If your mental image of a "federal regulator" is a $50,000-per-year deputy assistant undersecretary who totes a fancy briefcase down to the Federal Triangle every day and sits behind a big desk shuffling papers, you ought to meet Judy Griffin.
Judy Griffin, federal regulator, is a diminutive mother of three grown children who totes her son's old Boy Scout knapsack to her place of work - on the roof of a city fire station here -- and earns about $25 a week enforcing the Clean Air Act Amendments of 1977.
Griffin is paid to operate a simple machine that sucks in measured quantities of Appleton's air and tests for pollutants. The regulations say these tests must be made in a secure place a certain height above the ground; Griffin complies by doing her work on the roof of a fire station.
Four or five times each week, Griffin drives her muddy, bashed-in '73 Gremlin down to the station. She straps on the tattered knapsack, climbs a dizzying spiral staircase high above the gleaming fire trucks, squirms through a cubbyhole to an outdoor ledge and carefully ascends a 12-foot ladder to the roof. "I get $3.75 an hour, see, that's government -- you always get more than the minimum wage," she says.
Judy Griffin is a very small part of a very big industry -- and a conumdrum for economists.
The economists know that the industry that helps people and businesses comply with regulations, and helps government enforce them, is a multibillion-dollar segment of American enterprise. A report in the Harvard Business Review recently said that Griffin's branch of the trade -- environmental regulation -- is a $50-billion-a-year industry, and environmental controls are just one facet of the broad governmental network of economic and social regulation.
But the economists cannot determine whether the billions flowing to the regulation industry should be considered a cost or a benefit to the economy as a whole.
The econometricians who calculate the Gross National Product, for example, include Griffin's pay and the value of the machinery she uses in their totals. But the GNP figures assign no value to Griffin's "product" -- cleaner air over Appleton.
Appleton's residents see things somewhat differently. Despite the city's generally conservative political complexion -- Ronald Reagan won more than 60 percent of the local vote last November -- people here tend to see regulation as a considerable econonomic plus. The people who breathe air that has been cleaned up through regulation, or drink milk that is inspected by government regulators, or contribute to pensions that are safeguarded by federal rules, will tell you that these "products" of the regulation industry are worth something.
For the most part, though, the economists in Washington planning Reagan's approach to federal regulation see the industry as an economic negative -- a costly drain of money and manpower that could be used for other purposes.
"When people talk about the money earned because of regulation," says James Miller, director of Reagan's Regulatory Relief Task Force, "that's a cost to society, that's not a benefit. This means that resources are going into that when they could go into productive operations. By definition, that's a cost."
The administration's experts even say they know how great the cost is.
"Adding to our troubles," the president told Congress in February, "is a mass of regulations . . . that is estimated to add $100 billion to the price of things we buy."
The president got that $100 billion estimate, the White House says, from Murray Weidenbaum, the chairman of his Council of Economic Advisers. Weidenbaum says he got the figure by extrapolating from the combined annual budgets of federal regulatory agencies.
This is all standard procedure for Washington, where political issues are frequently translated into dollar amounts, and where the amounts quoted are frequently derived from some federal statistic or other.
But do these Washington numbers have any validity on the other side of the Potomac? At the receiving end of federal regulation -- at a place like Appleton -- is there any substantiation for the Reagan/Weidenbaum cost estimate?
In a word, no. The president's figure may or may not be accurate, but you can't prove it by people here who live with federal regulation every working day. If Reagan's economic thinkers came to Appleton to measure the regulatory burden, they would find that individuals and businesses have no clear idea how much regulation costs -- or how much it saves, a figure the administration has not tried to estimate.
This is partly because government regulation is such a basic fact of life today that people don't think much about what would happen if it went away. And it is partly because people and businesses cannot determine what economists call the "incremental" cost of regulation -- what they do to assuage the government that they would not do anyway for business advantage, for public relations or just for the sake of good citizenship.
Reagan has frequently quoted business complaints about the cost of complying with the Occupational Safety and Health Administration. Sure enough, if the president were to talk to Don Utschig, president of a $20-million-per-year construction firm here, he would hear a flood of OSHA complaints. The agency, Utschig says, is "a modern Gestapo."
But Utschig goes on to say that just about everything he does to meet OSHA requirements he probably would do anyway -- because of pressure from the private sector. "We've got to have safe conditions because insurance companies make you," he says. "They write you up and . . . if you haven't met [safety] standards, it costs you money to be naughty. If the insurance rate goes up, that's an enormous impact on the per-hour labor cost when you're bidding a job."
Ty Stefl, manager of the Morning Glory dairy plant here, is one of the rare people in Appleton who sees government regulators every day. State and federal inspectors are constantly coming by to check the milk that comes into the plant, the machinery that processes it and the powered milk and soft ice cream that comes out. How much does it cost to comply with all their rules?
"See, it's not something I ever think about," Stefl says. "Regulation is just part of the business. And you need it. If I'm going to sell my [ice cream] mix -- see, your Dairy Queen, your McDonald's, well, they have their specs, their standards. So what we do to meet the government regulations, we have to do the same -- more really -- to sell to McDonald's."
In that speech to Congress in February, Reagan noted that part of the burden imposed by regulations was the "seven million man and woman hours of work by state and local officials . . . required to fill out government forms."
Some of those woman-hours are worked by Viona Klemp, who gets out the weekly payroll for Appleton's municipal employes. "Why, I have never thought about it," she said recently when asked how much time she spends completing government forms. "I suppose it would be about a third of my time. . . . Some of these forms, oooh, they take forever to do.
"Now here's the one that's worst of all," Klemp said, digging through her files to find the offending document. "Yes, here it is, the Municipal Yearbook form. This is the one I really dread. I would say, if you add up the hours, it takes a week each year. Once I finish it, I just about copy all the other ones from the information I put on the yearbook form."
Which federal agency puts out this most-dreaded form? None at all, as it turns out. The form Klemp really hates -- the one she uses as a stencil for all the other forms she completes -- is an annual questionnaire sent her by the International City Management Association, a private professional organization for local government executives.
In Washington, the regulation industry -- the lawyers, lobbyists, accountants and newsletter publishers whose offices line K Street NW and tower over Rosslyn -- is a well-known part of the local economy. But this industry extends past the Potomac to every city in the country, including Appleton, a compact city of 60,000 about 100 miles northwest of Milwaukee. Even here there are several hundred people who make their livelihood from federal regulations.
The local arm of the regulation industry deals mainly in services.
Because of the independent audits required under the federal student loan program, Lawrence University buys hundreds of hours worth of audit services each year from Schumaker, Romenesko, the accounting firm on Lyndale Street.
When barber Arnie Thomas discovered he needed a federal permit to put a garden in his backyard, he spend several hundred dollars for the services of Rick Stadelman, the lawyer who helped fill out the necessary forms.
When small local hotels around the country apply for federal funds to convert to senior citizens' homes, their owners get technical advice from John Conway, who converted Appleton's Conway Hotel in 1975 and then set up a consulting service to help others do the same.
The Appleton branch of this far-flung industry also includes the 17 inspectors at the OSHA area office here and a couple of hundred other government employes who check everything from the freezer temperature at meat-packing plants to the qualifications of brokers at the securities firms on College Avenue. And it includes people like Judy Griffin, who works part time testing air quality as a sub-sub-contractor to the Environmental Protection Agency.
The regulation industry's products include an enormous range of hardware, large and small, and this machinery is on the job all over Appleton.
The Clean Air Act that Griffin enforces is responsible for the multimillion-dollar custom-built emission-control systems at the big paper mills here, as well as for the $760 glorified vacuum cleaner produced by General Metal Works Inc. of Cleves, Ohio, that collects Griffin's air samples.
The government regulates how many minutes of commercials a radio station can broadcast each hour, so Gates Radio of Quincy, Ill., sells Appleton's broadcasters its DP-1 system to keep track of all those minutes.
The government decrees the point at which milk should freeze (to make sure the fluid has not been watered down), so Precision Systems Inc. of Sudbury, Mass., sells dairies here a "cryoscope" -- a high-speed refrigerator that freezes milk and then takes its temperature.
The government dictates airlines' antihijacking precautions, so Infinetics Inc. of Wilmington, Del., has sold Air Wisconsin at $18,000 "Friskem 500" radar machine for the boarding gate at Outagamie County Airport.
"The rising tide of regulation," Weidenbaum has written, "has become a major barrier to productive economic activity."
The people here who make their living from regulatory activity see the matter somewhat differently.
"My job is basically human service," Judy Griffin said during a recent interview on the rooftop where she works. "My husband and I are both into human services in a really big way. I have done some work with handicapped kids. . . . This is pretty much the same thing, you know, trying to make people's lives better.
"If people in Washington don't think [pollution control] is productive, I mean, they should have been here 10 years ago with all these paper plants around here. Even now, sometimes, I'm up here, and I look out and see a smokestack blowing off, and I say 'God, that looks like a violation right there.' And what would happen to the air here if there was no EPA to pick that up?"