Regulation big and small

USA Today interviews Whole Foods CEO John Mackey:

Q: What's the result of the Wild Oats merger?

A: The end result is that it's been great. Our Wild Oats same-store sales were up like 16% in the second quarter.

Q: Would you do that merger again?

A: No. We'll never do another merger that requires FTC approval. It was the worst experience of Whole Foods' corporate life. All my e-mails were examined by the FTC. The $30 million in legal fees. ... For what? To prove we weren't a monopoly? Everyone knows we're not.

Next check out the saga of one small business's run-in with the Occupational Health and Safety Administration (OSHA). Keep in mind that the business, which performs tuckpointing (masonry repair), consists entirely of the business owner, Gary Heffernan, and his nephew (via Walter Olson):

[Heffernan] said the [OSHA] inspector had written several citations. The first thing she told him was his scaffold wasn't level. He said he pulled out his level and put it on the scaffold to show that the scaffold was level. He said the inspector then wrote down the brand name of the level, as if there might be something wrong with his equipment.

"Truth is, you could have put a horse on that scaffold," Heffernan said.

He said he offered to let the inspector walk on the scaffold, but she declined and said she was afraid of heights.

The inspector told him his nephew needed a helmet and a safety harness.

"We have safety harnesses. If the job requires it, we wear them," Heffernan said. "But my nephew was only about 11 feet off the ground. I told the inspector I didn't know what I was supposed to attach the harness to. She told me I could rent a lift and run the main pole above the chimney and have the safety line from that hooked to my nephew. A lift costs about $750 a day. It made no sense."

Eventually, the inspector left. Three months later, in the middle of July, Heffernan received notice in the mail that he had been cited for three violations.

He had "not developed/implemented a Hazard Communication Program for employees engaged in tuckpoint operations using such products as, but not limited to, Portland Cement, Sand, Solomon Colors Concentrated Mortar, and Miracle Morta-LOK Type 'S' Masons Lime." Nor did he maintain an inventory list of these items. The fine was $1,050.

The second violation was that "employees were not protected by protective helmets while working in areas where there was a possible danger of head injury from impact, or from falling or flying objects, or from electrical shock and burns." That fine was $1,050.

Finally, the employees were "not protected by guardrail systems, safety net systems, or personal fall arrest system." That fine was $1,500.

Heff's Tuckpointing is a successful operation, but it cannot afford $3,600 in fines.

While the chattering classes in Washington argue over the affordability of extending the Bush tax cuts and furrow their brows in endless debate over what action should be taken by the Federal Reserve to boost the economy, left largely unremarked upon is the crushing burden exerted by government regulation upon the economy. Less visible than taxes, regulation nonetheless exerts a fearsome toll upon those who engage in productive activity and seek to move our economy ahead.

It is the height of insanity that Whole Foods had to pay $30 million in legal fees -- over $1,000 per employee assuming 100 employees at each of its 279 stores -- because of antitrust concerns. Anyone who has not spent their life dwelling in a cave is well aware of the many grocery offerings that this country has. I can think of at least 5 places within a 30 minute walk of my place where I can buy fresh fruit and vegetables. Mackey claims he would avoid a repeat of the merger if he had to do it over again, and who can blame him?

Then we have the ultimate small businessman -- literally a two person operation -- who is being fined thousands of dollars because of regulations that make no provision for the application of common sense (The story also notes that OSHA claims it investigated the business due to a tip -- it would not surprise me in the least if that tip were called in by a competitor looking to put them out of business).

Take these two examples, multiply them many times across the country, and one begins to have some appreciation for impact of the non-stop paperwork that is being churned out of Washington. My concern isn't about lazy government workers who spend their time idling away the hours, it's those who zealously go about throwing sand in the gears of the country's economy.