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The World's Biggest Banana Republic


Location: Washington, DC

"They'd find the first five guys they saw, and they'd crucify them… That's our general philosophy." -- Al Armendariz, Region 6 Administrator, Environmental Protection Agency

This week, the EPA administrator for the south central U.S. resigned after the staff of Sen. Jim Inhofe (R-OK) discovered these quotes in a two year-old video. In a recorded presentation, Armendariz revealed that he saw the industries he once regulated as the enemy. His Roman crucifixion analogy was crude, and betrayed his biases against the industry that he was supposed to be regulating according to the law.

According to the Wall Street Journal, he lived out his words by taking aim at a Texas gas company. Despite warnings from the state environmental agency that there were no problems, Armendariz brought his hammer down on Range Resources. He leaked news of regulatory action to the media and activists before calling the state. More than a year later, Texas regulators unanimously sided with Range Resources and the EPA was forced to withdraw the complaint.

Because of his loose lips, Armendariz is gone from the EPA, but is probably a hero to activist friends. In all likelihood, he'll find a comfortable job with one of these groups. Meanwhile, Range Resources probably spent a substantial sum of money to defend themselves from his regulatory assault--money that could have been spent on creating jobs.

We need the EPA to protect our air and our water. We certainly don't want to go back to the days of acid rain and rivers that could light on fire. Congress passed laws to clean up our environment and implementing the law should not be arbitrary.

Perhaps the biggest challenge facing developing economies is fair implementation of the law. It is difficult for commerce to grow in places where the laws are constantly changing or subject to the interpretation of corrupt officials. Who would build a factory when you don't know whether the government will shut it down or take it over at a moments notice?

The United States economy was built on a strong foundation of law grounded in the Constitution. Businesses could safely make long-term investments because they could count on the fact that if they followed the rules, they would be able to keep their profits.
American businesses across the spectrum are increasingly facing regulatory, legal and legislative challenges to long-term planning.

The President's health care law will set the rules for every insurer in the United States. Most health policy experts agreed that the federal government needed to publish the minimum benefits regulations by the beginning of this year in order for insurance exchanges to be up and running by the 2014 deadline. Mainly for political reasons, these regulations won't come out until after the November election.

Medical device companies have been struggling through a Food and Drug Administration review process that can change whenever staff turns over. One Pennsylvania company spent years going down one regulatory path to have a brain scanning device approved, only to be told at the last minute that they needed to go through a different process. The same device was approved in Europe in 30 days.

When regulators begin to see themselves as activists, we are putting economic growth in peril. For years, the Sierra Club promoted natural gas as an alternative to coal. With a change in leadership, and the rapid growth of the gas industry, the group has changed its tune.

The "Beyond Coal" campaign was recently relabeled the "Beyond Gas" campaign. According to National Journal, there is no hard data that development of natural gas creates more carbon emissions than coal. However, activists are "worried" that it might. They are entitled to their worries and to change their campaign whenever they please.

The federal government has an obligation to behave differently. We have to act on facts. New regulations have to be proven both necessary and effective.

Individuals like Armendariz could turn the U.S. into the world's biggest banana republic. No matter the industry, we need predictable and fair regulations published on time. When politics and activism take over the government, business investment will find friendlier shores than the United States and we'll watch more jobs go overseas.

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