The social engineers: spending billions to prop up a bankrupt growth model

(Published at Counterpunch.com)  is a popular confusion that what is good for corporations is also good for the public.

They are called social engineers: that small group of corporate executives whose compensation has no correlation to the public interest, much less common shareholders or owners of mutual funds in pension plans.

One such public corporation, Lowe’s Home Improvement, succeeded this week in obtaining a majority vote of Miami-Dade county commissioners to move the Urban Development Boundary (UDB), overriding recommendations of its own planning staff, a report by the state planning agency charged with such matters in Florida, and a veto of Mayor Carlos Alvarez.

What a great victory for the neighborhood, claimed the special interests dedicated to buying more nails, glue guns, and particle board closer to the Everglades. “We can now move forward,” said the lobbyist for the project that had been turned down twice before.

But where are we moving forward to?

An example, before returning to the UDB, is in the corporate behavior of International Paper whose senior vice president, David Struhs, was formerly Jeb Bush’s loyal chief environmental officer.

While Secretary of FDEP, Struhs proposed to issue a permit and other regulatory authorizations sought by his future employer to allow 23.8 million gallons of industrial wastewater effluent from its Cantonment paper mill to be discharged into waters of the state, 11 Mile Creek. Friends of Perdido Bay sued.

In August 2007, after eleven days of testimony, a Florida administrative judge recommended denial of the permit application. FDEP chief Michael Sole, Stuhs’ successor, issued a press statement that while the Secretary “does not agree with all the Judge’s rulings,” he was nonetheless denying the permits. 

When the Florida Department of Environmental Protection issued a final order denying International Paper’s application, the corporation instantly appealed and submitted a new permit application; virtually the same as the one the court had rejected.

A stay pending appeal was immediately granted, allowing IP’s discharge to continue unabated. Friends of Perdido Bay filed a cross appeal challenging a portion of the state law that allows the state environmental agency to issue or renew an operating permit so long as “granting the operation permit will be in the public interest.” 

When the Friends’ attorney Marcy LaHart asked William Evans, Domestic Wastewater Permitting Supervisor with the Department’s Northwest District Office, how the determination was made that IP’s noncompliant discharge would be in the public interest, he answered: <span style=”font-weight:bold;”>DEP had basically considered “International Paper’s interest as public interest in our test.”</span>

Lowe’s and a second application to move the UDB in Miami-Dade were also repeat applications that had previously been rejected. The repeat was given energy by the entire spectrum of pro-development advocates who are down on their luck because of the real estate crash, but are nevertheless compensated, ultimately, by increase in unit volume of sales.

This corporate definition of public interest, growth based on incremental increase in unit volume, is a test that fails the public interest.

Supporters of Hold The Line, the campaign to stop the movement of the Urban Development Boundary, advocate another test: first, for MIami-Dade county to fund and implement all the unabsorbed costs of growth. Today some $6 billion in infrastructure improvements are hidden in backlogs by county departments. That does not even include the billions for wastewater cleansing as a component of state requirements.

Containing costs– to our quality of life, to our environment, to the public health– is what good planning principles intend to do and what Florida politicians routinely violate with bad zoning and permitting decisions.

Containing costs is also what corporations would do if their key executives were not compensated on the basis of externalizing as many costs as possible.

This is the International Paper story writ large. According to the Friends’ attorney LaHart, “IP has had literally decades to come into compliance. And DEP, rather than enforcing our environmental laws and fining IP for its pollution, instead grants more permits and waivers and variances with a few more years and then a few more years to come into compliance. Pollution control technology costs money, cutting production to stay within discharge limits costs money, why cut into profits when you can just get your consent order “administratively continued” for almost 20 years?”

What has happened to Perdido Bay is no different from the travesty in Florida Bay or the St. Lucie Estuary or the waters off Sanibel or, for that matter, Lake Okeechobee and the Everglades: what these degraded water bodies reflect is a form of social engineering defining the externalization of costs as that which benefits ordinary citizens. 

When citizens rise up in courts of law to claim that externalized costs must be responsibly and quickly addressed by corporations, they are slapped down: in this case, by the supposed party of fiscal conservatism– Republicans gone wild.

In the case of the Urban Development Boundary, it remains to be seen whether the Crist administration will defend growth management and, in doing so, skirmish on yet another front with remnants of the Bush crew of drunken sailors.

It is no wonder that citizens are exhausted coping with the strategies and manipulation of the public interest; a form of social engineering that leaves people struggling with two car payments, rising mortgage expenses, gas costs and no time to ponder how the fraud and manipulation extend straight through the ranks of politics and the law.

Friends’ attorney LaHart writes of their terrible fix and a familiar refrain to any citizen who has engaged to prevent government from violating its own laws: “This leaves my supposedly victorious clients with two options. Option number one, hope the same proposal will work, a ten mile pipeline to wetlands bordering Perdido Bay, even though they already defeated that proposal once when the Judge did not believe the wetlands could assimilate IP’s waste.  Option number two, lawyer up and hire experts and spend thousands of dollars to challenge the “new” permit all over again-whether the appeal in the First District Court of Appeals is successful or not. Even though we are the so called “prevailing party” in the previous permit challenge, for their efforts my clients appear to be no closer to their ultimate goal of clean water in Perdido Bay.”

In Miami-Dade, citizens will have to “lawyer up” too. Back in November, the county commission said it wanted to have the benefit of input from the state on the applications to move the Urban Development Boundary. Cynics who didn’t believe the commissioners were proven right when the state gave them the bad news and advised the county to stay within their own planning rules and guidelines and, then, county commissioners ignored the state and Mayor Carlos Alvarez.

Even if Miami’s citizens prevail and the will of the unreformable majority of county commissioners is rejected in court, it is hard to know who among the electorate will remember enough, or even whether results of the legal challenge would be heard early enough to influence the November elections.

On the political side, there should be a cost to the incumbents for what happened in Miami-Dade: they should be returned to the private sector where they can do less harm, buying International Paper products at existing Lowe’s stores.

On the economic side, I am afraid it will take an economic catastrophe, on the order of a Great Depression, to reign in the power of corporations to do their social engineering.

Marcy LaHart writes, “Last May while we were in the middle of the hearing regarding IP’s permit, IP issued a press release which announced it was closing its mill in Terre Haute, Indiana. According to IP, “The mill’s relatively small size and high manufacturing costs hindered its long-term competitiveness, and ultimately have led to our decision to close the mill.” Obviously, when it is in IP’s economic interest to close a mill, it does so. If IP can not operate the Cantonment mill profitably and in compliance with environmental regulations, that mill should be closed too.”

But IP can operate the Florida mill profitably, because the Florida legislature is deaf, dumb and blind to the fraud at the heart of the FDEP motto: “less process, more protection”.

This form of social engineering has very steep costs for the entire nation, misled as we have been by the advocates of “shrinking the size of government so that it can be drowned in a bathtub.”

Who wins, by the drowning? As long as the public interest is allowed, by politicians, to be defined as that which benefits corporations–and mainly the externalization of costs to be the integral feature of wealth creation for key executives– the security of the United States is in doubt.

We are not threatened by external terrorist threats so much as the kind of logic that prevails in such cases as International Paper where the State of Florida moved to dismiss Friends of Perdido based on their having supposedly won: “You cannot appeal a case that you won” FDEP’s attorney David Thulman argued.

For corporate interests seeking to move the UDB, integral to their plans for personal wealth is the delay, postponement and continued piling on of costs that will have to be paid, somewhere, at some time, by someone. That someone who would be the funder of last resort is you and me.

This is not some hypothetical claim. The Federal Reserve is hemorrhaging tens of billions of dollars to prop up a growth model that is bankrupt.

Except for an exceedingly small minority, Americans are poorer and less secure than even at the height of the Cold War. The sucking sound you hear is the accumulated wealth of a nation, our own, being drained. It is no wonder we feel our pockets are being picked clean. We are no match for the hidden costs of living we tolerate, meek as lambs.

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