* * May we please stop vilifying government regulations?

Recently, Curtis Whitt stopped by to see me in my office in the industrial shell building I own. It was not a social call; he’s the Christiansburg Fire Marshall, making his annual inspection.

There are regulations in place that dictate fire safety at public buildings and it’s Curtis’ job to ensure enforcement. He looks at flammable materials and walkways. He checks to see if fire extinguishers are properly labeled and charged and whether fire suppression systems are adequately maintained. He looks to see that “Exit” signs are properly lit.

So we walked the facility together, he making his report about required remedies. It’s always a hassle for me, as invariably something needs fixing. And it costs me twice, first in his salary that I pay in town taxes and second in the time and money to fix things.

It helps that Curtis is a nice man with a pleasant demeanor and a good sense of humor. And he’s never punitive. He never mentions fines and always allows me ample time to fix things.

It would be easy to become upset by this “intrusion” into my private company. Instead, I recognize that while perhaps we’ll never have a fire at night where someone needs a lit “Exit” sign, it is in my tenant’s interest, and by extension my own, that people are safe.

There’s a constant theme I hear over and over again about “burdensome government regulations,” and the impediment to commerce and industry they represent. I fail to see it. To paraphrase James Madison, “If corporations were angels, no government would be necessary.” They’re not.

Not every regulation seems to make sense under every circumstance, but from my experience, when government looks the other way, either by not passing relevant regulations or by not enforcing existing regulations, eventually there is significant damage. For example,

• The financial crisis of 2008 was largely caused by de-regulation of the financial industry. Corporate lenders engaged in hedge fund trading, collateralized debt obligations, credit default swaps, and other risky financial “instruments” that most of us, and frankly most of them, didn’t understand.
• The Deepwater Horizon spill in the Gulf of Mexico in 2010 was the result of many shortcuts taken by BP and their contractors. They used crappy piping and cement. The operators and regulators failed to do adequate monitoring of the pressure building up in the pipe. The disaster could have easily been prevented.
• The Upper Big Branch Mine disaster, also in 2010, was caused by flagrant safety violations by the company that owned it and lack of effective enforcement by regulators.

In the former instance, millions of people lost their savings and their homes. In the latter, people died and pollution was widespread.

Before any meaningful government regulation, the damage was worse. For example, back in the early 1930’s, the Union Carbide company (which, I might add, has got to be considered the worst corporate citizen the world has ever known), oversaw the construction of a water diversion tunnel near Charleston, West Virginia, where hundreds of workers were sickened with silicosis, the inflammation and scarring of the lungs, due to silicone in the rock. Fatalities are estimated between 500 and 1000; the company was so insensitive that although they knew about the problem did nothing to solve it and indeed refused to even account for the dead.

Overseas, there have been even worse disasters. A leak of toxic gas on the night of December 2, 1984 at a factory run by Union Carbide (remember them?) in India is responsible for as many as 10,000 deaths and a half-million injuries. There have been lingering conspiracy theories about sabotage, but it is undisputed that both the company and its regulators were lax in enforcing safety requirements. Union Carbide and its affiliates paid hundreds of millions in fines and restitution.

This highlights the major points of this essay: there has never, EVER been an instance of environmental or human health degradation that wasn’t ultimately easier to prevent than to remediate. And that prevention can only be obtained through meaningful, stringently applied regulation. Corporations have never and will never effectively self-regulate.

And what’s more, when a company pollutes, it privatizes the profits and socializes the risks. For example, a company might save $10 million by not installing proper filtration systems before dumping in the river, where people downstream may incur $100 million in healthcare costs related to increased pollution related diseases. Any company that can’t afford to protect its workers and the environment has no right to exist.

With that fact, our governments have imposed regulations that keep our air and water clean, and our food, drugs and workplaces safe. Why do we continue to demonize them?

I suppose there are, or could be, regulations that are strictly punitive, that exist for no other reason than to punish and inhibit our corporations. But I don’t know of any. I believe that every regulation we face, at least initially, had sound reasoning behind it.

Curtis’ visits may be a hassle, but ultimately I know his actions will result in a safer, healthier community. Let’s please always appreciate that.