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Treasure Chests

As Nevada Journal goes to press, a federal judge in Michigan is considering whether to approve Dow Corning's bankruptcy reorganization plan. Victimized by a wave of lawsuits from women claiming they were injured by the company's silicone breast implants, the company filed for Chapter 11 in 1995. Yet despite the mountain of evidence indicating silicone does not make women sick, thousands of plaintiffs continue to stalk Dow Corning. This summer both sides in the tort war went at it before U.S. Bankruptcy Court Judge Arthur Spector, who will have the final say on a $400 million cap for the massive class-action suit.

Of course, when it comes to the breast implant jihad, not all women are created equal. Silver State implantees can sue not only Dow Corning, but its sister company, Dow Chemical. Why? The Nevada Supreme Court--alone, of courts throughout the nation--opined that Dow Chemical can be held liable for alleged damages from silicone. [See "Lemon Tort," Nevada Journal April, 1999.] In 1995 Nevadan Charlotte Mahlum successfully sued Dow Chemical, even though the company neither manufactured nor sold implants--it simply performed tests for Dow Corning. No matter, Nevada's justices concluded last December.

Meanwhile, science continues to exonerate silicone breast implants. In late June--a week before the Dow Corning bankruptcy hearing began--yet another solid study concluded that no link exists between the implants and disease. The Institute of Medicine, which conducted the study at the behest of Congress, concluded that silicone breast implants do not cause illnesses. Naturally, Nevada plaintiffs aren't letting the truth get in the way of their crusade. "I just hope that we, the women of Nevada, get to have our day in court," said Renoite Judy Lieb, "and get to make or have Dow Chemical take responsibility.".

Trashing the Monopoly

Both the Clark County Commission and the Las Vegas City Council recently approved a whopping 15-year extension for Silver State Disposal's monopoly on garbage collection in Southern Nevada. Even the editorial board of the Las Vegas Sun recognized the inadvisability of granting such a long contract: "Are there other potential competitors out there who might have an interest to enter the market and compete for the franchise in two years?" That's a good question, but so is this: Why should trash services be performed by a single company in the first place? "Liberal and conservative policy analysts have argued about how government should manage waste," writes Cato Institute Assistant Director of Environmental Studies Peter M. VanDoren in a new study, "but the idea that government--not homeowners themselves--should make those decisions is rarely fundamentally questioned." VanDoren argues that since new garbage collection firms' entry costs are minimal, the business is not a "natural monopoly" at all. "Government-directed garbage service," concludes VanDoren, "is ... made to order for those who believe that we should centrally manage post-consumer waste markets. ... State and local governments should turn over garbage collection and recycling programs to the free market. Let each household decide what services to purchase, and let them pay the bill directly for those choices."

Locked Out

In August residents of Stagecoach, a small community west of Carson City, sent Correctional Development Services (CDS) packing. The California company, which builds low- and medium-security prisons, had been eyeing the town for a new facility. "We want to wade in and see if the community is receptive to it," President John Ochipinti told the Nevada Appeal.

But Stagecoach wasn't charmed by the idea of a new prison. Silver Springs Conservation Camp, a women's facility, is nearby, and the Western Nevada Regional Youth Center is set to open in October. So residents turned out in force at a July Stagecoach Advisory Board meeting to let CDs know it wasn't welcome. Predictably, the Nevada Corrections Association showed up to spread anti-privatization rhetoric, but it's clear that residents opposed the plan even before the union's machinations.

Was Ochipinti bitter? Hardly. "I think we're probably going to look elsewhere, he said. "That's it in a nutshell. There are areas that want us. Obviously this is not one."

CDS's dead-on-arrival proposal highlights one more reason to get the private sector involved in locally unwanted land uses (LULUs.) Unlike a government agency, CDs had no choice but to ask residents for their approval. When it wasn't granted, the company moved on. That's almost never the case when the government's in charge. The Yucca Mountain Project--the mother of all LULUs--demonstrates this all too well..

Nightmare CAFE

In June the Competitive Enterprise Institute (CEI) released its latest look at the devastating effects of federally mandated corporate average fuel economy (CAFE) standards. First enacted by Congress during the "energy crisis" of the 1970s, CAFE requires that new cars meet a minimum miles-per gallon threshold. Thus, the standards are directly responsible for making cars lighter--and consequently, more dangerous.

In her analysis, CEI analyst Julie DeFalco noted: "A recent study from the National Highway Traffic Safety Administration (NHTSA), the agency that administers CAFE, found that increasing the average weight of each passenger car on the road by 100 pounds would save over 300 lives annually." The deadly legacy of CAFE has been known for over a decade now. In 1988 the liberal Brookings Institution concluded that by reducing the weight of cars by an average of 500 pounds, CAFE directly causes between 14 and 27 percent of the nation's traffic fatalities.

"Unfortunately," writes DeFalco, "few proponents of CAFE acknowledge this lethal effect. NHTSA [despite its own study] has steadfastly refused to admit that CAFE has any significant safety impact at all." And this ignorance or dishonesty might kill drivers more efficiently in the near future. Since sport utility vehicles do not need to meet the passenger-car standard, many greens are now calling for a tougher miles-per-gallon benchmark for soccer moms' vehicle of choice.

How does all this relate to Nevada? In two ways. First, the CEI study concluded that in 1997--the most recent year for which statistics are available--CAFE killed between 22 and 38 motorists in the Silver State. (And that's only applying the passenger-car standard.) CAFE's other Nevada connection? Retiring Sen. Richard Bryan has long been one of the program's zealots. In 1991, he fought to increase CAFE from 27.5 to 40 miles per gallon. And the truth about CAFE's deadly legacy hasn't yet sunk in--in the latest CAFE debate, Bryan is still wagging his finger.

Diversification-Who Needs It?

Last year a Nevada Journal cover story revealed how shallow, behind the lip service, had been the commitment to state economic diversification of the now-departed Miller administration. The trigger for the initial inquiry had been a Las Vegas Business Press news item. Though the item itself never made it into NJ's final story, it clearly revealed the Miller administration's real attitudes on diversification: With cocky impudence, senior state labor economist Mike Clarke felt free to confidently drip scorn and disinformation on the very idea of Nevada trying to diversify its economy.

Well, Clarke has been at it again. In an August 2 article in the Business Press, he hastened forward to poke his officious stick right in the eye of the state Commission on Economic Development (CED), which has Nevada's diversification effort as its central purpose.

Longtime bureaucrat Clarke--a Department of Employment, Training and Rehabilitation employee who seems to get his talking points not from state policy-makers but from the Culinary union/casino complex--intoned that diversifying Nevada's economy makes "no sense" and "the virtues of diversification may be overstated in any case."

Three weeks later the response from the CED came in overwhelming force--in the form of a research paper presented at the August 25 Governor's Conference on Economic Development. It began by noting not only "gaming lobby" efforts during the 1999 Legislature to "cast doubt on whether growth pays for itself," but also Clarke's earlier pronunciamentos in the August 2 interview. Then the paper sarcastically observed:

Apparently addressing Nevada's tax structure, the Business Press article states that "bringing in businesses that aren't paying taxes is defeating the purpose of diversification and puts a strain on services." The Commission, however, is unaware of any business in the state not subject to taxation of one kind or another.

An even bigger hit on the Clarke-gaming industry effort to disparage diversification, however, was the research reported in the CED paper. Titled "Does Economic Development Pay for Itself in Nevada?," the document reported results of running Nevada data through the prestigious Policy Insight econometric forecasting modeling program developed by Regional Economic Models, Inc. (REMI) of Amherst, Mass. The REMI models are used by multitudes of federal and state agencies, universities and private consulting firms--including, ironically, Arthur Andersen. And the one run by REMI for Nevada forcefully suggests that the casino industry and Mike Clarke have been dishing out to Nevadans the old carney flim-flam.

While the gaming industry--using a 1991 Arthur Andersen study--has long argued that new manufacturing employees coming to Nevada severely strain state resources, the REMI simulations showed it is much more likely to be people coming to fill the low-income jobs generated by the casino resort industry who end up a strain on state resources.

The Arthur Andersen study "failed to examine the job efficiency, broad base, and productivity aspects of the contributions of economic diversification to the taxation system," concluded the CED paper. "The simulations conducted by the Commission, on the other hand, show the manufacturing jobs brought to Nevada through the efforts of economic development groups promote job efficiency...."

Federal...What? Revisited

In June NJ carried a photo from downtown Reno of a new "Federal Police" sports utility vehicle whose driver was writing someone else a ticket for some alleged traffic infraction. When Nevada Journal--curious about what federal agency was now trying to extend its powers into minor traffic stops--traced the license plate back to the Bureau of Indian Affairs, however, BIA officials in Carson City wouldn't talk. Now, recent events in Douglas County appear to explain why--namely, that it was another case of federal lawbreaking.

That's the upshot of an official opinion issued by the Douglas County District Attorney's Office after a reserve deputy with the county sheriff's office was pulled over by a Washoe Tribal Police officer for allegedly exceeding the 55 mph limit by 5 mph. "Tribal police do not have general civil or criminal jurisdiction to stop, cite and arrest citizens as they have been doing on Highway 395," wrote Deputy District Attorney Brian Chally in a legal opinion. "There is no civil ... authority for tribal officers to stop, cite or arrest for violations of state, county or Washoe Tribe traffic codes or laws." Sheriff Ron Pierini says since Nevada's tribes have immunity from suit, civil liability for their law-breaking "law enforcement" will devolve on state and local non-Indian agencies. "I donšt think the sheriffs and chiefs throughout the state have a clue how serious this is," he told Record-Courier reporter Christy Chalmers. NJ


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