it off at the wellhead. Strong liability and damage laws could force all involved to avoid projects that threaten the environment. If we could do those things we might be able to fashion an acceptable compromise.

But not once the critics have gutted the laws and the agencies. Weak, toothless regulation would not, should not, satisfy environmentalists, including myself. We need good regulation, whether it’s airplane or environmental safety. If we can’t trust the regulators, or design agencies that will do the job, we can’t rely on regulation.

Actually, it’s deeper than that. We as a people have become untrustworthy supporters of regulation. If we can’t trust ourselves to support good regulation, then we can’t trust the regulation we support. And that leaves us with harder choices – all or none. All the gas or none of it. A pristine environment or a trash heap.

Without regulation, we have Gresham’s law – the bad drive out the good. Business loves to condemn regulation. But many businesses see the bigger issue. Regulation can provide an ethical floor under business behavior – a floor of environmentally sound rules, a floor of fair business practices, a floor of fair labor relations. By creating that floor, they fence out the unscrupulous who would undermine every safety improvement by taking the cheapest solutions, and then daring the others to be more scrupulous. Without that regulatory floor the bad drive out the good. That’s Gresham’s law.

Some businesses prefer honorable practices, but others are shameless in resisting any attempt to limit what they can do – and that makes life difficult for everyone.

That’s where politics comes in. There is nothing conservative in the Republican rant against all regulation of business. The unspoken side of their campaign against any regulation of business is clear from the specific regulations they fight – they offer you a platform of mercury and arsenic in the water that you and your family drink, radiation in the air you breathe, a hot climate alternating with biblical droughts, floods, insects, microbes and diseases that until now were restricted to tropical climates, and the “opportunity” for 99% of us to work for pennies a day. In other words they would roll back the American miracle so that their financiers could act like colonial powers, reaping the rewards of America and bringing that wealth somewhere else, wherever they choose to flaunt it.

That’s a take no prisoners struggle. Anti-regulatory extremists can only be met by laws that ban activities. No compromise is possible. Good regulation could change that.

— This commentary was broadcast on WAMC Northeast Report, January 31, 2012.

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