Freedom Line Blog

Courtesy of the U.S. Census Bureau, we have yet another statistic to negatively distinguish Barack Obama and give form to his emerging legacy.  Yesterday, it reported that the percentage of adults aged 25 to 34 living with their parents rose again despite the economic “recovery” now into its fifth year.  In 2012, 13.6% of Americans in that age range lived with their parents, which was up from 13.4% in 2011.  That compares with approximately 10% throughout most of the previous decade.  So just as 2 million fewer Americans are working today than when the recession ended five months into Obama’s tenure in June 2009, more and more young adults consider it necessary to move in with Mom and Dad.  Not exactly the change for which young voters hoped in 2008.

Earlier this month, I noted that our economy continues to sputter at stalling speed, some four long years after the last recession officially ended:

The U.S. Commerce Department announced second-quarter gross domestic product (GDP) growth of just 1.7%.  That follows first-quarter 2013 growth of just 1.1%, and fourth-quarter 2012 growth of just 0.1%.  Together, that means our economy has grown less than 1% over the past nine months. That obviously provides additional confirmation that Obama’s economic agenda has failed, even as he barnstorms the country demanding more of the same.”  

Yesterday, Macroeconomic Advisers lowered its third-quarter GDP projection to just 1.8%, which would make four consecutive quarters below 2%.  The fourth quarter of 2012 came in at 0.1%, the first quarter of 2013 was 1.1% and growth for the recently-completed second quarter of 2013 was 1.7%.  That’s significant, because growth below 2% on a year-over-year basis has been followed by a recession some 70% of the time according to a Federal Reserve study.  Keep in mind that the average quarterly GDP growth since 1929 has been 3.3%.

Meanwhile, American workers’ wages continue to stagnate, according to the Labor Department.  Since the recession ended all the way back in June 2009, average hourly pay for non-supervisory employees outside of the government sector has declined 0.9%.  It’s one thing for wages to decline during a recession, but another thing entirely for them to fall during a supposed “recovery.”  Obviously, record trillion-dollar deficits aren’t the only unfortunate novelties of the Obama presidency.

In this fifth year of the worst economic recovery in our recorded history under Obama, the situation just isn’t improving like it should, or like it has in every previous recovery.  The latest manifestation of that fact came yesterday, when the Department of Labor announced that the unemployment rate rose in 28 states plus the District of Columbia last month, and only fell in 8 states.

As we noted earlier this month, 240,000 people dropped out of the labor force last month while only 160,000 jobs were created.  Moreover, today there are 2 million fewer Americans working than in 2008, even though our overall population has increased by 13 million during that period.  The last recession ended over four years ago in June 2009, which is more than enough time to conclusively demonstrate the failure of the Obama-Reid-Pelosi economic agenda of higher taxes, more regulation, wasteful spending and record deficits.

Climate alarmists like Barack Obama typically – but falsely – claim that their agenda rests upon “settled science.”  Of course, that doesn’t explain why they’ve shifted their rhetoric from “global warming” to “climate change” after temperatures flattened over the past two decades despite continual increases in worldwide carbon output.

In that vein, Marlo Lewis over at the Competitive Enterprise Institute made an interesting observation regarding a new paper entitled “Can Climate Models Explain the Recent Stagnation in Global Warming?” from German meteorologist Hans von Storch.  Out of 62 global average temperature projections from climate models used in an upcoming Intergovernmental Panel on Climate Change (IPCC) report, only 2% were as low or lower than the actual flat temperature trend over the past 15 years.

So the next time someone claims that anthropomorphic (man-caused) global warming is “settled science” among climatologists, calmly point out that only 2% of those within that herd of independent minds projected temperatures at or below the temperatures that actually occurred.

New York City Mayor Michael Bloomberg apparently doesn’t like it when others employ his own nanny-state tactics against him.  In his remarks yesterday after a federal court ruled the NYPD’s “Stop, Question and Frisk” policy unconstitutional, Bloomberg used some awfully sloppy and ironic language, considering his infamous habit of micromanaging citizens’ Second Amendment rights, their soft drink choices, their salt intake and so on:

“Let’s be clear.  People have a right to walk down the street without being targeted by police.  And we have a duty to uphold that right, which is why I’ve signed a law banning racial profiling, and it’s why the NYPD has intensified its training around Stop-Question-Frisk.

But people also have a right to walk down the street without being killed or mugged.  And for those rights to be protected, we have to give the members of our Police Department the tools they need to do their jobs without being micromanaged and second-guessed every day by a judge or a monitor.”

I certainly agree with Bloomberg that yesterday’s decision was incorrect, unwise and not supported by the applicable law or facts.  That said, it would be nice if he would practice what he suddenly preaches.  Hopefully, this moment will serve as a corrective for his own micromanagement inclination while the court decision itself heads down the road toward reversal.

Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CDT to 6:00 p.m. CDT (that’s 5:00 p.m. to 7:00 p.m. EDT) on Northwest Florida’s 1330 AM WEBY, as she hosts her radio show, “Your Turn: Meeting Nonsense with Commonsense.”  Today’s guest lineup includes:

4:00 CDT/5:00 pm EDT:  Tim Connors, Senior Manager in the Law Enforcement and Security Division of CAAS, LLC – National Security and Embassy Closings;

4:30 CDT/5:30 EDT:  Scott McEwen, Coauthor of the #! New York Times bestseller “American Sniper” – nonstop-action thriller, “Sniper Elite: One-Way Trip”;

5:00 CDT/6:00 pm EDT:  Lance Izumi, Koret Senior Fellow and Senior Director of Education Studies at the Pacific Research Institute – Unions and Schools; and

5:30 CDT/6:30 pm EDT:  Angela Logomasini, Senior Fellow at Competitive Enterprise Institute – Liberal Media Needlessly Scaring Women.

Listen live on the Internet here.   Call in to share your comments or ask questions of today’s guests at (850) 623-1330.

So here’s some interesting socio-political news.  A new study from one of the top business schools in the nation, Arizona State University’s W.P. Carey School of Business, contradicts the popular stereotype that conservatives are comparatively stodgy and unadventurous while liberals are open-minded and inclined to try new things.

According to the study to be released today, conservatives are actually more adventurous than liberals when it comes to product selection and real-world exercise of choice.  According to Naomi Mandel, one of the study’s authors, “Usually, when you think of conservatives, you think of people who like to have control over things or who are familiar and predictable.”  Those of us who actually are conservatives, of course, tend to know better.  After all, we’re the ones devoted to “free markets, free people,” as the saying goes.  By getting government off of people’s backs and allowing them to make their own individualized choices rather than comply with more of a government-dictated, one-size-fits-all model, societies can become more prosperous and happier, as the real-world evidence repeatedly confirms.

So liberals can continue expressing fealty toward choice-limiting institutions like ObamaCare or the Post Office.  Contrary to popular myth, we conservatives reply, “Vive le difference!”

We all recall former House Speaker Nancy Pelosi’s infamous instruction that Congress should pass ObamaCare so that we can all find out what’s in it.  Well, it turns out that Congress itself didn’t like what it found, and desperately worked to secure a free pass from the ObamaCare mandates to which other Americans are bound.  Like in George Orwell’s “Animal Farm,” some are apparently more equal than others despite the law’s statutory language that Congress and its staffers would be subject to the law that they passed.  As our old compatriot Quin Hillyer notes, that not only violates the law and all concepts of fairness, it also contravenes an important portion of the Contract with America:

For decades, Congress had exempted itself in myriad ways from laws or rules applying to the rest of the country.  The Contract vowed to change that – and on the very first day of the new Congress in 1995, it did.  Here was the language:  “First, require all laws that apply to the rest of the country also apply equally to the Congress.”  How simple.  How straightforward.  And how important!  And for the next 18½ years, until this past week – and despite frequent rumors to the contrary – that’s exactly what Congress did.  For all its faults, Congress actually abided by the Contract’s rule.  But now that’s gone. Now, via a ruling worked out between certain congressional leaders and the White House, federal subsidies for health insurance – of a sort available to no private-sector workers – will continue to be provided for congressmen and their staffs.  This sort of special exemption for government workers is not a merely symbolic annoyance; instead, it feeds a perception that soon becomes an attitude that soon makes itself manifest in various actions.  The perception is that government workers are above the law; the attitude that can grow among the federal workforce is that those workers are our masters rather than our servants; and the actions that flow from that attitude can include many abuses, small and large, of privacy or liberty.”

An important point, and one that Americans should raise as Congressional leaders head home for August recess and citizen townhall meetings.

In my column this week, I detail how U.S. economic growth has hit stalling speed.  Today’s jobs report from the Labor Department demonstrates that the same is true of the nation’s employment situation in the fifth year of Obama’s economic program.

Only 162,000 jobs were added in July, which was significantly below analysts’ expectation of 190,000.   Even worse, and putting that number in context, 240,000 people dropped out of the workforce last month, while the labor participation rate fell again to 63.4%.  That dropoff explains why the headline unemployment rate declined a bit to 7.4%, which is the number the Obama Administration and sympathetic media will highlight.  But that number only counts people who are actually looking for a job, so those hundreds of thousands who continue to drop out make the surface unemployment rate look better than it actually is.  Moreover, keep in mind that Obama promised at the outset of his administration in February 2009 that his economic policies and trillion-dollar spending “stimulus” would have the unemployment rate down to 5% by now.

The number of part-time workers also amounted to 174,000, showing once again that the approaching ObamaCare mandates are forcing employers to make those they do decide to hire part-time.  All in all, yet another lackluster Obama era jobs report.

All too often, cowed policymakers throughout the U.S. blindly accept the assertions and demands of environmental extremists as somehow representing mainstream opinion or scientific fact.  With the new LEED v4 standards approved earlier this month by the U.S. Green Building Council (USGBC) providing the latest example, it’s time for those policymakers to finally apply scrutiny to LEED and how it continues to negatively affect our domestic timber industry.

As we’ve documented before, LEED standards institutionalize a destructive bias against the vast majority of American timber, which receives certification by alternative systems.

Unfortunately, too many members of the public also associate LEED with “green” without serious thought.  But as we noted, LEED has the effect of raising the prices of timber, reducing consumer choices, threatening jobs and growth and favoring overseas competitors at the expense of domestic businesses.  The market gets distorted without yielding any corresponding environmental benefits.

Even though it has been “rebranded,” the folly of LEED remains its preferences for timber certified by the Forest Stewardship Council (FSC).  Its “leadership extraction practices” credit is only eligible for those using “wood products [that] must be certified by the Forest Stewardship Council or USGBC-approved equivalent.”  Builders that use FSC timber are more likely to enter LEED building projects than others.

The problem for our domestic timber industry is that 90% of FSC timber comes from abroad.  Policies that enforce LEED therefore increase the chances of foreign wood entering American building markets than would normally be the case under a true free-market in which FSC-certified products compete on a level playing field with Sustainable Forestry Initiative (SFI) and American Tree Farm System (ATFS)-certified materials.    The combined SFI and ATFS-certified forestland in the U.S. outnumbers that of FSC by millions of acres, so a pro-FSC framework automatically disadvantages a majority of Americans in the forest products industry in order to benefit a much smaller minority.

Moreover, the financial costs of this FSC-centric framework are considerable for American consumers, our broader economy, and the environment.  For example, FSC wood costs 15-20% more than other types of timber, according to numerous estimates.  The American Consumer Institute (ACI) estimated that making FSC-certification a binding requirement for American forests leads to $10 billion in annual consumer welfare losses for wood products.  Another recent study by EconoSTATS similarly determined that mandatory FSC standards would lead to 41,000 job losses in Oregon and Arkansas alone.  And in ecological terms, importing lumber from countries such as Brazil and Russia, where FSC is active, entails significant transportation costs.  FSC also enforces lower standards for certification in those countries, and many Asian and South American nations lack environmental safeguards that are taken for granted in the U.S.

In effect, the FSC framework displaces high-quality domestic lumber for foreign wood harvested under questionable circumstances.

While the U.S. Green Building Council (USGBC) ignored the input of hundreds of local, state and federal officials, conservationists, small and large businesses and academics who called for a revision to LEED’s treatment of domestic timber, a number of states are taking action on their own.  In the last few years, Maine, Georgia, Florida, Oregon, Alabama, Mississippi and Tennessee have taken steps to nullify or mitigate the negative effects of LEED.  Through legislation and executive orders, these states are opening up building markets to larger amounts of timber certified by credible standards like ATFS and SFI.

The more states that follow in their footsteps, the better.

Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CDT to 6:00 p.m. CDT (that’s 5:00 p.m. to 7:00 p.m. EDT) on Northwest Florida’s 1330 AM WEBY, as she hosts her radio show, “Your Turn: Meeting Nonsense with Commonsense.”  Today’s guest lineup includes:

4:00 CDT/5:00 pm EDT:  Bob Dorigo Jones, Senior Fellow for the Center for America – Wacky Warning Labels;

4:30 CDT/5:30 EDT:  Richard Miniter, bestselling author and columnist – American Media Institute and Investigative Journalism;

5:00 CDT/6:00 pm EDT:  Avik Roy, Senior Fellow at Manhattan Institute – Unworkable ObamaCare; and

5:30 CDT/6:30 pm EDT:  Timothy Lee, Senior Vice President at CFIF – Detroit vs. Houston.

Listen live on the Internet here.   Call in to share your comments or ask questions of today’s guests at (850) 623-1330.

I had the honor this week of participating in a panel on Capitol Hill hosted by The American Consumer Institute (ACI), whose speakers also included Rep. Marsha Blackburn (R – Tennessee), ACI’s Steve Pociask,Todd McCracken of the National Small Business Association, Sandra Aistars of the Copyright Alliance and Dr. Joseph Fuhr, Jr., Professor at Widener University and ACI Senior Fellow.  At that time, ACI unveiled its new public opinion survey showing overwhelming support for intellectual property (IP) rights and legal efforts to combat IP piracy.  Remarkably, in this era of political polarization, that support approaches 90%, so political leaders should pay attention.

Today, IP rights are under constant threat not only by way of theft and counterfeiting, but also by special interests here and abroad who seek to undermine IP protections.  For example, some of the nations with whom the U.S. is negotiating free trade agreements believe that IP should receive little, if any, legal protection.  Accordingly, for my part I emphasized that IP is precisely the basis on which the U.S. has evolved into the most prosperous, innovative nation in human history.  After all, many alternative legal systems exist providing less protection for IP.  Yet it is here in America, with its strong tradition of IP protection, where the overwhelming amount of innovation has occurred over the past two centuries.  That is not by accident, and it’s not coincidence.

Our IP system has delivered a higher standard of living and record of creation than any other system that the world has ever known.

But I also emphasized that IP protections aren’t just utilitarian in nature, as some seem to claim.  Rather, IP protections also reflect our view that the right to enjoy the fruits of one’s labor and efforts is a natural, unalienable one.  As stated by John Locke, “Our handiwork becomes our property because our hands – and the energy, consciousness, and control that fuel their labor – are our property.”  That right is at the core of American society itself.  The Constitution reads, “The Congress shall have the Power … [t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”  That reflects not only British common law, which is the basis for our own legal system, but also the Founding Fathers’ views.  In The Federalist No. 43, James Madison noted, “The copyright of authors has been solemnly adjudged, in Great Britain, to be a right of common law.”

Today, American IP is valued at approximately $5 trillion, which is greater than the gross domestic product (GDP) of any other nation in the world.  It also accounts for over half of American exports, which is critical at a time of increasing international competition.  Unfortunately, piracy of U.S. IP constitutes a multi-billion dollar threat, which steals our wealth and deprives our innovators the fruits of their labor.

With ACI’s new study, lawmakers can recognize where the American public overwhelmingly stands.  That data can prove critical in the ongoing battle to protect IP rights and increase legal protections to fight piracy both domestically and abroad.

In today’s Wall Street Journal, former Japanese Diet member Mieko Nakabayashi and former U.S. Deputy Assistant Secretary of the Treasury James Carter spell out in stark terms the need for reform and reduction of U.S. corporate taxes, which are now the highest in the industrialized world.  In particular, they highlight the alarming exodus of large corporations from America to more hospitable tax regimes with this statistic:

When the U.S. last cut its corporate tax rate in 1986, 218 of the world’s 500 largest corporations measured by revenue were in the U.S.  Today, that number is 137.  Similarly, the number of Japanese corporations in the Fortune Global 500 fell to 68 last year from 81 in 2005.  While there is no single explanation for the drop, Tax Foundation chief economist William McBride tells us:  ‘The common thread behind all of this is the U.S. corporate tax, which is the most punitive in the developed world.'”

We live in a period of unprecedented political polarization.  The need to reduce our corporate rate, however, has achieved bipartisan agreement, with Barack Obama himself proclaiming, “Our corporate tax rate is too high.”  Accordingly, the time is now to enact reduction and reform, lest America’s legacy of economic leadership deteriorate further.

Here’s something that might restore some of your faith in popular culture and the evolving American electorate.  According to a new Rasmussen survey, Obama’s Environmental Protection Agency (EPA) is less popular than the coal industry that it is trying to destroy:

Voters view the U.S. coal industry more favorably than the Environmental Protection Agency and are closely divided when asked if the Obama administration’s ultimate goal is to kill that industry.  Fifty-one percent (51%) of likely U.S. voters view the U.S. coal industry at least somewhat favorably.  The latest Rasmussen Reports national telephone survey shows that just 29% hold an unfavorable opinion of it.”

Along with Obama himself, it appears that his administrative agencies are paying a price for their continuing lawlessness.

Last week, the Federal Communications Commission (FCC) approved a pair of sequential purchases:  (1)  Sprint’s purchase of the remainder of Clearwire’s spectrum, and (2)  the Japanese company SoftBank’s purchase of Sprint.  So far, so good.

Here’s the problem.  Those interrelated transactions presented the FCC with a perfect opportunity to reform the so-called “spectrum screen,” a tool that measures spectrum available for wireless use in order to ensure competition in the wireless market.  Unfortunately, the FCC failed to make any reform whatsoever to that spectrum screen framework, which will only serve to create even more regulatory uncertainty and discourage critical wireless infrastructure investment.

The screen framework has been, and can continue to be, a useful tool for assessing competitive effects of spectrum.  But until that framework is brought up-to-date to reflect all spectrum available and useable for mobile wireless services, the tool remains outmoded and flawed, effectively artificially picking winners and losers.

With the FCC’s inaction last week, a 2008 decision (the last time the FCC visited the spectrum screen issue) continues to guide spectrum aggregation policy.  In that decision, the FCC chose to ignore the bulk of Clearwire’s 2.5 GHz spectrum, counting only 55.5 MHz of it toward the screen.  By not revisiting the spectrum screen when it green-lighted last week’s transactions, the FCC continued to discount a large portion of spectrum available for wireless use.  It’s difficult to understand their rationale.

Sprint continues to advocate for its own interests, insisting that only one-third of its Clearwire spectrum should be included in the spectrum screen.  Sprint bought the remainder of Clearwire’s spectrum to pave the way for the SoftBank deal, to leverage the value of Clearwire’s network and to optimize Clearwire’s spectrum.  So while the FCC chooses not to tally all of Clearwire’s available BRS/EBS spectrum, SoftBank gained rights to the 2.5 GHz band.   In contrast, when AT&T previously acquired WCS licenses at 2.3 GHz, the FCC found that the spectrum was usable for mobile wireless services and made changes to the screen.

Curiously, the FCC’s order last week maintained that the three-way deal was not the appropriate vehicle for reviewing the spectrum screen because, from the Commission’s point of view, no spectrum was being swapped.  SoftBank, however, owns no U.S. airwaves.  Moreover, the FCC had previously ascribed Clearwire’s spectrum to Sprint.  Thus, the FCC oddly seems to believe that such an exchange of spectrum is not a transfer.

The FCC’s position not to adjust the spectrum screen in the recent transfer of spectrum to a Japanese owned company is disturbing, especially given that it is currently considering imposing—on an ad hoc basis—a spectrum screen on America’s two largest domestic wireless companies in the upcoming spectrum auction.

The spectrum screen, used properly and applied in a competitively neutral manner, can be a useful tool to protect competition in the wireless marketplace.  But the FCC should stop trying to exploit it to pick “winners and losers” in the marketplace.  Instead, the FCC should update its existing screen to ensure that it incorporates all available spectrum suitable for mobile wireless services.  Only then will it provide the market with the business certainty necessary to advance further infrastructure investment and wireless innovation.

As a nation founded on the principle of limited government, we can head into this July 4 weekend grateful that principle remains in favor.  According to a Rasmussen poll released today, Americans prefer a government that is too limited to one that is too powerful by an overwhelming 3-to-1 margin:

More Americans than ever (63%) think a government that is too powerful is a bigger danger in the world today than one that is not powerful enough. A new Rasmussen Reports national telephone survey finds that just 21% disagree and think a government that is not powerful enough is a bigger danger. Seventeen percent (17%) are not sure.”

There is still hope in the world’s last, best hope.  Happy birthday, America.

Despite the federal government’s incessant attempts at expansionism, individual states continue to serve as invaluable laboratories of democracy.  That applies even in deep-blue Rhode Island, where new legislation helps ensure that emerging telecommunications technologies not already regulated will remain that way.  That assurance will encourage continued investment in wireless and broadband, which will in turn spur innovation and improve consumer service.

Entitled the Wireless Telephone Regulatory Modernization Act, the bill opens by noting that experience over “many years” has “established robust competition in the wireless communications market without unreasonable, industry-specific regulation as the best means of promoting universal service, economic efficiency, technological innovation, expanded consumer choice and empowerment, and investment in and development of advanced communications services.”  From that starting point, the bill:

–   Ensures that next-generation wireless services aren’t suffocated by bureaucratic regulations imposed with 20th century technology in mind, thereby encouraging experimentation and growth;

–   Encourages introduction of new products and services to enter the market and satisfy consumer demand for faster and more efficient performance by reducing the specter of uncertainty in regulation;  and

–   Preserves consumer trust that state and federal consumer protection authorities remain available to address actual concerns that may arise.

The bill summarizes, “Stating such policies in statute will provide additional certainty and continuity of this policy, and is necessary to attract new investment in wireless, broadband and other advanced networks, encourage technology deployment and promote the creation of new jobs in Rhode Island, while at the same time ensuring that consumers of wireless service continue to benefit from the consumer protection laws that apply to consumers generally.”

The telecommunications and broadband sectors remain a rare bright spot in our national and world economies, and legislation like this ensuring a “light touch” regulatory regime provides a welcome source of reassurance via our functioning laboratories of democracy.

Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CDT to 6:00 p.m. CDT (that’s 5:00 p.m. to 7:00 p.m. EDT) on Northwest Florida’s 1330 AM WEBY, as she hosts her radio show, “Your Turn: Meeting Nonsense with Commonsense.”  Today’s guest lineup includes:

4:00 CDT/5:00 pm EDT:  Megan Brown, Partner at Wiley Rein, Washington, D.C. – Supreme Court Roundup;

4:30 CDT/5:30 EDT:  William Yeatman, Assistant Director, Center for Energy and Environment – President Obama’s Climate Plan;

5:00 CDT/6:00 pm EDT:  James O’Keefe, Founder of Project Veritas: “Breakthrough – Our Guerrilla War to Expose Fraud and Save Democracy”;  and

5:30 CDT/6:30 pm EDT:  Tim Wyrosdick, Superintendent of Schools, Santa Rosa County – School Year End Update.

Listen live on the Internet here.   Call in to share your comments or ask questions of today’s guests at (850) 623-1330.

As full implementation of ObamaCare approaches, each passing day seems to bring new negative revelations about how it’s making employers reluctant to hire, it will increase the budget deficit, medical costs will rise, insurance options will decline, physicians will be driven from practice, and so on.  Today, Gallup released a survey suggesting another casualty:  Americans’ confidence in the medical system.  Gallup summarizes the results in its usual understated manner:

This year marks the ramp-up to the full implementation of the Affordable Care Act next January, and the resulting attention the ACA has received could be a factor in Americans’ lower levels of confidence in the U.S. medical system.”

Paraphrasing Nancy Pelosi, they passed the bill, and now Americans are finding out what’s in it.

Excessive regulation has come under increased scrutiny at all levels of government, and rightfully so.  Overregulation cuts into job growth and economic dynamism, sapping American vitality at a time when we simply cannot afford it.  As CFIF has highlighted numerous times, that is particularly true in the wood products industry.  Specifically, the manner in which bureaucratic building codes categorize lumber ends up excluding many domestic businesses from participating in critical government projects.

As one prominent example, every year, more and more cities needlessly make Leadership in Energy and Environmental Design (“LEED”) certification mandatory in their buildings.

The U.S. Green Building Council (USGBC) developed the LEED standards, which are in turn biased in favor of wood certified by something called the Forest Stewardship Council (FSC).  That disadvantages the majority of American businesses in the forest products industry by potentially blocking them from city, state and federal projects.  That’s because most domestic tree farmers, suppliers and retailers utilize wood recognized by the Sustainable Forestry Initiative (SFI) or the American Tree Farm System (ATFS) rather than the FSC.

In recent years, numerous elected officials have petitioned the USGBC, urging a more rational and inclusive approach to American timber.  Absent such a course correction, American wood products will remain unfairly excluded from public construction projects, as authorities give market access to timber used by a small minority of American businesses.  Such a framework decreases private sector revenues and jobs.

Now, new research by Forisk Consulting, prepared for EconoSTATS at George Mason University, provides further evidence of the economic costs that FSC imposes on American landowners and consumers.  Their study evaluated the way in which forest certification standards affect how timber management in the South and Pacific Northwest, comparing the impact of FSC, SFI and ATFS standards on land managers in Oregon and Arkansas.

The results were striking.  In Oregon, according to the study, statewide implementation of FSC could result in 31,000 job losses.  And in Arkansas, forcing land managers to abide by the FSC standard could reduce state timber employment by up to 10,000 jobs.

Those results should not come as a surprise, given the structure of FSC.

Although FSC certification is more costly than alternative certification standards, paying more for FSC does not guarantee that consumers are getting an environmentally superior product.  Among other things, FSC audits take weeks longer to complete than other certification programs, which diverts resources from land management for foresters.  FSC land restrictions also reduce the amount of timber harvested per acre, which lowers the supply of lumber and raises prices for consumers.  Furthermore, as Forisk Consulting has previously documented, FSC written standards don’t always correspond to what auditors enforce.  As a result, landowners are often confused.  As one auditor noted, “most companies are leaving clumps of unmerchantable trees in scattered areas, usually in riparian areas, draws and inaccessible corners.”

Thus, the accumulating empirical data shows the detrimental effects of making FSC certification a requirement for land management and building requirements.   As the number of LEED projects increases, so do the costs of the current forestry certification framework.

Fortunately, policymakers can neutralize that trend by treating ATFS, FSC and SFI wood equally, rather than mandating the use of FSC timber in our buildings.  That will give more American businesses access to new markets, and encourage a competitive certification process that will result in more landowners seeking certification.  Ultimately, that will benefit both the economy and the environment.