President Barack Obama is the brightest guy to be president since John F. Kennedy. He's well-educated and has the ability to inspire, but his presidency has slipped into the gray mists of fog, confusion, and drift. The stimulus probably averted economic disaster, but was too small to really jump-start the economy. The budget deal and the debt limit debacle could not have been played much worse. In recent days the White House staff couldn't even manage to schedule a jobs speech without messing up, and no one believes the president has the political capital needed to get a jobs program through Congress anyway. The economic crisis has become a crisis of confidence, made worse by a president whose every move seems governed by political calculation about the 2012 vote. As bad as all of that has been, I still hung on. I was convinced he could turn it around. That changed last week, when a misguided president and his equally misguided team of economic and political hacks threw the new air pollution rule under the bus. Now I give up. I will not stay home on election day, and I'm sure I will end up voting for him, but hope has turned into hopelessness.
The president and his second rate experts have given currency to the idea that pollution regulation is job-killing and bad for the economy: Shame on all of them. Since 1997 OMB has reported that the benefits of all federal regulations have far exceeded their costs. OMB submits a report each year to comply with the Regulatory-Right-to-Know Act. According to the draft 2011 report, the benefits of federal regulation totaled:
"...between $136 billion and $651 billion, while the estimated annual costs are in the aggregate between $44 billion and $62 billion. These ranges reflect uncertainty in the benefits and costs of each rule at the time that it was evaluated."
Last June, in her excellent summary of OMB's report, Katie Greenshaw of OMB Watch noted the prominence of air pollution rules in the federal regulatory analysis. According to that summary:
"The highest costs and benefits come from the U.S. Environmental Protection Agency's (EPA) air pollution rules. Specifically, the Clean Air Fine Particle Implementation Rule has the highest costs and benefits of any rule, with estimated annual costs of $7.3 billion and benefits ranging from $19 billion to $167 billion. The benefits, which far exceed the costs, include prevention of premature deaths, heart attacks, and respiratory illness among Americans."
Greenshaw further observed that:
"Although many House Republicans claim that regulations are too costly and negatively impact jobs, this report presents findings consistent with recent independent research from the Economic Policy Institute (EPI) concluding that the benefits of regulation greatly exceed the costs. The EPI research also indicates that "regulations do not tend to significantly impede job creation."
Issac Shapiro of the Economic Policy Institute, writing specifically of the new air pollution rules that the president and his "brain" trust just discarded, concluded that:
"... the dollar value of the benefits of the major rules finalized or proposed by the EPA so far during the Obama administration exceeds the rules' costs by an exceptionally wide margin. Health benefits in terms of lives saved and illnesses avoided will be enormous. Expressed in 2010 dollars:
• The combined annual benefits from all final rules exceed their costs by $32 billion to $142 billion a year. The benefit/cost ratio ranges from 4-to-1 to 22-to-1.
• The combined annual benefits from four proposed rules examined here exceed their costs by $160 billion to $440 billion a year. The benefit/cost ratio ranges from 12-to-1 to 32-to-1.
Shapiro also writes that the air rules impact only a "tiny sliver" of the overall American economy and so their impact on the rate of economic growth is likely to be small -- either positive or negative.
The problem is that the benefits measured by OMB come to all of us, but some of the costs come to the kind of people who donate money to our cash and carry political campaigns. Obama and his advisors have rejected the sustainability perspective on economic growth. The disgusting part of this turn of events is that they know better. They understand that a clean environment has many more economic benefits than costs. First, there are reduced expenditures for health care. Second, clean air has economic value that is difficult to quantify. Imagine you are a wealthy business person thinking about moving your business or your family. Are you going to move someplace where the air is orange and makes your kids sick? Third are the benefits of technological innovation undertaken to comply with regulation. In seeking to meet new standards, engineers are given the resources to develop engines that pollute less or air conditioners that use less electricity. All of these factors stimulate rather than stunt economic growth.
It's true that regulations are not cost free. Little of value in life is. It costs time and money when a driver stops at a red light. But the cost is lower than the cost of a road system without rules. Stopping is cheaper than crashing.
Killing the air rule was pure politics. But it was bad politics. I guess his political consultants hope that President Obama can neutralize his opposition by moving in their direction. The only problem is that instead of looking moderate, the president looks unprincipled. I may have no place better to bring my vote, but I have lost most of my motivation to support the president. While civic responsibility will bring me to the polls, many of the people who voted for President Obama in 2008 are going to sit on their hands and stay away from the voting booth in November 2012. By caving into the unthinking short-term interests of the most reactionary segment of the business community, the President managed to abandon his principles and disappoint his allies in the business and environmental community. I have a difficult time seeing the political benefit in adopting the position of people who will never support you.
The moment the president discarded EPA's carefully reasoned, scientifically sound air pollution regulations was the moment I abandoned hope. My guess is that I was not the only one to head toward the door.