All economic enterprises have costs. When government regulations are cut back, private costs go down but those costs don’t go away. They often are unfairly shifted onto the public.
Last month, federal Judge Ronald Bush fined Atlanta Gold, a mine operator in western Idaho, $500,000 for violating the Clean Water Act by allowing arsenic waste to dump directly into Montezuma Creek, which feeds into the Boise River.
It is doubtful that anyone would voluntarily play in or drink arsenic-laced water, but that is the public cost paid by users of the Boise River.
The Idaho Conservation League first filed suit against Atlanta Gold in 2011, resulting in a $2 million fine in 2012. They haven’t paid it.
Meanwhile, leaky holding ponds have not been fixed. Atlanta Gold is saving the private cost of the fixing the ponds plus the fines; public costs continue to mount.
In a further irony, according to the Boise Weekly, Atlanta Gold is apparently waiting for the federal government to pay for the repairs. More private costs transferred onto the public.
Government regulation, such as the Clean Water Act or the Environment Protection Agency that enforces it, are meant to maintain a fair balance between public and private costs. Private companies and their owners profit but the public pays when that balance is upset.
Government agencies are starved through budget cuts. Regulation enforcement is disrupted or becomes impossible when experienced regulators and inspectors are driven out. The public’s elected representatives are prevented from oversight when cabinet vacancies are not formally approved.
All this is sold as making government more efficient. It is celebrated as getting government off the backs of American businesses.
In reality, disrupting government regulation puts a heavy thumb on the scales in favor of shifting costs onto the backs of the public.
Rollbacks in government oversight benefit economically shaky businesses who ignore safety or environmental or any other government standards. Their more responsible competitors who fulfill their legal obligations are put at a competitive disadvantage. Mostly, public costs skyrocket.
The legitimate role of government in a capitalist economy should be respected and supported. Being poisoned is a cost no one should have to pay.