GBS BUSINESS CONFIDENCE RAV

LINKRUN (1~
GROUP THE LINK DEBATE:
ENVIRONMENTAL COSTS ARE WRECKING HAVOC ON BUSINESS OWNERS AS COMPLIANCE COSTS
RANGING ANYWHERE FROM THE COST OF UPKEEP TO FORCED MODERNIZATION DIVERT CAPITAL
BETTER SUITED TO GROWTH AND INNOVATION-AS PROFESSOR POLLACK NOTES, ULTIMATELY, THE:,
COSTS OF ENVIRONMENTAL COMPLIANCE CONSTITUTE A SIGNIFICANT FINANCIAL COST FOR
VIRTUALLY EVERY SECTOR OF THE ECONOMY.

AND1WELL WIN A CASE BASED LINK:

[x]

MOREOVER, WELL SMOKE THEM ON SPECIFIC SCENARIOS:

(1). PRODUCTIVITY:
(A). AN ECONOMIC ANALYSIS CORRELATES ENVIRONMENTAL REGULATIONS WITH AN
OVERWHELMING COST UPON PRODUCTIVITY.

annum, flot

., (B). PRODUCTIVITY IS THE BEST INDICATOR TO ECONOMIC GROWTH.

MILWAUKEE JOURNAL SENTINEL 2002 (9-20)

Eroductivity is the sinQle most important economic indicator, the main mark and auger of all we valueJn the material worl~

It's more significant than the gross domestic product. Bigger than the unemployment rate. More portentous, indeed, than
the wrinkles on Mr. Greenspan's forefiead. -

High productivity is the reason -- the only reason -- most Americans drive cars and sleep one or tvvo to a bedroom instead
of living in mud hovels. ~iled productivity growth is why the Soviet Union colla(;Jsed. -- -

Productivity improvements are the closest thing in economics to a free lunch. They make all the other,indicators charted by
the COmmerce Department and Labor Department ,- easier to achieve. -
Because of increases in productivity, employees can~t paid more without working longer. Waqes rise without
causing inflation. Government spending can go up without tax Increases.

Productivity gains can let the economy grow without adding population. They nurture the sustainable development loved by
liberals and the robust GDP growth valued by conservatives -- at the same time!

Alan Greenspan said the word "productivity" 30 times this summer in two days of testimony on Capitol Hill, an obsession
that underlines the subject's uncertain course and high stakes; there is considerable worry and debate about where
productivity is headed next.

First, let's understand the term. Labor productivity -- which is what economists usually mean when they use the word -- is
the value of goods and services produced per worker. .

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[FROM ABOVE]

The more productive you are, the more your work is worth. You and a Third World goatherd both put in eight or 10 hours,
and he probably sweats more. But your daily diligence generates products worth maybe a couple hundred dollars, while
his yields only a few cents of added value.

The only difference: productivity. Your place in a technologically advanced society run by good governments and well-
managed companies makes the fruits of your toil far more valuable than those of most of your global counterparts.

And because you are such a productive little beaver, your employer is willing to pay you much more, too, than what the
guy with the goat gets. That's the beauty. Although productivity advances often involve layoffs as corporations squeeze
more work from fewer people, in the long run most people end up winners.

Few dispute that productivity gains generated much or most of the economic progress of the past decade. The recent
stock market downdraft and revelations of corporate fraud cast doubt on the bona fides of the 1990s boom. But when the
smoke clears, an impressive pile of economic progress should still be evident.

One sign of our prosperity is that the highest monthly unemployment rate during the recent slump --6% -- isn't far above
the lowest rate -- 5% -- during the 1980s expansion. Technology is key to productivity, and by many accounts computers
were at the center of the gains in output per worker last decade, enabling warehouses to adjust supply more quickly into
line with demand, banks to serve more customers with each employee and so forth.

Average annual productivity gains of 2.1 % over the past 10 years were still below the 2.8% average gains in the 1950s and
1960s, when the interstate highway system and GI Bill-educated workers supercharged national output. But they were far
better than the 1.65% pace from 1970 to 1990. .

Will the gains continue? Some, thinking the computer-induced economic jolt will fade, don't think so. Northwestern
University's Robert Gordon believes that U.S. productivity increases for the 1990s were overstated. Morgan Stanley's
Stephen Roach fears that strong productivity results in recent months won't be sustainable.

Hope they're wrong. By some calculations, a 0.5% increase in productivity over the next decade will produce an extra $1
trillion in federal tax revenue, as levies from higher personal incomes and corporate profits flood the Internal Revenue
Service tills. The result: Bye-bye, big budget deficits and Social Security crisis.

Oh, and one other thing about productivity -- it stokes corporate profits as well as worker wages.

(2). INVESTMENT:
(A). REGULATIONS DRIVE OUT BUSINESS INVESTMENT.

BENIDICKSON, DOERN, AND OLEWILER 1994

(Jamie, G. Bruce, and Nancy, Gettinq the Green Liqht: Environmental Requlation and Investment in Canada, pg. 2)

\ Thus, the developer 01 mvestment policy has an underlying

concern about the loss of investment because of environmental
factors. Some introductory observations are, however, worth mak-
'\
ing. First, an established concern's decision on environmental grounds
not to expand an existing operation is not the same as a decision to
leave the jurisdiction or to establish additional facilities in the same
industry elsewhere. Similarly, a foreign investor's decision on envi-
ronmental grounds not to enter a particular sector in a given juris-
diction need not be the same as a decision to undertake the same
activity elsewhere. In general, one should be cautious about assum-
ing that, when investment in a particular sector or activity is "lost,"
it is actually lost to some competing jurisdiction. In fact, the environ-
mental regime may simply serve to redirect investment from one sector
to another in the same jurisdiction, to defer or delay investment in
anticipation of remedial innovations in process or technology, or per-
haps even to signal that no otherwise suitable jurisdiction is pre-
pared to accept certain forms of environmental risk and degradation.
--'-

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(B).LOSSOF FOREIGNINVESTMENTRESULTSIN GLOBALRECESSION.

MAKIN, RESIDENT SCHOLAR - AMERICAN ENTERPRISE INSTITUTE, 2000
(John, Financial Times, Sept 13, In)
It is true that if the US's external borrowing needs suddenly went unsatisfied, the global economy would experience a kind
of Asian crisis in reverse. A weaker dollar, mirrored by a sharply rising euro, yen and other currencies, would mean that the
US, the world's engine of growth, would start to export deflation instead of importing deflation and allowing sharply weaker
foreign currencies to support global export growth and reflation, as it did after the onset of the 1997-98 Asian crisis. Worse,
a sharply weaker dollar could force the Fed to raise interest rates, thereby exacerbating the global slowdown. It is al~o true
that no-one can predict where the dollar exchange rate will go in the future. Its level, along with the size of the US current
account deficit, is determined by thousands of investors around the world deciding where to invest and where to buy and
sell goods,

(3). PERCEPTION:
.. UNCERTAINTY OVER FUTURE GOVERNMENT ACTIONS CRUSHES CONFIDENCE.

GRAY, DEPT ECONOMICS - CLARK UNIVERSITY, 1993

(Wayne, Natl Bureau of Economic Research, Working Paper Series, No. 4321, pg. 4)

Regulations may also increase the uncertainty faced by firms, affecting their
decisions in a variety of ways. Vis cum (1983) discusses the role of uncerta'
~bout future requlations (and hence about the future pro lta l l Y of the firms)
fs reducing a firm's investment, or at least is postponing the investment until
the uncertainty is resolved. Hberger, Beamer, and Hascoe' (1983) point out that
new product development could 'De attected by uncertaint about fuEure
e a lons 0 new pro uc s. Deve 0 ment of new production processes could also
------
be In ere by uncertainty about future regulations, as current regu~
requlrements are generally designed with existing production processes in minq.
blue-chip average now is up only 1.8% since the year began."

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BUSINESSCONFIDENCEIL

e (). BUSINESS CONFIDENCE HAS A SNOWBALL EFFECT-A DECLINE IN ONE SECTOR ENDS UP
RECESSING THE ENTIRE MARKET.

SAN DIEGO UNION TRIBUNE 2001 (4-20)

The great dan]er of any economic slowdown is that it feeds on itself. We already see signs of this in the United States.
Weaker consumer spending and business Investment hurt corporate profits, depressing stock prices and confidence,
wnich then harm consumer spending ana bUSineSSInvestment. -
The same thing can happen on a global scale. When things go bad, countries that were muddling along, despite huge
problems, discover that they can no longer cope. Their budget, debt or trade troubles worsen!-and the fallout s~jp
other countries through lower imports or loan defaU1'fS:

The potential for a chain reaction is why Argentina matters. It could trigger the next global financial crisis. Since late 1998 it
has endured a stubborn recession. Unemployment is up from 13 percent to 15 percent, says the International Monetary
Fund (IMF).

( ). CAPITAL INVESTMENT IS VITAL FOR ANY ECONOMY TO GROW.

HEYE 1993
(Christopher, Politics and Society, Vol. 21 No.2, June, pg. 169)

Because it regulates the rate of capital accumulation and the pace of employment
growth, the level of business confidence has far-reaching consequences for
economic and political activity. Few, if any, economic activities have more
substantial social consequences than capital investment. For any economy to ,
grow, resources must be withheld from current consumption and invested in new
production facilities in order to provide for the consumption opportunities of
tomorrow. Investment expenditures eventually benefit all members of society,
producing profits for managers investing in new capital gods as well as
employment opportunities for workers required to operate them. Investment
outlays also substantially influence the pace of long-run economic growth, the
rate of labor productivity, and the ability of firms and nations to compete in
the global market-place. In short, sustaining high levels of capital
accumulation is critical for any society seeking to improve its overall standard
of living.

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BUSINESS CONFIDENCE: A2: CONSUMER CONFIDENCE ~
~ ( ). LAGGING CONSUMER SPENDING HAS PUT BUSINESS CONFIDENCE AT THE CENTER OF FURTHER
ECONOMIC GROWTH.

BOSTON, MEMBER - BLACK ENTERPRISE BOARD OF ECONOMICS, 2003

(Thomas, Black Enterprise, Jan, In)
Trying to jump-start the economy by reducing interest rates even further is like pushing on a string. Despite the fact that th§,
~ederal Reserve has lowered the federal funds rate to 1.75%, its lowest level in 40 years, 1he Index'of Leading Ss-°nomic
Lndlcat~ ttne measure used to gauge the future health of the economy) has declined for four consecutive months. Why is
the economy so anemic? One major reason is declining consumer and buSiness confidence.

Think of it this way: Suppose you decide to make a major purchase, such as a house or automobile. If the price has been
determined, two additional factors are likely to figure prominently in your decision to make the purchase. The first factor is
the interest rate, which is nothing more than the cost of borrowing money. The second factor is how confident you are
about your future earnings. For example, if you are concerned about job security, you are not likely to make the purchase,
no matter how low interest rates might be. The same logic holds for business owners deciding whether to undertake a new
investment. While interest rates are important because they affect the total return on capital invested, if business owners
are pessimistic about future economic activity, even low interest rates will not be attractive enough to make them invest.

Over the r business owners have been more wary than consumers, so investments h ve I .g.eQ. Fortunately,
consumer spending has carried the economy forwar -- even t oug consumers are facing record levels of debt. ~
""mas changed over the last three months. The growing number of job losses has caused consumers to become
cautious. As a result, if the economy is to improve, investment must pick ul!.:l!ut low interest rates alone will not get th(;!job
done. Rather, the key index t9 watch is business confidence..

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Biz Con
(Q
(-) Predictability is the lynch pin for sustaining business confidence
UNIVERSAL NEWS SERVICES 1993 [11-15, page lexis]
"Predictabilitv is the mother of confidence, and we want government to provide a
steady, qrowinq economic environment in which we can develop our businesses with
that confidence," the CBr conference in Harrogate was told today (Monday) by Clive
Thompson, chairman of the SE Region and group chief executive of the Rentokil
Group.

He added: "We in the CBr are no longer on the outside looking in - we're right on
the inside. But being on the inside demands we express our views responsibly and
completely. It is insufficient to put the business view in isolation without thouqht or
concern for the requirements of the other parts of the economy.

"We cannot ignore the demands of health, education, social services and transport
on the public purse. Clearly, tax revenue directed towards business means less
resources for other important requirements in the economy. Recognition brings
responsibility. "

He went on to advocate government focusing on creating an environment in which

business could create success.

"We don't want radical chanqes of policy and direction much loved by politicians.
Peaks and troughs have done more to wipe out the confidence so necessary for
investment in research and development, speculative new proiects, and investment in
plant and machinery than any misguided political dogma.

"Businessmen invest in their businesses and take risks in new ventures if they
believe they will be working in a business friendly environment. Confidence is the
key, and for those who have to invest in the future, predictability is the mother of
that confidence."

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PRODUCTIVITY:A2: NOTHRESHOLD

( ). THE INTERNAL LINK THRESHOLD IS SMALL:

ANY RISK OF PRODUCTIVITY LOSS TRIGGERS THE IMPACT.

CROSS,PROFBUSINESSREGULATION- TEXAS,1995
(Frank,EcologyLawQuarterly,pg. 758)
This adverse affect on productivity is important because productivity plays such~
a large role in economic growth. ProdUCtIVIty grow~rmakes a big difference to
'fFie-wel~yf th~~popu~~:.::..:... "1ii§.:t2£~_~~._2:_~.~~~<::!.::.=!.~~~-~=-~~.._~ a:l:~.=..r:"!age
porn~~g
~ .-. '~"-"". growth for one century was sufficient to transform
in productivity -- the
Unlted Kingdom from the world's undis~uted industrial leader into the third-rate
~conomy-tJlill~ i.t~...tQd.ay~Thus, the indir~t~'ff~;:t of regul~tionon----
produ~ivity growth is substantial.
-

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SMALLBUSINESSIL

II ( ). SMALLBUSINESSCONSTITUTESA LARGEPARTOFTHE US ECONOMY.

HERRING, CHAIRMAN - NATL SMALL BUSINESS UNITED, 2001

(Richard, FNS, Oct 10, In)
NSBU sees this dual-income source for large airlines as a form of "double-dipping". Why should larger industries be
handed out money while small businesses, the fire behind the American economy, beieftin the dark with a threatening....
cnance ot sur\livaL?

The Larger Economic Picture

As we all well know, the small business sector is an industry that is often overlooked and underestimated. There are
roughly 25 million small businesses in the United States at this time, but that number will undoubtedly decrease in the near
future without the aid of the government. These small firms support nearly 50 percent of domestic sales and 96 percent 01
all exports. Small businesses offer almost three uarters of new employment added to the econom embod nearl 100
R.ercentof all emplQyers q(lrl P-Xtenrl ()\/Ar half of the country's private wor orce.

And while we have already mentioned that small businesses often bear the brunt of economic downturns, the converse is
also true: small businesses always lead the way to economic recove . Given this fact, and the statistics cited above,.l!J§
obvious that the -ni e ~ates needs to aid small businesses in order to rebuild the entire economic infrastructure of the
country. In doing so, NSBU has proposed several ideas and potential additions tor a potential Economic Stimulus
PacKage.

MORE EVIDENCE

It, KERRY,SENATEFINANCECOMMITTEE,2002
(John, US Newswire, June 4, In))
"I want to focus my brief remarks on specific legislative proposals that are before the Finance Committee, but first I want to
take a moment to highlight for the committee the critical importance of small businesses to our nation's economy. Put
simply, small businesses keep the U.S. economy movinq. Thev are responsible for emplovinq more than 52 percent of the
private work force; for qeneratinq more than 51 percent of the nation's qross domestic product: and they are the principal
source of new jobs. Thev were also responsible for helpinq to end the recession of the earlv 1990s. and with the riqht
proqrams and assistance, small businesses, and a resurqence in entrepreneurship. will be a major factor in buildinq a
sustained economic recoverY.

6> ( ). MULTIPLE ECONOMIC STUDIES PROVE OUR CLAIM.

HOBBS,PROFLAW,1997
(StevenH., CapitalUniversityLawReview,In)
No one disputes that small companies play an important role in the economy, however critics
do contend that small business' job creating prowess has been over-hyped. Most economists
who have studied the numbers agree that small businessescreate more iobs than their share
of the market. The Small Business Administration says that, from 1976 to 1990, firms with
fewer than 500 workers created 65 percent of net new jobs, more than its 53 percent share of
total employment. Meanwhile, Fortune 500 companies eliminated 3,000,000 jobs between
1980 and 1994. 1. 275 Some advocates of small businesses look at regional differences for
job creation. In Austin Texas, according to the Austin Chamber of Commerce, small
businesses employ about 55 percent of the local work force and create six out of every ten
new jobs in the town. 276 In another report, 44,000 new jobs were created in the seven
Rocky Mountain states during a 24 month period from 1988 to 1990, according to a study by
the center for the New West. 277 The report concluded that entrepreneurship was a vital
force fot>job creation and new wealth nationally, especially in the west. In any event, the key
to bear in mind is that entrepreneurial small businesses are critical to our economy. Our laws
are structured to foster the growth and development of the small business community. Any
lawyer representing small businesses should be aware of government programs and policies
designed to assist such clients.
'-"'r-~~ ~"7T~ro"'T"~

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GBS TTate
Biz Con
G -~~-es 0 ~6 ~ 12f5£-
(-) Businesses oppose all type of regulations - 1970s prove
Gaines 1997 [Sanford, professor @ University of Houston Law Center,
UNIVERSITYOF CHICAGO LEGALFORUM, page lexis]
However benign cost internalization may be in theory, environmental laws enacted in
the early 1970s suddenlv presented firms with new direct costs that forced
unexpected adjustments to their competitive positions. Both individually and
collectivelv, the first reaction of many businesses was to arque that the new costs
threatened their abilitv to maintain profitable production. 15Their instinctive
reaction to oppose environmental protection initiatives in the 1970s in order to avoid
costs sowed seeds of [*239] environmentalist distrust of the business community
that continue to bear bitter fruit.

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