American Elephants


How Bureaucracy Simplifies Our Lives: by The Elephant's Child

Diane Katz has the enviable job of wading through Washington’s massive webs of red tape to discover new and excruciatingly silly regulations that are strangling the economy. Barack Obama has insisted that regulation is NOT a problem, and besides the great mass of American people must be regulated to make them safe.

— The new Consumer Financial Protection Bureau (the one with the illegal head, appointed during a Congressional recess when Congress was in session ) is busily issuing regulations. It has devised a 1,099-page proposal to streamline the mortgage process. The creation of this blueprint for a more “consumer-friendly ” mortgage is described in a 533-page report titled “Evolution of the integrated TILA-RESPA disclosures.” (TILA stands for Truth in Lending Act, and RESPA is Real Estate Settlement Procedures Act).

They found the most effective way to reduce confusion surrounding the APR (annual percentage  rate) was to add the simple statement “This is not your interest rate.”

In only two years the CFPB has grown from zero to 900 employees.  However, to redesign the mortgage documents they required the assistance  of Kleimann Communication Group, a self-described “small, agile, woman-owned business: at a cost to taxpayers of nearly $900,000. Naturally next year they need a 32 percent budget increase to $448 million. As Diane Katz explains:

So let’s recap: We have a 2,300-page statute giving rise to a 1,099-page regulation to simplify mortgages, which is spelled out in a 533-page report that chronicles consumer testing from one end of the country to the other. All of which indicates that home loans would likely be a lot simpler if government was a lot less involved.

So what could the mindset of Christopher Dodd and Barney Frank have been that they thought this was a good idea?

— Here’s another: In its ceaseless quest to protect us from ourselves, Congress in 2009 compelled credit card companies to confirm an applicant’s “ability to pay” before approving an account. Lawmakers apparently decide that Visa, MasterCard, Discover and the like somehow lacked the incentive to manage their own credit risk, (As opposed to, say, the elected officials who have racked up $1.2 trillion in national debt this year).

The new regulation is widely interpreted as prohibiting millions of stay-at-home moms ( and a fed dads) from obtaining credit cards of their own altogether. That’s because the “ability to pay” regulation requires credit card applicants to have an independent source of income to open an account or else to find a so-signer.

— One of Ms. Katz’s more entertaining discoveries has been that the notorious diet dictator, “Nanny” Bloomberg, Mayor of New York City, the man who’s trying to ban the sale of soda in cups larger than 16 oz. (The Big Gulp)— is a big fan of hot dogs: (Beef, Water, Salt, Sorbitol, Sodium Lactate, Hydrolyzed Soy, Corn Gluten Protein and Wheat Gluten Protein, Paprika, Natural Flavorings, Sodium Diacetate, Sodium Phosphate, Sodium Erythorbate, Sodium Nitrate). Makes you want to run right out and get one with mustard and relish.

The first of these regulations is Number 35 on Diane Katz’s list. While it must be fun to seek out this nonsense, it is a flashing warning sign for the economy. Silly, unnecessary regulations impose tremendous costs in time and funds for struggling businesses. Imagine: a brand new agency to issue regulations— grown to 900 employees in just two years



Here’s How Obama Destroys American Jobs by The Elephant's Child

This video was made back in October of last year, when Henry Juszkiewicz , CEO of Gibson Guitar Company testified before Congress.  Gibson Guitars has been accused by the Obama Administration of running afoul of the Lacey Ace — one of the oldest U.S. environmental regulations. Gibson’s violations were deemed so severe that armed federal marshals entered its facilities in Nashville and Memphis in August 2011 and seized millions of dollars worth of guitars, which the government alleges may have been constructed of wood illegally harvested in Madagascar and India.

Under the Lacey Act, it is a federal offense “to import fish, wildlife or plants” in violation of any foreign law.” Congress passed the law in 1900 to protect states against poachers who fled with their goods to another state. It thus runs afoul of fundamental tenets of Anglo-American common law: that “men of common intelligence” must be able to understand what a law means. Good luck with that.

It has been nine months since the Gibson raid, and as yet they have not been charged with anything. Gibson was set up. The story here, according to Kim Strassel of the Wall Street Journal says:

The story here is about how a toxic alliance of ideological activists and trade protectionists deliberately set about creating a vague law, one designed to make an example out of companies (like Gibson) and thus chill imports—even legal ones.

The Lacey Act was passed in 1900 to stop trade in illegal wild game. Over the years it has expanded, and today it encompasses a range of endangered species. It requires American businesses to follow both U.S. and foreign law, though with most Lacey goods, this has been relatively clear. Think elephant tusks, tiger pelts or tropical birds.

That changed in 2007, when an alliance of environmentalists, labor unions and industry groups began pushing for Lacey to cover “plant and plant products” and related items. Congress had previously resisted such a broad definition for the simple reason that it would encompass timber products. Trees are ubiquitous, are transformed into thousands of byproducts, and pass through dozens of countries. Whereas even a small U.S. importer would know not to import a tiger skin, tracking a sliver of wood (now transformed into a toy, or an umbrella) through this maze of countries and manufacturing laws back to the tree it came from, would be impossible.

The drive to expand the Lacey Act was headed by” a murky British green outfit called tje Environmental Investigation Agency. The EIA is anti-logging, and understands that the best way to force developing countries to “preserve” their natural resources is to dry up the market for their products. They would prefer that wood be sourced from the US. and Europe where green groups have more influence over rules.”

Gibson has been trapped, as intended. The company is not accused of importing banned wood. The ebony it bought for frets is legal and documented.”The issue is whether Gibson ran afoul of a technical Indian law governing the export of finished wood products.  The U.S. government’s interpretation of Indian law suggests that the wood Gibson imported wasn’t finished enough.”

If you wondered why more jobs are not being created in our economy, you only have to look at Gibson, to see why businessmen might be scared and huddling down to wait Obama out. And Gibson is not alone. There are other companies suffering under the loony expansion of the Lacey Act. But there are Congressmen trying to amend the Lacey Act to see that criminal enforcement of the Lacey Act is unnecessary, and leads to miscarriages of justice. Laws should be clear so that people can understand what they must do to follow it.

The solution, of course is deregulation. According to Iain Murray of CEI , if deregulation were implemented correctly, it would provide an almost cost-free stimulus of a trillion dollars or more.  According to the Small business Administration, the regulatory burden on our economy is a staggering $1.74 trillion annually. The Obama administration is in full denial, and Cass Sunstein, who heads up the “Office of Information and Regulatory Affairs, calls it an “urban myth.”

In Wayne Crews annual report on the growth of the regulatory state Ten Thousand Commandments, notes that the number of pages in the Federal Register has grown from 67,000 to 81,405.  Each page delineates a rule that imposes costs on businesses while creating more jobs for bureaucrats. The costs of compliance with regulations average $10,585 per employee.  No wonder small businesses, th e usual engine of growth in the economy, have stalled. Over 60 percent of small businesses have no plans to hire in the next year.

Obama’s standard statement is “Private sector employment rose by 130,000 jobs in April. The economy has added private sector jobs for 26 straight months for a total of more than 4,25 million jobs over that period.” Those 130,000 jobs don’t sound like such a big deal when you realize that the economy would h ave to create 125,000 jobs each month just to keep up with population growth. But Mr. Obama has some trouble with math.



Eliminate Excessive Regulation; Ignite an Economic Boom. by The Elephant's Child

American businessmen complain about government regulation. President Obama is quite sure that they are mistaken, but he is a progressive and regulating comes as naturally as breathing. “During Obama’s first three years, 105 major federal regulations added more than $46 billion per year in new costs for Americans. This is more than four times the number and more than five times the cost — of the major regulations issued by George W. Bush during his first three years,” according to a study by the Heritage Foundation.

In January 2011, President Obama announced —with much fanfare — a new get-tough policy on overregulation. He acknowledged that “rules have gotten out of balance” and have had a chilling effect on growth and jobs. He pledged a comprehensive review. But the flow of regulation continued with 32 new major regulations in 2011 that increased regulatory costs by almost $10 billion annually along with another $6.6 billion in one-time implementation costs. Mr. Obama cites removing the regulation that designated a spill of farm milk as a hazardous oil spill, as a major accomplishment. But that seems to be the only one.

Dodd-Frank and ObamaCare add hundreds of new regulations. Neither Congress nor the Administration keeps track of the total number and cost of regulation. During 2011 the administration completed a total of 3,611 rulemaking proceedings according to the GAO, of which 79 were classified as major — meaning that each had an expected economic impact of at least $100 million per year. Thirty-two of those put new limits or mandates on private sector activity. Only five major actions decreased regulatory burdens.

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In an environment where increased regulation is considered to be a public good, states and municipalities do their share of regulating. The Institute for Justice explains in the following video how licensing can restrict the entrance to many occupations. In many cases, it’s just bureaucratic busybodying, in others those already in an occupation hope to cut back on the competition by making it harder to work in their field. It’s quite a racket. And very hard on those who just want to establish a small business, but can’t afford the required licensing regulations.

There was quite a bit of publicity a while back about hair-braiding in the African-American community. It is really an art, and takes long practice, with beautiful results. Beauticians, however, took exception to people without a beautician’s license taking away what might have been some of their business. Beauty schools are expensive, take quite some time and don’t teach that kind of hair-braiding. They teach hair cutting and curling, coloring and tinting —that sort of thing, which the hair braiders don’t do. I don’t know how it turned out, nor in what states it was a problem, but I hope the hair braiders won.

In Washington state, Interior Designers have fought a battle to disqualify anyone from being called an Interior Designer, who hasn’t had the requisite schooling and passed  certifying examinations. It has been on the ballot twice and lost both times, but they will keep trying to eliminate the competition.

Emergency Medical Technicians save lives with their training and skills. It seems absurd that licensing requirements for many simpler jobs should be so much more costly and involve more time..

It is not the nature of governments at any level to remove or repeal regulation. They’re there to make law, not get rid of old, unworkable or unwieldy regulation. It is going to take citizen involvement and a lot of pressure to help make it happen. The statist web of controlling regulations and requirements can eventually paralyze a society. That is what has happened to Europe. The free market that would save Europe is never tried because the vast web of governance is too entrenched to relinquish control.



The Out-of-Control EPA Strikes Again and Again! by The Elephant's Child

— The Environmental Protection Agency issued final regulations on Thursday aimed at “slashing toxic air pollution from power plants that crosses state lines and potentially puts thousands of lives at risk.” Administrator Lisa Jackson said “No community should have to bear the burden of another community’s polluters or be powerless to prevent air pollution that leads to asthma, heart attacks and other harmful illnesses.”

By 2014, the regulations will cut SO2 emissions by 73 percent and NOx emissions by 54% below 2005 levels, EPA  said.  The agency said that will prevent 34,000 premature deaths, 15,000 heart attacks and 400,000 cases of asthma starting in 2014, which would amount to $280 billion a year in health benefits.

Ms. Jackson needs to get in touch with the National Center for Health Statistics.  Little is understood about preventing asthma from developing.  Medicine knows how to control the symptoms, but not how the disease develops.  The prevalence of asthma has grown from 3.1% of the US population in 1980 to 8.2 percent in 2009, Particularly in the Northeast and Midwest regions, yet air quality has improved enormously in urban areas since the 1970s.  Translation: Once again the EPA is making up statistics. Explain how you know if you are preventing heart attacks?

— In New York, the EPA wants New York City to build a $1.5 billion-plus cover for Hillview, a 90-acre, 900 million gallon reservoir in Yonkers, to prevent contamination by cryptosporidium, a water-born pathogen that causes diarrhea.  The problem is that the pathogen hasn’t been found in the reservoir despite years of tests, and is barely present at all in the city.  The EPA claimed that covering the reservoir (remember it’s 90 acres) would prevent between 112,000 and 365,000 cases annually.  Another release from the EPA Department of Making Up Statistics (MUS).

— Meanwhile down in Texas, the EPA adopted a rule to place especially stringent regulations on sulfur dioxide emissions that would shut down the use of lignite coal in Texas. Retrofitting plants that now use lignite would involve three to four years of engineering, fabrication, boiler re-construction, new rail construction and complex new permits — at multi-billion dollar costs.  About 11% of electricity in Texas comes from lignite coal. In the last decade, power plants in Texas have cut sulfur dioxide emissions by 33 percent without EPA assistance.

Lignite mining in Texas supports  10,000 to 14,000 jobs, the local tax base and many Texas communities.  It contributes $1.3 billion to the state economy and $71 million to state revenues.  President Obama could not get cap and trade past Congress, but he’s finding other ways to make good on his promise to bankrupt coal, and destroying jobs by the thousands.

— With unemployment continuing to rise, President Obama must dream of some big corporation showing up to offer a shovel-ready, multibillion dollar project to create 100,000 jobs and on top of it all to reduce U.S. reliance on oil from the Middle East.  Secretary of State Hillary Clinton has had that offer sitting on her desk ever since she was first sworn in.

Trans-Canada applied in 2008 to build a new pipeline —the Keystone XL — to bring oil from the oil-rich tar sands of Alberta to refineries on the Gulf.  The Keystone  pipeline has been operating from 2010 to Cushing, OK.  Another Canadian pipeline runs across the border to Chicago. Trans-Canada projects that construction would generate $600 million in new state and local taxes.  The pipeline would even carry oil from the Bakken formation  for efficiency gains for oil producers in North Dakota and savings for Gulf Coast refiners.

The State Department found that the XL would meet industry standards and not significantly affect the environment.  The EPA has been stalling and putting up roadblocks ever since.

The National Resources Defense Council explains: “This is really a campaign against tar sands expansion rather than a single pipeline.” The EPA complains at length about the ‘greenhouse gas intensive tar sands” and frets about what Canadians are doing to migratory birds.  There are many thousands of jobs that are not being created because of the EPA’s power-grab, and the regulations they drum up to keep it from happening.




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