What Creates the Cost, Mr. President?

During the State of the Union address last night, no one was surprised to hear President Trump brag about all the work his administration has done slashing regulatory safeguards for health, safety, the environment, and financial security. It’s clearly one of his proudest first-year accomplishments — making us all less safe and more vulnerable to industries that profit by polluting the air and water, creating unsafe working conditions, using underhanded financial practices, or selling dangerous products. The president thinks that regulations that curb such misbehavior are simply too costly to indulge and refuses to acknowledge their value in any way.

If you listen carefully when he makes that pitch, you’ll notice that he would have us believe that safeguards for health, safety, the environment, and financial security generate untold “costs” for industry. But as with so many things that are clear to Donald Trump but that simply are not true, the source of the costs involved in regulation isn’t the rule, it’s the harm the rule seeks to prevent — the polluted air or water, the on-the-job safety hazards, the foodborne pathogens, the SUVs that roll over too easily, the wallboard that emits toxic chemicals, and so on. Those hazards create costs in the form of medical bills, lost wages, hard-earned savings lost to financial scams, fouled waterways that require cleanup, spoiled ecosystems, and more. Those are the original sins in the regulatory equation, not the requirement that they be prevented or mitigated. Those costs will be paid by someone, one way or another. So the truth Donald Trump doesn’t acknowledge is that regulations determine who will pay those costs — the company that creates them, or the rest of us.

As an example, let’s say I decided to change the oil in my car but didn’t want to take the time to take the used oil to a gas station for proper disposal. Instead, I just dumped it along the curb and let it ooze slowly into the storm drain, and eventually into the creek near my house that flows into the Potomac River and then into the Chesapeake Bay. If I got caught – and I sure hope I would – I’m sure that among other things, I’d have to pay for the cleanup. Would anyone whose name isn’t Rand (Ayn or Paul, that is) say that the source of the costs was Big Brother creating an unnecessary cost for a homeowner? Wouldn’t most of us agree that I had created the cost by dumping used motor oil into a storm drain, and that cleaning it up was my obligation, not my neighbors’? And wouldn’t we also agree that it’d be better and cheaper if I just took the stuff to a service station or a county transfer station to begin with and had it disposed of properly? And perhaps that should be a requirement?

So why should a polluting industry be able to shift the cost of its emissions — whatever its motor oil equivalent is — to the rest of us? Why should it be able to foist the costs off on its neighbors just because it does it on a massive scale and makes a huge profit doing so? Shouldn’t the companies that create hazards have to prevent or mitigate them?

That’s what Donald Trump and his allies will never acknowledge. They’d have you believe that safeguards for the environment, health, workers, and consumers serve no purpose, and that all they do is create costs. They’re wrong on both counts. Regulation seeks to make the companies that create costs pay them by preventing them from shifting the costs and burdens of their shoddy practices to the rest of us.