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Toxic Environmental Regulations Poison the Job Market

The media continue to report dismal economic news, raising the specter that our teetering economy may fall back into a “double-dip recession.” Continuing high unemployment is the biggest worry for most Americans. The percentage of working-age people in the labor force last month fell to 64.7 percent–the lowest figure in a quarter century.

Great Depression Unemployment Line.JPG

You would think that the administration’s top priority, then, would be to foster a pro-investment, pro-hiring business atmosphere. You’d certainly not expect them to pursue policies that could push any impending recovery, fragile at best, over the “tipping point” and down into another economic chasm.

That, however, appears to be just what they’re doing.

The administration’s entire agenda–from “stimulus” spending, to government-run healthcare, to takeovers of financial institutions, to higher taxes–has spread paralyzing uncertainty throughout the investment community. But that hasn’t caused them even to slow down, let alone change course.

Consider three job-killing measures imposed by this administration in a single area: environmental regulation.

1. The drilling moratorium. In response to the BP oil spill in the Gulf of Mexico, the environmentalists heading the Interior Department imposed a six-month ban on all deepwater drilling in the Gulf last May, “while safety regulations are updated.” According to the New York Times, “The action has put hundreds of people who operate and service deepwater wells out of work and brought long-term uncertainty to the Gulf Coast economy. Politicians all along the coast have called the moratorium a case of federal overkill that threatens the livelihood of the region.”

Indeed; an analogy might be to shutting down all driving in Colorado for six months after a single major traffic accident in Denver.

Though a federal judge struck down the administration’s ruling, saying it had failed to justify “a blanket, generic, indeed punitive, moratorium” on deepwater drilling, work on the wells has not resumed, pending Interior Department appeals. And even if the administration loses its appeals, they plan to impose yet another moratorium. Meanwhile, oil rig workers have joined the swollen ranks of the unemployed.

2. Carbon dioxide restrictions. In June, the Senate rejected efforts to limit EPA authority to restrict greenhouse-gas emissions. Even some Democrats from coal-and-gas-producing states joined with major trade associations to oppose the Obama EPA, on grounds that its draconian restrictions on carbon-based energy sources would crush the economic recovery and jeopardize millions of jobs.

And though the nonpartisan Congressional Budget Office had warned in May that carbon taxes and restrictions would cost jobs, lower wages, and “reduce the productivity of the economy,” that prospect hasn’t deterred the environmentalists setting administration energy policy.

3. The war on agro-chemicals. I’ve previously reported on the EPA’s renewed assault on agro-chemicals, including the crucial weed-killer atrazine, here and here. In those articles, I focused on the dire consequences to our food supply and health if environmentalist bureaucrats ban this safe, vital agro-chemical.

Now comes an important new study showing that such a ban also would lead to tens of thousands of job losses, especially in the farm sector of our ailing economy.

On July 7, University of Chicago economist Don L. Coursey appeared at the National Press Club and in a media teleconference to announce his findings. Dr. Coursey–a respected researcher who has worked for three decades with the EPA, foreign governments, nonprofits, and corporations–told us that “the economics are clear. The ban on atrazine at the national level would have a devastating–devastating–effect upon the U.S. corn economy.”

Drawing upon the EPA’s own prior studies, Coursey found that replacing atrazine would cost farmers between $26 and $58 per acre–meaning “the total loss to corn farmers from a national ban on atrazine would be between $2.3 billion and $5.0 billion per year.” Losses of that magnitude “will erase between 21,000 and 48,000 jobs related to or dependent on corn production, with additional job losses coming from both sugar cane and sorghum production losses.”

If all the job losses were concentrated in the agriculture sector, Dr. Coursey said, farm unemployment would grow by as much as 2.6 percent–rising from the current high 12 percent rate to a whopping 14.6 percent. And if all those job losses were concentrated in the area of corn farming, its current unemployment rate of 11 percent would soar into the catastrophic range of 30 percent. “A good ninety to ninety-five percent of the impact in the corn sector would be felt by small, rural, family farms,” he added.

Such economic losses would be in addition to many other harms noted in my previous articles. These include threats to food crops, higher food prices, and the resulting dietary impacts, especially among the poor. Ironically, there would be environmental harm as well. For example, atrazine is an invaluable aid to “conservation tillage,” which permits far less plowing–thus resulting in less agricultural runoff into streams and drinking water.

“Corn is a very important crop to the world economy,” Dr. Coursey concluded in his teleconference. “A ban on atrazine in corn production in the United States would be devastating to farmers, and devastating to the communities in which they live. The last thing we need is to ban something that’s a safe product, and that will cause more people to lose jobs in our economy, given current conditions.” If the Obama EPA bans atrazine, it would express “wanton indifference to our need for economic recovery.”

The Depression-era levels of unemployment that Professor Coursey forecast for the corn sector could soon ripple out through the entire economy of the Midwest, where families and communities are still reeling from the economic downturn. They, like the rest of our nation, wonder how many self-inflicted blows like this our economy can take before it collapses into another recession–a second “dip” that could be much deeper and longer lasting than the first.

That happened once before, when toxic economic policies poisoned the forces of economic recovery and pushed the crisis of 1929 into a decade-long Great Depression.

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