Jonathan Small | October 14, 2016
Free Market Friday: A simple truth
Next time you go grocery shopping, take a hard look at that can of green beans. Say the shelf price is $1. Part of the cost represents the beans themselves, part the canning and shipping costs. But there’s a hidden cost as well – the cost of federal regulation. How much is it?
According to a study by the Small Business Administration, federal regulations drain from $1.75 trillion to $2.02 trillion from our economy each year.
Worst of all, those costly regulations are often imposed directly by federal bureaucrats, sometimes on a whim. For example, a U.S. Senate committee chaired by our own Sen. James Lankford recently examined storage and handling regulations imposed by the Occupational Safety and Health Administration on something as simple as fertilizer.
Farmers use anhydrous ammonia fertilizer to add nitrogen to the soil and help those green beans, and many other products, grow. There are some common-sense rules for handling and storing anhydrous ammonia fertilizer, but that wasn’t good enough for OSHA. They added a pile of new regulations and then claimed it would only cost dealers and shippers an average of $2,160 per facility.
Not so, said Lankford and one of his colleagues, Democrat Sen. Heidi Heitkamp of North Dakota. The real cost of OSHA’s action was between $25,000 and $50,000 per facility. Of course, that would significantly increase the cost of that fertilizer, which would increase what the farmer has to pay to grow his crops, which would increase – you guessed it – the price of your can of green beans at the cash register.
Jonathan Small, C.P.A., serves as President and joined the staff in December of 2010. Previously, Jonathan served as a budget analyst for the Oklahoma Office of State Finance, as a fiscal policy analyst and research analyst for the Oklahoma House of Representatives, and as director of government affairs for the Oklahoma Insurance Department. Small’s work includes co-authoring “Economics 101” with Dr. Arthur Laffer and Dr. Wayne Winegarden, and his policy expertise has been referenced by The Oklahoman, the Tulsa World, National Review, the L.A. Times, The Hill, the Wall Street Journal and the Huffington Post. His weekly column “Free Market Friday” is published by the Journal Record and syndicated in 27 markets. A recipient of the American Legislative Exchange Council’s prestigious Private Sector Member of the Year award, Small is nationally recognized for his work to promote free markets, limited government and innovative public policy reforms. Jonathan holds a B.A. in Accounting from the University of Central Oklahoma and is a Certified Public Accountant.