My Latest

Friday, May 29, 2009

“Subsidymagination:” GE’s regulatory robbery

General Electric's "Ecomagination" initiative turned four years old this week. My Examiner column today digs into what this whole green thing is about.

Imagine a salesman comes to your door peddling composting barrels. You tell him that while composting would offer some benefits—good for the environment, free topsoil—you don’t think it’s worth the cost.
He replies, “Oh, sir, but I’m afraid you don’t really have a choice. You see, the county government just passed a law requiring everyone to use a composting barrel. I should know—I’m also a lobbyist, and I helped write the law.”
You’d call that a racket. On a far larger scale—peddling “greenhouse gas credits” and windmills instead of composting barrels—General Electric calls it “Ecomagination.”
Read the whole thing here.

Wednesday, May 27, 2009

AES and GE imitate Enron on coal and climate

Continuing on my theme of cap-and-trade as corporate welfare, my Examiner column this week looks at the new Enrons:
A global power company that inherited some of Enron’s coal-fired power plants in Africa has also followed the late energy giant in the effort to profit from climate change legislation.

Virginia-based AES Corp. has partnered with General Electric Co. in peddling greenhouse gas offsets while lobbying for policies to make those offsets valuable — the same buy-low, lobby-hard, sell-high strategy tried by Enron. AES simultaneous expansion of coal-fired power in Asia, South America and Africa, however, highlights how environmental regulations can yield profit without necessarily yielding environmental gains.

Read the whole thing here.

Friday, May 22, 2009

Who benefits from federal fuel efficiency mandates?

I find it important to point out that environmental policy usually enriches some business with powerful lobbyists. My Examiner column today digs into fuel efficiency regulations:
And the President’s fuel-efficiency mandates may not hurt struggling auto companies, because Obama’s philosophy is the one Ronald Reagan mocked: If it moves, tax it. If it keeps moving regulate it. If it stops moving, subsidize it.

Carmakers have long been able to make more efficient cars, but consumers haven’t been willing to pay enough to make them profitable. In the bailout era launched by President Bush, however, profitability is hardly a concern: If the government likes what you’re doing, taxpayers pick up the tab.
Read the whole thing here.

Wednesday, May 20, 2009

The mysterious death of the chicken-fat car

Did you hear the one about the federal subsidy for pouring chicken fat into diesel? The odd tale is unfurled in my Washington Examiner K Street column today:
As President Barack Obama unfurls his fuel-economy standards and Congress takes up global warming regulations, it’s useful to remember that what emerges from environmental policymaking is not necessarily what’s best for the planet, but instead what’s best for special interests.

Consider the epic and somewhat bizarre struggle over clean fuels that ended last week. As usual, special interests were central to the drama. But the antagonists seemed right out of a Monty Python sendup of Washington politics: An oil company, hoping to profit from making trucks run on chicken fat, was thwarted by the soap industry’s lobby.
Read the whole thing here.

Friday, May 15, 2009

Global warming bill becomes another Washington porkfest

I've been writing since Enron about how climate change legislation is a racket. My Examiner today column hits on one specific angle, the giveaway of emissions credits.
Considering the anti-business and pro-environment rhetoric of ruling Democrats, you might expect all businesses would have to pay for all emissions. But the rule of thumb in Washington—at least as true in Barack Obama and Nancy Pelosi’s Washington as it was in George W. Bush and Tom DeLay’s Washington—is that no important bill passes unless a well-connected special interest benefits from it. Following the rule, climate change legislation is starting to look like the stimulus bill: a buffet of handouts.
Currently, Waxman’s bill gives away about half the credits, with most free credits going to the power industry. Edison Electric, the trade group representing these companies, has endorsed this bill.
It’s unsurprising the power companies should get their way. Data compiled by the Center for Responsive Politics show that the electric utility industry’s political action committees contributed $12.3 million to candidates last election—more than the PACs of the oil and gas, commercial bank, investment, real estate, or telecom industries—and nearly as much as all defense PACs.
Read the whole thing here.

Secretary Loophole

When historians look at the dramatic shift in the government-business relationship occurring now, they may well place, at the center of it all, the ingenuity of Timothy Geithner, the Treasury secretary and recently the chairman of the New York Federal Reserve Bank.

I wrote the cover story for the current American Spectator, titled "Secretary Loophole":
From his time at the Federal Reserve Bank of New York to his turbulent four months so far at Treasury, Geithner has made a career out of seeking—and usually finding—ways to do what most people thought the rules wouldn’t allow.


It could be that Geithner’s value for Obama— in these unprecedented times and given Obama’s unprecedented ambition—is precisely his ability to find his way around the rules.

It's now online here.

Wednesday, May 13, 2009

The alliance between Obama and big medicine

Over the weekend, the Obama administration excitedly leaked word about a meeting to be held on Monday, bringing the "medical-industrial complex" together behind the first leg of Obama's health care reform--cost containment.

Liberal bloggers figured that if big business likes it, it must be the status quo. Paul Krugman figured that the big businesses were just rolling over in the face of an unstoppable force. My Examiner column explains the more straightforward explanation for Big Pharma's and Big HMO's support for Obama's plan: profit.

The insurers’ interest here is obvious: Half their business is reducing health care costs. Plus, Kennedy’s plan would mandate everyone maintain health insurance.


At PhRMA’s annual conference, [PhRMA chairman David] Brennan uttered the magic words of a corporate executive looking for a handout and beneficial regulation: “I’m an advocate of free-market-based health care solutions. But within that framework, I support appropriate government efforts to protect people whose health care needs aren’t met by the private marketplace.”

Specifically, PhRMA wants a government mandate that insurers cover prescriptions. Also, the biggest drug makers currently subsidize the prescriptions of poorer customers, and health care reform provides an opportunity to shift the subsidy costs onto the government and the insurers.

Read the whole column here.

Friday, May 8, 2009

The Big Business of Big Labor

Handing Chrysler over to the UAW will be pitched as handing the automaker over to its workers. My Washington Examiner column today digs through the UAW's finances to argue that the UAW is, itself, a big business.
Peer deeper into the UAW’s finances, and it starts to look even more like a big business. The organization sits on nearly $1.2 billion in investments. This is money the UAW took from the paychecks of workers, money that now functions as an endowment out of which the union pays its staff and subsidizes its golf resort.

Black Lake Golf Club, which the UAW brags is "one of the finest anywhere in the nation," is owned by the union. Situated at the very top of Michigan, a drive of more than four hours from Detroit, it’s not exactly accessible to the union rank and file.

The resort is subsidized by workers’ paychecks, too—the union currently has $29.6 million in loans outstanding to the resort. That’s not their only posh real estate. The UAW’s Washington headquarters, home base for the union’s $1.6 million-a-year lobbying operation, is a beautiful $2.98 million townhouse in the DuPont circle neighborhood.
You can read the whole column here.

Wednesday, May 6, 2009

Obama’s auto policy: All in the Democratic family

Years from now, I would not be surprised if "Chrysler" is used as shorthand for the corruption that saddled the Obama presidency. My Examiner column today takes an opening salvo at the arrangement.
President Barack Obama’s auto industry policy promises to heighten the influence of lobbyists and to open the door to ethical transgressions and even outright corruption. By naming as car czar a financier who is also a Democratic fundraiser steeped in cozy business-government relationships, and by replacing the traditional bankruptcy procedures with the will of politicians, Obama has injected Detroit with all the elements of crony capitalism.
You can read the whole column here.

Friday, May 1, 2009

Thank Bush, Santorum for Specter party switch

My Examiner column this week discusses Arlen Specter's homecoming to the Democratic Party:
When the fox that has been living in your henhouse makes off with some hens, you don’t curse the fox. You ask who let the fox in. Republicans today should be angry not at Sen. Arlen Specter, D-Pa., but at former President George W. Bush and former Sen. Rick Santorum, R-Pa.

Santorum, the pro-life Catholic leader in Washington at the time, spared no effort in 2004 saving Specter from a primary challenge by then-Rep. Pat Toomey. President Bush, similarly, went above and beyond the call of duty protecting Specter.

Had either Santorum or Bush simply endorsed Specter and let him fend for himself, Toomey would have won the 2004 primary and been a slight favorite in that year’s general election.

But Santorum and Bush played their Rovian game of clever pragmatic politics and saved Specter. Had they not, we probably would have a Republican senator from Pennsylvania right now with Toomey.
You can read the whole thing here.