WASHINGTON, D.C. — The news that the Environmental Protection
Agency prevented early clean-up of floating oil in the Gulf by refusing
to waive its “clean water” limit of 15 parts per million
should make us all focus on the job killing structure in Washington,
D.C. Just three days after the BP spill, the Dutch government offered
their oil-skimming ships and ocean oil-cleansing technology, but were
rejected because the cleaned ocean water would not reach the EPA’s
limits of being 99.9985 percent pure. Imagine if even half the oil
had been skimmed off; the rest probably would not have even reached
shore because oil degrades quickly in warm ocean water. But because
oil did reach the shore, Washington ordered a moratorium on all deep
water drilling over 500 feet in the Gulf, and a moratorium on all offshore
drilling in Alaska and off the Atlantic and Pacific coasts. In Louisiana,
the order is causing an estimated loss
of tens of thousands of jobs and billions of dollars of oil production over the next two years.
Blue-collar jobs on Gulf oil rigs earn an average of $60,000 per year.
An economic crisis with high unemployment is the best time to confront
and even possibly reform Washington’s job-killing laws. Most
Americans are either uninformed about the quantity and consequences
of these laws or they regard them as normal. So now is the time to
recognize, enumerate, and challenge the worst of them. But to reform
bad laws, first you need to get them debated in public.
All too often we hear that cheap Chinese labor is wrecking havoc with
our industries. In reality, it is a host of costly, job-killing burdens
from Washington that are responsible. How many investments and job
creations are not made because of compliance costs associated with
excessively strict regulations (and the lawsuits they generate)? It’s
no wonder that our great achievements nowadays are in fields such as
electronics, movies, and games, where entrepreneurs and innovators
face less government obstructions, lawsuits, and labor costs. Compare
this to an investor trying to build new factories or mines.
For example, in a remote area
of Alaska, efforts to start up one of
the world’s richest copper and gold mines is stymied by unending
Kafkaesque regulations and lawsuits. In Utah, Interior Secretary Ken
cancelled 77 previously issued oil/gas leases because
the smell produced by the drilling might affect air
quality in the
desert near national parks. New mining ventures today have mostly moved
to Canada to avoid such unnecessary hassles.
Another prime example is nuclear electric power, which could be cheap
and abundant. China is building 60 new nuclear plants over the next
10 years, while in Washington it takes 10 years to build even a single
plant. Both the Chinese and the French build them in a bit over 3 years.
President Barack Obama said he favored such plants and proposed billions
of dollars in subsidies, but he made no mention of the obstructive
permitting process that makes nuclear power so uneconomical. Remember
also that nuclear energy plants are an established technology. Why
does each plant have to go through such a bureaucratic rigmarole?
The EPA’s extremism and vicious fines and penalties are a primary
reason why America is falling behind much of the world. Yet we hear
complaints from the usual suspects that the only jobs America produces
are service ones. The consequence of that view is growing trade protectionism,
since we blame foreigners for “unfair” competition. This
causes even more job losses: Witness the inability of Congress to ratify
new trade agreements with Korea and Colombia.
Government created jobs appear to cost an average $200,000 each according
to various studies. Many are for non-economic, artificially-created
jobs such as those in alternative energy, which is extraordinarily
expensive. Washington does all that it can to obfuscate the costs of
its subsidies and tax favors.
Fortunately we still have breakthroughs, such as with the new discovery
of horizontal oil drilling and rock fracturing. America has such dynamism
that economic growth still occurs despite the government’s many
efforts to hinder it.
Herewith is a list of immediate ways to create more jobs.
• Review EPA limits to identify and modify excessive and job-destroying
regulations. As the oil cleansing limits discussed above indicate,
many EPA restrictions are not based on realistic threats, but rather
seem based upon the limits of its measuring abilities. They are often
irrational and punitive and do nothing to secure health, safety, or
• Revise depreciation schedules. American real estate companies,
for example, must depreciate new roofs or new boilers over 27 years.
Lowering that rate to 5 years would instigate enormous new activity
for the building trades, providing tens or hundredsof thousands of
sold blue-collar jobs.
• Reform the public sector. Billions in state funds could be directed
towards hiring and construction if the money wasn’t committed
to exorbitant pension and health benefit packages for public sector
workers. Possible solutions include court challenges, firings, sub-contracting,
and laws preventing public sector unions from going on strike. Louisiana
and New Jersey are leading the way.
• Stop fighting endless foreign wars. Just think if the trillion
dollars spent on Iraq had been used to rebuild our infrastructure.
China, for example, is using its money to build massive new highways
and high-speed rail between every major city. Meanwhile, it costs us
bullets for each dead guerrilla, half a million dollars to
place each soldier (and his back-up) overseas, and $45
per gallon of fuel landed in Afghanistan. Little of this spending creates jobs in
• Stop passing vague laws. The new bank
reform act, for instance,
is expected to make small business loans harder to get and put new
burdens on small banks. Among other restrictions, it requires bankers
to verify that a loan is “suitable” for a given customer.
That sort of vague language will inspire lawsuits, which in turn will
result in the banks denying future loans.
• Make cheap electricity accessible. Government regulations (and
regulation-inspired lawsuits) now prohibit or delay the building of
new coal-generated plants as well as nuclear plants. Freeing up access
to this cheap electricity would allow firms to prosper and hire more
• Lift the ban on deep water offshore drilling. Tens if not hundreds
of thousands of blue-collar jobs are in peril—or are simply not
initiated—because of investors’ fears of arbitrary government
regulations. Real estate magnate Steve Wynn relates his dealings with
• Reform health care by promoting price competition and curtailing
spurious lawsuits. Wasteful and expensive health care is a tremendous
burden on American business, pushing up labor costs beyond the rates
of even Western Europe, where withholding taxes include health insurance.
It used to cost General Motors 8,000 dollars per worker for health
insurance, compared to $800 in Canada. Reforms, blocked in many states,
include Minute Clinics and Wal-Mart’s similar program where skilled
nurses—backed-up by databases and by doctors on call—see
patients for about $69 and dispense $4 generic medicines. This cuts
out the money wasted on unnecessary tests and operations. These simple
reforms would promote competition and save billions in health insurance
• Stop subsidizing Ethanol, solar, and wind power. The billions
wasted here could be used for real investments to expand America’s
economy and re-build our decaying infrastructure.
The above are just a few ways in which millions of new jobs could be
created. Sparking debate on these issues is the way to create real
jobs, reduce government deficits, and bring prosperity back to America.
Jon Basil Utley archives
A version of this article appeared at Reason.com.
Jon Basil Utley is associate publisher of The
American Conservative. He was a foreign correspondent for Knight Ridder newspapers and former
associate editor of The Times of the Americas. For 17 years, he was
a commentator for the Voice of America. In the 1980s, he owned and
operated a small oil drilling partnership in Pennsylvania.