Thursday, March 15, 2012

The Regulated as The Regulator

Copper Falls, near Mellen, Wisconsin

Whenever the state's monthly job numbers come out, politicians in Wisconsin immediately jump on the news with press releases.  The news last Thursday was good, but the overall performance of the state's economy in 2011 was dismal.  So the Republicans' press releases extolled short-term results while arguing the proof of their reforms are finally kicking into gear, while the Democrats attacked the Governor and GOP legislators for putting us at the bottom of the barrel nationally in terms of growth.  Job growth has been so anemic that the state has fallen considerably short of the revenue projections on which the state's biennial budget was based, so now more Medicaid benefits for the poor are going to be cut.

I've remarked in the past on how much you can count on Senate Majority Leader Scott Fitzgerald's and Assembly Speaker Jeff Fitzgerald's press release to be among the sillier and typically most vitriolic of the bunch.  Instead of simply crowing about the great job numbers in January, Jeff Fitzgerald's press release on the January jobs numbers had to get in his dig over the mining bill:
“Today’s numbers are encouraging and show our reforms are continuing to take hold and are improving the economic climate in Wisconsin.
“However, any positive news on the jobless front this week is bittersweet as it comes just days after Democrats and Senator Dale Schultz blocked the mining bill from passing which would have created jobs for generations to come.”
If those "generational" jobs make good economic sense, they haven't disappeared.  Gogebic Taconite may be bluffing with their assertion that they are moving on and putting northern Wisconsin in the rear view mirror to lever a better deal from the legislature.  But even if they aren't, the iron ore hasn't disappeared.  It's still up in the hill near Mellen, Wisconsin, where it has waited for millenia.

Gogebic Taconite's secured an option for extracting the ore.  Whether its option is long term or short term, the ore will be mined by it or someone else in the future if it make good economic sense to do it.  And "good economic sense" must take in all the costs of the mine, those that the mining firm says they will assume, and those that will be left behind to be absorbed by the residents around Mellen and the taxpayers of Wisconsin.  Too many strip mining ventures have swooped into communities across the United States as small subsidiary companies of larger ones, responsible for clean-up, only to see them disappear from sight once the profit-making phase of the mining is done.  To get a feel for how this can work, read the first few chapters of Collapse by Jared Diamond, dealing with the degradation of Montana's environment from poorly regulated mining.

Gogebic Taconite went away in a huff because the Democratic party and one brave Republican senator, Dale Schultz, decided it might not be in the best interest of the state to have Gogebic Taconite draft the regulations that would regulate the siting and operation of their own mine.  It seems like it should be self evident that this is not a good thing when it comes to mining, but apparently not to Republicans.

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