January 12, 2004 PR Week by Paul Holmes

Industry's friends in Washington present these numbers as if they were hard facts, often with the support of organized labor's friends on the other side of the political aisle. The costs of the regulations are balanced against the benefits, and the regulations are defeated.

That's what happened to proposals that would have improved the system for testing American cattle for mad cow disease. The proposals were hardly radical - they would have left US testing procedures far less stringent than those in Europe or Japan. But they were too radical for the nation's beef producers and for the US Department of Agriculture, both of which made the familiar argument that the regulations would be too onerous for American farmers, and would end up raising costs for the poor old American consumer. ('We're not fighting this regulation out of greed or self-interest; we're fighting it out of sympathy for the average consumer.')

But a few days after the disease was discovered in Washington state, the USDA reversed its position. The measures it had lobbied to defeat would be adopted, and miraculously, there would be little or no cost to the consumer. Apparently, some miracle had occurred that reduced the cost of these regulations from prohibitive to virtually nil.

Or for those who'd prefer an explanation without a miracle, the beef industry had been exaggerating the true cost of the regulations, and its allies had been pretending to believe those exaggerations - until it became too costly, in political terms, to keep up that pretense.

Recent business history is replete with cases in which industry fought tooth and nail against environmental regulations, whining about their potential cost, only to find that they actually saved money once the regulations were implemented, by becoming more efficient. And in the case of the beef industry, there's no doubt that accepting tighter regulations would have saved money: The industry could have put all the cash it spent on lobbying and public affairs to better use, and it would have avoided billions of dollars in lost exports - and diminished public trust.

In the meantime, the American public - and the media in particular - will surely grow more and more skeptical of corporate studies purporting to show the high cost of regulation, reinforcing the old adage that there are lies, damned lies, and statistics.