White House Chronicle

News Analysis With a Sense of Humor

U.S. Chamber of Commerce Faces Its Own Guns

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The U.S. Chamber of Commerce’s building on H Street in Washington glowers across Lafayette Park at the White House. It is a impersonal building, austere even, reminiscent of a British colonial post office.

 

With 3 million members, and the largest budget of any trade group in Washington, the chamber is a political force to be reckoned with, as is its hard-driving chief executive, Thomas Donohue.

 

Its stance is that American business is a kind of Gulliver, tied down by the Lilliputian strings of regulation and regressive public policy. Under Donohue, the chamber has relentlessly sought out threats to business, real and hypothetical. It opposes unions; regulation; government intrusion into markets; expansion of programs that cost tax dollars, which is all social programs; and raising the minimum wage. It is more ambivalent these days about health care. And Donohue can be quite capricious; for example, he has called for normalizing relations with Cuba.

 

Now the chamber is roiled as it seldom has been. The casus belli is climate change, and what a storm it has produced. Three large electric utilities have withdrawn from the chamber, accusing it of extremism in its stance on climate change. Sneaker giant Nike has resigned from the chamber’s board of directors in protest, but is still a member.

 

The utilities include Exelon, by some measures the largest utility; Pacific Gas & Electric, a giant in California; and PNM, the largest utility in New Mexico. As a percentage of membership, they do not affect the chamber much; but strategically, their rebuke means a great deal. They are the very constituency the chamber and Donohue are out to help. They burn coal as well as other fuels, and they are critically affected by what is to happen in climate legislation or regulation.

 

The utilities want Congress to pass cap-and-trade legislation. If Congress fails to pass the legislation, they fear Environmental Protection Agency regulation. The stakes are high. The chamber is opposed to the present cap-and-trade legislation before Congress, and has challenged the science that would be used by the EPA.

 

“If Congress does not act, the EPA will and the result will be more arbitrary, more expensive and more uncertain for investors and the industry than a reasonable, market-based legislative solution,” said John Rowe, Exelon’s chairman and chief executive officer.

 

Two of the big rebel utility CEOs are national business figures: Rowe of Exelon is revered as a prince-philosopher inside and outside of the electric industry; and Peter Darbee of PG&E, who wrote a strongly-worded letter of resignation to Donohue, is a major corporate friend of the environment.

 

All three utilities, along with their Washington trade association, the Edison Electric Institute, favor cap-and-trade legislation now being considered in Congress. Another utility savant, James Rogers of Duke

Energy, is pulling his utility conglomerate out of the National Association of Manufacturers, because of its opposition to cap-and-trade.

 

Darbee hit hardest at the chamber. In a two-page letter he wrote: “We find it dismaying that the chamber neglects the indisputable fact that a decisive majority of experts have said the data on global warming are compelling and point to a threat that cannot be ignored. In our view, an intellectually honest agreement over the best policy response to the challenges to climate change is one thing; disingenuous attempts to diminish or distort the reality of these challenges are quite another.”

 

The chamber has opposed not only the EPA’s plans to regulate carbon emissions in the absence of legislation, but also has attacked the scientific basis put forward by the agency. Yet Donohue insists that the chamber is neither denying the carbon emissions problem, nor is opposed to a legislative solution. Instead, it wants one tied to a global agreement on greenhouse gas emissions to protect U.S. companies from onerous conditions.

 

Friends of Donohue–who applaud much of what the chamber stands for–say that it is caught in a position where it has to say what it is for, not just what it is against. The chamber has always been at the barricades, not facing its own guns. The experience is novel and unpleasant for those on H Street. –For the Hearst-New York Times Syndicate

 

 

 

The Joy of the Private Car

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The U.S. Chamber of Commerce said Wednesday it will attempt to do what a string of economists and urban planners couldn’t: persuade the Congress to raise the federal gasoline tax to pay for better roads. — The Wall Street Journal

For all the problems that automobiles bring in society, they are wondrous things. They are, in a way, emblems of freedom. Surely private, discreet mobility is nearly beyond price?

There’s a price and a high one at that: pollution, congestion, sprawl, accident lethality and the geopolitics of oil. But oh, the joy of turning the key and heading to a highway; free, anonymous and among your own things (or your own mess, to be precise), listening to your choice of music–your life briefly in your control.

So far, the joys of the personal car have mysteriously evaded the attention of major poets and composers. Maybe it’s because cars bring joy equally to the proletariat and to the elite.

The primary differentiation between vehicles is not aesthetic but financial. A neat car, like a Bentley or a Maybach, costs money, lots of it, compared to, say, a Ford Focus. Yet their function is identical: they move us around.

Just four times in the 100-plus-year history of the automobile has a truly classless–in the sense that blue jeans are classless–car appeared on the streets. These were vehicles driven by the wealthy and the lowly with equal enthusiasm. They were the Ford Model T, the Ford A, the Volkswagen Beetle and the Morris Minor. All were owned and driven across the social spectrum.

It is an American conceit to believe that our love affair with the automobile is unique. It isn’t: It’s as universal as love itself. The poorest Indian dreams of abandoning the bullock cart for the automobile and even Europeans, who are well served with public transportation, love their cars.

One of the first consequences of Irish prosperity was that Dublin became a traffic jam. The Irish folk song goes, In Dublin’s fair city where the girls are so pretty/ I once met a girl named sweet Molly Malone/and she wheeled her wheel barrow/ through the streets broad and narrow/
singing cockles and mussels alive alive oh. Well, Molly would have a hell of a job in today’s traffic.

When Britain opened its beltway around London–known as the M25 corridor or Orbital–in 1986, so many cars took to the road traffic stopped dead, despite designated speed of 70 mph.

What has happened in western Europe is that driving has become more of a recreational activity, and commuting to work is close to mandatory. London, for example, is the second great city in the world to impose a stiff charge on private cars entering the downtown. The first was Singapore.

Mayor Michael Bloomberg would like to do something similar in New York City, but he faces too many jurisdictions that feed traffic into the city. Other American cities do not have the public transportation infrastructure to be able to contemplate choking them off during the week.

New housing developments everywhere are antithetical to public transportation. The cul-de-sac is hard enough to get a fire truck into, let alone to run buses.

A second problem, after congestion, is where are we going to get the oil to fuel the fleet of cars which is growing exponentially around the world, with most that growth in China and India? That future, for a period of 60 or so years, could be natural gas or electricity–and the smart money is on electricity. The rub is that batteries are not yet up to the task; and today’s gasoline and diesel automobile needs a lot of power for non-motion functions, like air conditioning, lights, power windows, seats and trunks.

Will electric vehicles reach market fast enough? That depends on the thorny issue of geopolitics, religious fanaticism, royal families, and prosperity in India and China.

How to proceed? The government would like to move everything forward, but the Department of Energy is having difficulty getting research and development money out of the door, while local jurisdictions are cutting back on highway funds.

Enter the U.S. Chamber of Commerce with an unlikely proposal for a business group: a fuel tax devoted to transportation solutions. It’s radical, unexpected and comes from an organization with right-of-center clout.

Maybe one day, we’ll again tool down the open road—well, get into a stream of traffic that moves, whether it’s with hydrocarbon or electric fuel. Varoom!  –For Hearst-New York Times Syndicate

 

 

 

 

Girding Against a Non-Existent Enemy

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There is a new growth industry in Washington; one which will consume hundreds of millions of dollars before it has run its course, and one that is not needed. No, it is not a new government program. It is a new private sector movement to save capitalism, and it is spearheaded by the U.S. Chamber of

Commerce.

The Chamber has committed to raise and spend $100 million on an across-the-board effort to fortify capitalism through media and public affairs campaigns. It will be a big payday for public intellectuals who can whip up an audience about the incipient resurgence of, well, communism, socialism and maybe even monarchy.

Anyway government in general, and the administration of Barack Obama in particular, is sure to figure as the merciless opponent of capitalism, seeking to regulate it and nationalize it out of existence. Only Asia, it would seem, is immune from government’s dead hand. There, in the mythology of the times, governments work for capitalism, as with the Japanese Ministry of Trade and Industry and the global reach of China.

 

To be believe this you have to swallow hard and affirm that bureaucrats of Asia are oh-so-smart, while those of the United States and Europe are stupid, incompetent and out to promote failure.

 

The Chamber, one hastens to point out, is not the villain here; it is, if anything, the victim. A lot of Chamber members really believe that capitalism is endangered by the Obama administration and its preparedness to intrude into markets. This belief has been fed, this paranoia has been indulged by the far-right wing and its protagonists in the blogosphere and broadcasting.

 

The fact is that capitalism–the world of willing buyers and willing sellers–has been around since the dawn of human history. It is as natural, as native, as fundamental to human society as the quest for God or the organization of the family. Probably as old as the market itself are the rogues who distort the market for excessive gain. Christ did not throw the moneychangers out of the temple for praying too fervently. Nor did Lehman Brothers collapse because it was timid about leverage.

 

Equally, capitalism has had an historic problem with social justice. No less a philosopher of capital’s virtue than Irving Kristol, inventor of neo-conservatism and father of its proselytizer, Bill Kristol, has pointed out that capitalism would not find fault with slavery or worker exploitation. Other institutions must seek that rectification. In Kristol’s words, “Two cheers for capitalism.”

 

Capitalism’s great enemy was, of course, Karl Marx and his collaborator,

Frederick Engels (Lenin was an adapter). But after much struggle, communism, or anti-capitalism, failed abysmally. It was the worst social and economic experiment ever and its few remaining adherents, like Cuba, are themselves economic and social failures.

 

Daniel Yergin, author of “Commanding Heights,” makes the point that capitalism has swept away any thoughts that communism has a future. Yergin’s commanding heights are controlled by capitalist nations.

 

Yet the fear that the armies of controlled economies are on the march still haunts many business people, who should know better. There is plenty of irony to go around in this fight against nothing.

Health care is the Trojan horse of those who see the enemies of capitalism on the march. Ironically, it is the Chamber which has called for manufacturers to be saved from the burden of health care. It has also called for normalization of relations with Cuba and a national gasoline tax.

Capitalism is not in danger. Even Britain’s venerable Labor Party had shed most of its socialist principles to compete and win under Tony Blair. The great writer H.G.Wells, one of the fathers of science fiction (“War of the Worlds”), predicted that socialism would defeat capitalism because it was a system and capitalism was not.

Wells had it exactly wrong. Capitalism is a dynamic system and socialism or its extreme, communism, is not. –For North Star Writers Group

 

 

Fighting the Socialist Straw Man

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Don’t look now, but there’s a monster hiding in the attic; or is it crouching behind the garden wall? Maybe it’s lurking with a troll under the bridge? There are a growing number of Americans who think that socialism is a threat to our free-market economy.

 

Now, the U.S. Chamber of Commerce says it will commit millions dollars—maybe as much as $100 million–to a long-term campaign to teach the verities of capitalism and free markets.

 

“Supporters and critics alike agree that capitalism is at a crossroads,” said U.S. Chamber President and CEO Thomas J. Donohue, “It’s time to remind all Americans that it was a free enterprise system based on the values of individual initiative, hard work, risk, innovation, and profit that built our great country. We must take immediate action to reaffirm the spirit of enterprise in America.”

 

In his statement, Donohue did not mention socialism; but the implication is that it is coming in with the policies of the Obama administration.

 

Indeed, President Obama has not been squeamish about government intervention in the market. The economic stimulus package, the bailout of the banks, General Motors and possibly some states, the wishful “green”energy bill on Capitol Hill, and, front and center, health care reform all add up to a fear by many Americans that the United States is headed toward European-style democratic socialism.

 

The U.S. Chamber’s “Campaign for Free Enterprise” will feature a grass-roots movement, a “vigorous” media and public education campaign, focusing on the “economic literacy of younger Americans,” and issue-advocacy program, leading up to the 2010 elections and, of course, lobbying. It reflects a deep concern by the board of the chamber that the country really is heading down the path of Euro-socialism.

 

This concern begs the question: Is that so bad?

 

Putting aside those who think Europe’s social contracts of today are a kind of Marxism redux (they are not), what are the fears? Mostly, Europeans like their system and Organization for Economic Cooperation and Development finds the countries of western Europe out-score the United States in terms of national happiness. The socialized service most feared in the United States,

nationalized medicine, is both criticized, particularly in the United Kingdom and Italy, and loved. No politicians dare suggest privatizing it. The same goes for subsidized and pervasive public transportation,

 

The real problem for Europe is rigidity. Business has no freedom to act, and successive governments have mortgaged themselves to public service unions in country after country.

 

Margaret Thatcher loosened some of those bonds in Britain; but compared to the United States, business is still shackled in a way that would be hard to swallow here. Particularly, the American employment model is at odds with the European one. U.S. employment law is built on the concept of employment “at will.” In Britain, and most of the rest of western Europe, a fired employee can drag the employer before a labor tribunal and force an arbitration that usually will side with the worker.

 

This may be noble in concept, but it is devastating in reality. Even in good times, employers fear increasing payrolls. So permanent jobs are treated as temporary, and contract employees are favored over regular ones to protect employers from the rigors of hiring.

 

European governments do try to fix everything, and pass laws and rules to implement the fixes. I have heard social workers complain that they have to tell people who rip off the system how to do it more efficiently. In Britain, welfare, unemployment insurance, and other welfare-state handouts are known as “benefit”–and it can work like an annuity, especially in disability cases. I have heard British social workers complain that they feel complicit in abusing the system.

 

In Scandinavia the father, as well as the mother, can get a year of maternity leave, The “coddled society,” you might say. Yet as Harold Meyerson, a declared liberal, writes in The Washington Post, conservative parties embrace most of the same goals as the left-of-center ones.

 

Certainly cradle-to-grave Euro-socialism is expensive. It also stifles the business dynamic; business just has so much more to overcome to succeed and to survive in Europe. If you want to start a business, better do it in the United States. But if you want your opera produced, try Europe. Good and bad things come in the European package.

 

The U.S. Chamber of Commerce will get something for its efforts and its money if it admits that the door to more government was opened not by incipient socialists but by the excesses of capital managers, and that the threat to American business is wrong regulation not regulation itself. The specter of socialism in the U.S. context is a political device to frighten the gullible. –For Hearst-New York Times Syndicate