Friday, December 17, 2010

The Fourth Branch

In school we all learned the basics of the U.S. government: three branches of government, Executive, Legislative and Judicial, checks & balances, etcetera etcetera. It’s a beautiful system that was designed to work for centuries by keeping any one branch from becoming too powerful, and allowing challenges to any branch that is abusing its authority.

But it seems that we have found a loophole that, in effect, has created a fourth branch of government, one with few, if any, checks or balances, and an ever-growing mountain of power.

I’m talking about the Regulatory Branch. This monstrosity includes the EPA, OSHA, the FCC, TSA, NLRB, and sixty-some-odd more agencies with far-reaching authority and little accountability.

Its agencies account for the vast majority of non-military government employment and budgets. Federal regulatory agencies employ well over a quarter-million people. That’s more than four times the number of people employed by the entire legislative and judicial branches combined. The total 2009 budget for federal regulatory agencies was $51.1 billion, dwarfing the budgets of the legislative and judicial branches, which were $4.7 billion and $6.6 billion, respectively. The EPA alone outpaced each of these, with a 2009 outlay of $8 billion.

In addition to being a monumental behemoth, the Regulatory Branch has an astonishing level of power. Not only does each individual regulatory agency have wide-sweeping authority, but a single rank-and-file employee can, with a simple pen-stroke, cripple or even shut down a business, and the business owner will have little recourse other than appealing to the very regulatory agency that is making the accusations against it.

If a regulatory inspector is having a bad day, is offended by something you’ve said, or just doesn’t like the color of your shirt, they can fine you thousands of dollars. They have to find a violation in order to fine you, of course, but with the mountains of complex, unclear and sometimes conflicting regulations churned out by these agencies, that’s not difficult. I doubt that there are any businesses--of any size--in existence today that couldn’t be found to have multiple regulatory violations.

The Code of Federal Regulations, which contains all the rules spewed out by the Regulatory Branch, was just shy of 80,000 pages in 2009. If you spent 12 hours a day every day reading this 50-volume tome, it would take you about 6 months to read it. It is the equivalent of about 60 copies of War and Peace.

In the eyes of Big Government, the Fourth Branch is beautiful. It has wide-sweeping abilities to create new and all-encompassing laws that have the crafty ability to get around the checks and balances that were established by our founding fathers. It generates significant revenue in the form of fines and fees, which go directly back into Big Government to help create even more layers of bureaucracy and gain more control.

But in my eyes, it is a giant loophole through which has marched an unwieldy, unaccountable and unconstitutional new branch of government, which is not elected and answers to no one.

Monday, December 6, 2010

Give 'em What They Want

When I worked in the restaurant industry, I came to learn the difference between a good server and a great one. A good server is attentive and quick to give the guest anything they ask for. A great server is intuitive and delves a little bit deeper to give the guest what they want.

That’s a key distinction. When I mention I’m on a diet and order a salad, a good server brings me the salad, with dressing on the side. But a great server suggests the chef’s specialty stir-fry instead, which has fewer calories than the salad but a lot more flavor. The great server figured out that I didn’t order the salad because that’s what I actually wanted, but because I didn’t know there were better options available.

I’m reminded of this often as I read news articles about public attitudes toward food and farming. A recent survey ('Ethical Eating' Goes Mainstream) showed that 69% of respondents were willing to pay more for “food that promises to be produced to higher ethical standards.” In fact, 12% were willing to pay a premium of more than 10% to choose these “ethical” foods.

According to the survey (more details here), 57% believe that a food product with a claim of “No trans fats” on the label is likely to be ethically produced. Around half the respondents believe that claims of “No supplemental hormones,” “No Antibiotics,” “Minimally processed,” and “GMO-free” are signs that a food product is ethically produced.

So as food producers, does that mean that we should switch to minimal processing, and forego GM products, trans-fats, antibiotics and hormones? After all, that’s what consumers are asking for, and we are in the business of producing a product for consumers. It’s perfectly reasonable for any forward-thinking businessman to ask himself, if we don’t give consumers what they are asking for, will we still be in business in a decade?

Or should we look a little deeper and try to figure out what the consumer truly wants?

In the survey that I mentioned earlier, well over half the respondents believed that “ethically produced food” is healthier, safer to eat, and better for the environment. And more than 9 in 10 said that, in order to qualify as an “ethical food,” that product had to avoid harming the environment, meet high safety and quality standards, and avoid the inhumane treatment of animals. Fair enough.

So when you boil it down to its core, what is it that consumers really want? Do they want GMO- and hormone-free foods? Or do they want food that is safe and healthy, and is produced in a way that is respectful of the humans, animals and earth that it touches?

It might be easier to forget this whole discussion and just get rid of hormones, slap a label on your product announcing the change, and voila! You’re ethical in the consumer’s mind. But is it the best option? Are GMO- and hormone-free foods really safer, healthier and better for the environment? How about antibiotic-free and minimally processed foods? Or cage-free animal products (also mentioned in the survey)?

More pointedly, if you are a producer, is the food that you personally produce safe, healthy, and produced in a way that is respectful of the humans, animals and earth that it touches? If it’s not, then maybe you have some work to do. But if it is, and I believe that most of the food produced in this country is, you also have work to do, but of a different sort.

See, giving consumers what they really want takes a lot more effort than just giving them what they’re asking for. It means that once you’ve figured out what it is that they actually want, you have to be able to provide it, and then you have to educate the consumer. It means that you have to explain to anyone who will listen how your practices ensure the health of the environment, and how you ensure the quality and safety of your products. It also means that if you find things to improve on (and there are always ways to improve), you work on improving.

But in the end, everyone benefits: the producers who are truly producing food ethically can continue to do so and keep improving; consumers can be content in the knowledge that they are not indirectly causing harm to their world; and the environment and livestock benefit when producers are implementing practices that are actually beneficial, rather than simply hopping on the latest consumer bandwagon that has minimal real impact (or worse, negative impact) on the health of the environment and livestock.