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Friday, November 09, 2007

The Wild Ride Down the Path of Unregulated Free Market Capitalism

Forbes has issued a new summary of America's Greenest (And Least Green) States. West Virginia won as the state with the worst environment.

In my last post, I'd brought up West Virginia's environmental issues. The state suffers from the popular perception that nature needs to suffer in order for business to grow. George Bush and his crony-bent system of political patronage has capitalized on the idea, stolen from Libertarians, that excessive government regulation is bad. Since Ronald Reagan, GOP politicians have said, and the MSM echoed, the concept that regulation constricts economic activity.

We now see in the mountains of West Virginia the effect of regulations neutered at the state and Federal level. Mountaintop removal has violated the Clean Water Act that prevents dumping into creeks. The Clean Water Act of 1977 is composed of the Federal Water Pollution Control Act from 1972 and subsequent legislation.

I'd written my Congressman as part of an e-mail campaign in support of Clean Water Protection Act (H.R. 2169). I hadn't been too familiar with the bill, but I'd been convinced by the folks at ilovemountains.org (link to the right) to support it. Here is my Congressman's response referring to the bill:

"...The legislation aims to amend the Federal Water Pollution Control Act to clarify that fill material cannot be composed of waste. The legislation defines fill material as that which replaces portions of waters...with dry land or which changes the bottom elevation..."

OK, somewhat clear. Fill material isn't waste, that seems obvious. Why would the bill need to clarify the difference, though?

The letter goes on, saying that the bill "does not consider any pollutant discharged into the water primarily for waste disposal to be considered fill material..."

Huh? So pollutants were being called fill? Why would it take Congressional action to clarify the difference?

After translation out of legalese, I realized that the new bill would prevent any pollutant from being called fill material. The purpose of the legislation was to stop waste from being called fill. If H.R. 2169 would prevent waste material from being called fill, that means waste is now being called "fill" in an effort to get around the Federal Water Pollution Control Act, part of the Clean Water act.

Now some fill may not have any pollutants in it, which would mean it could be dumped, even under the new law. My grasp of legalese is somewhat limited so I may be misinterpreting it. The new bill looks like an effort to close the loophole that allowed mining waste to be called "fill".

So "slurry"--a by-product of coal mining--bypasses the Federal Water Pollution Control Act's definition of waste. So as a result, the valleys of Appalachia have been filled with miles and miles of low-grade sludge and rubble, the leftovers from the constant use of explosives, literally blowing mountains apart. Into the V of surrounding valleys the mining debris goes, and with it any chance preserving Appalachia's rare mix of wildlife and flora.

The bill therefore attempts to correct the odious redefinition of waste--calling it fill--to get around the FWPCA's controls on waste. Without the ability to dump mining waste into the surrounding valleys at whose bottoms streams inevitably meander, mountaintop removal would not be authorized or legal. I did see that a rule re-interpretation had led to the practice of mountaintop removal which began in earnest around 2002.

The Clean Water Act was hailed as quite a victory for residents of Appalachia, who'd been forced to live downriver of massive dams that hold mining byproducts, called tailings. Coal mining companies build massive dykes to hold back the mix of tailings and slurry, which is kept in large pools braced against nearby mountains. Tailings (as the residues of mining are called) have long been a problem. Mining residues can't be put back into the mine from which they originate nor can they be dumped just anywhere, and over time they combine with water that's trapped in the sludge pool.

From time to time, levees holding back the slurry break. In Buffalo Creek, West Virginia, in 1972 one such dam broke and sent a 10-foot-plus wall of slurry and water down a remote valley. The coal waste smashed through everything in its path. The mix quickly dried into a hardened, asphalt-like mass, forcing survivors to use pickaxes to chip their way down to the valley floor and retrieve what was left of their belongings.

For the people living in the valley, it was an unforgettable experience. For most others, it was simply someone else's problem. The difference is a matter of perspective and ethics. Much of America relies on coal for its energy, so accepting the risks of coal use need to be understood. And as the ultimate users of coal-based energy, we need to be conservation-minded, and demand that the latest and safest technologies be used to extract and burn coal.

We would hope that our energy providers would use technologies to cut down on toxins put in our atmosphere by burning coal, but in the same breath we expect the lowest possible energy prices. In short, we are energy gluttons. So we are reluctant to do anything that might push up energy prices. Mountaintop removal and mercury posioning are just two of the consequences of our gluttony.

The energy industry might see the problem more clearly, and self-regulate, but unfortunately those companies need to maximize profits. So in the absence of government regulation, they are almost certain to keep on polluting, and producing energy in a way that leads to the lowest cost, thereby maximizing short-term profits. Since pollution measures do cost money--arguably at a small fraction of the overall costs of pollution to society--they are seen as counterproductive.

This leaves the task of pollution regulation to government, as a last recourse. If officials at the state and Federal level "serve at the pleasure" of politicians supported by contributions from coal producers, it's only logical that regulatory efforts will come under tremendous pressure.

In Bush's cabinet we've seen the appointment of industry lobbyists into leadership positions that oversee mine safety and other industries responsible for most of the country's pollution. Industry reps who had previously been pursuing the liberalization of pollution rules were suddenly responsible for regulatory oversight. As a result, numerous administrative rule changes made life easier for polluters. As a result of those lower standards, we've seen a marked increase in pollution and as a result of that, we will see more accidents, and more toxins in our air and water.

The regulatory pendulum has begun to swing back towards protecting the environment, but has come at great cost to the environment. While some places in Appalachia have seen the gruesome effects of dam breaks and more recently mountaintop removal, the effects of pollution can be felt far away. In our global economy, production practices in China can impact the personal safety of purchasers of Chinese-made goods. And in the ultimate example of its a small world, the use of greenhouse-depleting gases and CO2 are creating an Global Climate Change tsunami that may present the greatest challenge to the human race since the Ice Age.

So the water and enforcement of the laws matter, and not just to environmentalists. There've been two notorious mining accidents, one in West Virginia and the other in Utah; both events are preceeded by a string of safety violations.

The Bush Administration is responsible for federal oversight; it's no surprise we've seen such a marked decrease in federal regulatory oversight. Among Bushites and GOP stalwarts (and a large number of Reagan Democrats and neo-liberals) the perception abounds that environmental requirements dampen growth and hurt profits.

While no one may be intending to hurt the environment, such things just happen, the theory goes. And with these people, the environment is only important around where they live: all politics is local. Most people are insulated in their cocoons from the consequences of an inadequate regulatory environment.

Environmental inequity has become a hot topic. Studies consistently reveal that minority communities are disproportionally impacted by pollution. Thus when regulatory standards fall, they suffer more.

The consequences of Free Market capitalism likely impact someone downstream, someone quite likely not White, and hopefully not you. Eventually, though, we may all find the impact of man-made changes to the environment lapping at our door.

The legacy of environmental abuse should raise awareness about the need for environmental stewardship. But anti-environmental views are espoused in Right wing political circles, part of the myth that environmental destruction is a necessary part of economic progress. History would seem to show that the best interests of the society are compromised when powerful commercial interests escape regulatory oversight.

Deregulation and the Privatization pathway

The idea held by neolibs and business-firsters is that government is inherently inefficient--Milton Friedman--and services can be better performed by the private sector. The policy goal therefore becomes the conversion of government services into contracts with for-profit (and often private) companies. The idea is that by bringing in corporations, efficiencies will be wrung out of the traditionally inefficient government bureacuracy, through a process touted as the exercise of Free Market principles.

Privatization is deregulation's twin. Take one with the other. If shedding government is good in one area--regulation--the next logical step is to reduce government further, by the wholesale transfer of government responsibilities to the private sector.

This has been the driving mantra behind Reagan conservatism. While deregulation has seen a lot of success in some fields like airline travel, there are limits to self-regulation, which may or may not emerge when government regulations subside. Rhetorically though, deregulation has been a smashing success, as it gives neoliberal/Reagan democrats and the "pro-business" Republican Right an example of how they are putting their principles into action.

In reality though, we've seen private companies take the money and give very little back. The same forces that have been advocating privatization have benefitted from government-issued contracts, which have not by coincidence spiked alongside fiscal imprudence. And as the bottom line bloats with federal contracts, many of these companies tend to lose their competitive edge--the same efficiency on which their alleged superiority is based.

It's also not a coincidence that the mostly Republican business moguls who've benefitted the most from privatization have given the most money to the campaigns of pro-privatization politicians. Payback comes from the elected who pump their cronies with massive no-bid contracts, which are inadequately regulated in a system of crony capitalism.

One politician--our Vice President--actually owns some 2 million shares of one defense contractor which has moved to Dubai: Halliburton. No doubt the most influential Vice President in American history has used his influence to spike Halliburton revenues. Along with a spinoff (KBR) the company has received over $17 billion in military contracts from 2003-2006. (See the MSN report here.) Halliburton stock has tripled and the value of Cheney's holdings have grown dramatically as a result of the war that he so eagerly advocated.

Something like 40% of the Pentagon's budget now passes directly into the hands of contractors, passing the soldiers and veterans, where it is spent of programs that may only marginally impact the battlefields of Iraq, where the money is most definitely needed for upgraded Humvees, body armor, and the like. Star Wars-type missile defenses and aircraft and high-tech weapon development systems are good examples of questionable spending. If the contracts flow to some Republican party faithful, then the spending can be considered a success, regardless of the opportunity costs and consequences to our mainline fighting troops.

If only the American people would rise up and put forth just a fraction of their blind faith into following the money trail! Incumbents of both parties would be quickly revealed to be the scoundrels they are! Yet sadly ignorance is quite popular today, largely due to the over-stressed lives of so many, who have no time to follow the news. They lack the will to participate in the political process; surely if they knew the cost they will end up paying, they would demand accountability and transparency here and now.

Instead the sheople, as they are referred to, go on like lemmings over the cliff. I for one will be able to tell them that they were warned. After the lemmings disappear into the foaming seas below, I'll not bother to tell them the error of their ways, for they shall be dead at that point. Well, maybe not dead, but a heck of lot worse off, with higher taxes (to pay for the bulging deficit and its interest), higher prices (from inflation), inadequate governmental aid (look at Katrina) and with diminished legal rights, including the right of redress (to hold the government accountable).

The corporate, Mainstream Media has been blamed for much of the problem, but the responsibility to maintain our society and hold our government accountable ultimately falls to the people. They must participate (vote) and stay informed. The MSM has been an enabler of government indiscretions, even facilitating the spread of propaganda, but is not solely responsible.

Unsustainable Economics

States like West Virginia look at the environment as an infinite resource, and value the immediate economic benefits of jobs more than the long-term. negative environmental consequences associated with some kinds of jobs. Economic development and environmental exploitation are seen as two sides of the same coin; Nature is thought to provide economic opportunity in a zero-sum game, a trade-off of environmental good for economic advancement.

Long-term, this dichotomy simply doesn't work. As the environment degrades, it's inevitable a less developed economy will be able to rely on natural resource exploitation to attract economic developement.

Resources aren't infinite. Obviously procedures like mountaintop removal are unsustainable. Every mountain that is destroyed by mountaintop removal represents that much less of the natural available for future plunder. So even if you're a neoliberal or closet Nature-hater, the practice of mountaintop removal doesn't make sense from a long-term perspective: West Virginia will run out of mountains.

Apparently the industries that make billions from exploiting finite resources--and ignore the consequences--and leaving polluted and scarred environment behind. Highly stressed state and federal sources of funding are left for the clean-up, which in the case of the nations's many Superfund sites invariably prove to be more expensive and time-consuming to correct than whatever marginal benefit the pollution brings to the few who profit.

For those profitting, an extra dollar is pure profit, and if they aren't held responsible, the absence of ethics--enabled by the greed-is-good mantra enshrined in our covenant with the Gods of Money and Capitalism--allows the pollution to go on without shame. Those who profit from the pollution very rarely face and punitive consequences, so they often repeat their behaviors, going on to start anew once one area has been plundered.

Property Rights

I know the development-first argument well because I've lived in Indiana for the majority of my life. I fought sprawl in Indianapolis and have tried to improve the watershed where I live now. I'm no gladiator for the environmental movement but I've seen myself as an advocate of smart growth, which is the practice of limiting the speed of new construction, and forcing planning on all new construction where sprawl is a factor.

The idea of limiting growth is anti-property rights, which is an popular rallying cry against sprawl, combined with the attitude that all growth is good, no matter where it is, or what it is.

Now if I were sitting in a over-zoned, over-regulated, and over-taxed community, I'd probably advocate less government controls. I am, in my heart, a libertarian, but I can't stand by and let my town or city turn into a strip of ugly fast-food conglomerates and Big Box retailers that gut the urban core, all for the benefit of some faraway company paying slave wage jobs abroad. Better to build less, more slowly, than to sell out to the fast buck that comes, then inevitably wafts away when the sprawl growth goes on to consume some other perfectly good farmland on the periphery of the next town.

True libertarians might call me a traitor, but I don't believe one person's right to own property gives them a right to build whatever they want. I don't think government involvement in smart growth is evil, but rather is the direct responsibility of government where you have a capitalist system.

Letting private markets dictate that way a place grows or, worse, its environmental situation is a recipe for inadequate management of shared resources. While property owners have rights, the rights bestowed on the individual should never be allowed to eclipse the common good. Pollution is an excellent example of how one person's greed--exhibited through the desire to simply dump and not clean up toxins and other by-products of a commerical enterprise---contaminated the good.

Ownership rights should not allow a landowner to do whatever they please with their land. No resident should have to worry whether a neighbor will open a dump next door, or start a business collecting toxic pools of sludge. Yet many people in rural and developing areas have no zoning and are thus exposed to any manner of unregulated exploitation of the environment. The contagion effects could easily spread through the water, either on the surface or sub-surface as pollution works its way down into the watertable.

Indirect contamination contaminates vast areas well beyond the property owner's domain. We now see this with coal burning, which is the number one source of mercury in the atmosphere (source), along with greenhouse gases. Airborne mercury ends up settling into our streams, lakes, and rivers. Fish are contaminated as the neurotoxic mercury works its way up the food chain, where it presents a clear and present danger, especially for women and children.

The entire production cycle of coal appears to be doing massive damage to our environment, putting at risk the health of millions. With coal mining, the Clean Water Act has come under attack. Under pressure from the Bush Administration, the Office of Surface Mining is proposing a rule change that would eliminate the restriction on dumping with 100 feet of a waterway (obviously valley fill-in breaks that condition.) On coal's dirty-burning side, mercury emissions controls haven't been adequately enforced under the Clean Air Act.

Comparative Advantage

Odd how the free market system seem to produce more benefits for the population where it is controlled. States in the top of Forbes list have high education levels, higher incomes and savings rates, and better employment.

You could argue these standards of life show the benefit of environmental stewardship. Still, this argument can be undermined by Occam's Razor, a principle from physics that says just because one thing is proven does mean that another is true (explained better here.

Basically, the better environment is evidence of superior quality of life not a cause of it. States that have a better development pattern are less dependent on natural resource depletion or cultivation, occupations which are by their nature lower income and environmentally destructive (although an argument should be made that they could be less so, and therefore more sustainable.)

In other words, a more primitive state of economic development necessitates more resource depletion, and encourages destructive practices like mountaintop removal. In the minds of the people in West Virginia Department of Environmental Management--who have yet to deny a mountaintop permit--the diminished state of economic advancement becomes a rationale for more extreme and unsustainable practices.

Unfortunately, this willingness to lower standards dooms the state to attracting the lowest of the low, those companies that are fleeing more stringent environmental standards in other states. The fact the state is less developed keeps it from getting developed when those responsible for its "growth" choose unsustainable industries that damage the environment. The effect is made much worse when State officials view economic development and environmental stewardship as having an inverse relationship. Sure the environment's nice--the reasoning might go--but we need jobs and this company will bring them. Never mind that the new company might pollute, or end up degrading the state's attractiveness to tourists, hikers, and businesses who might be drawn to the recreational opportunities that abound in areas of natural and scenic beauty.

People drawn to environmentally attractive areas tend to be smarter, higher income, exactly the kind of people a state like West Virginia--or any on the bottom tier of the Forbes list--don't have and therefore need. Repel them by degrading the environment and you are essentially destroying your state's #1 asset: its environment. What nature lover could stand to live under the shrinking shadow of a removed mountaintop? I can't imagine anyone who enjoys nature living or wanting to go anywhere near these man-made abdominations. And that says nothing of the truck traffic and boom of explosives used to blast the mountain apart. (According to one environmental resource, over 4 million pounds of explosives are used on a daily basis in West Virginia, literally blowing the mountain to bits.)

Changes can take some time. But they are happening. Already over 100 Congresspeople have signed on to end mountaintop removal. But again, returning to libertarian principles, the mandate for federal action should be seen as the product of inadequate environmental protection at the state level. Like property owners, states shouldn't have the right to destroy their land or turn their natural heritage into a denuded and toxic legacy for future generations to deal with. Nature is an asset and should be managed. True selfishness is the notion that we are entitled to deny countless generations the natural beauty that we once enjoyed.

While I'm not one for federal control over land use decisions, if for whatever reason some states cannot protect and preserve their own resources, then the Feds will have to do it for them. This is the inevitable backlash that comes from inadequate regulatory oversight and selling out to polluters. We see this as our banks try to account for billions in write-offs on speculations in the housing market and exotic derivates hapahazardly packaged and sold, which now threaten to embroil the larger economy in chaos (see Whitney article.)

Internationally we see this effect as toxic industries operate in places beyond the reach of regulatory oversight. But this phenomena--the product of a new borderless economy--has brought new horrors to the toy shelves of America: date rape drugs encapsulated in plastic capsules, melanin-laced dog-food, and a list of unknown horrors waiting to be discovered by unsuspecting children and parents.

Surely the global economy can do better than allow a dumbing down of environmental standards and the proliferation of clearly unsustainable and dangerous production of toxic products. Maybe international political regulations will be necessary to contain this unrestricted greed. Maybe our trade with China need to be regulated in the same way that an errant state need supervision by the Feds. If the free market can't police itself, it will have to be policed, because these recent transgressions, and the ones to come, will show that it must be regulated.

Additional Resources

The State of California authorized a toy certification process that should help Californian children avoid some of the toxic ingredients in toys. Link) Europe has for a while now forbidden the use of dangerous plastics called pthalates. Meanwhile, belated regulatory efforts have begun in the U.S., as self-policing by manufacturers is simply failing to assure product safety standards, particularly among imports. It's only a matter of time before enough product recalls and child sickenings get Congress to act.

Daily Kos posted a good article by Patriot Daily News on mountaintop removal.

Ilovemountains.org has a link to write the Office of Surface Mining in regard to a proposed rule change. They explain:
"The current law requires that the impacts of mining be kept at least 100 feet from a stream. In August, the Bush Administration and the Office of Surface Mining (OSM) proposed a change to the law that would seriously weaken this stream protection."

Savethecleanairact.org has a factsheet on coal available here. They also have an automated letter-writing program set up so you can help stop mercury pollution. Don't stop there! Try to restrict your use of energy sourced from coal. Choose green power if your utility offers it.

Conservation is a unheralded message in the media today. Reducing demand for energy hurts short-term profits for energy companies. Longer-term, unrestrained demand will lead to shortages. Don't hold your breath waiting for action out of Washington though: Bush comes from the oil industry and many politicians are owned by Big Energy and higher prices have brought record profits.



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