Living With Uncle Sam’s Rules. Organizations and their Impacts

The Wall Street Journal recently held an ECO:nomics conference during which GE’s CEO Jeffrey Immelt argued against conservative ideologues about his support for a legislated cap-and-trade system. The Competitive Enterprise Institute as well as the Grist columnist took interest because of Immelt’s excellent arguments against ideologue beliefs.
Many of the ideological conservatives have been angered by the CEO from the second largest company in the world due to his partnership with the U.S. Climate Action Partnership (a lobby group that focuses on implementing a cap-and-trade system) as well as Immelt’s pressure to “embrace clean energy and sustainability”. He responded to several criticisms, saying that it would be better to “get out in front of what’s coming than wait on the sidelines”. So often in the past, the government has waited until it is almost too late to take action on important matters. This can be partially attributed to the lack of public attention to certain subjects which translates to similar behavior in politicians who are attempting to appeal to their constituencies, but in the case of the environment, politicians can not afford to wait until the majority takes note.
One critic asked what entrepreneurs should do if they cannot afford the time or money to lobby for special treatment in Washington when the carbon cap begins to weaken the economy. To this, Immelt replied simply, “We compete our asses off…we’re No. 1 at what we do!”. When asked how many wind turbines he would have sold in the past year if he had not received helpful government subsidies, Immelt pointed out that he would have sold just as many, but they would have gone outside the country. This remark reminds us that there are many ways to achieve something whether it’s through Congress, bureaucracy, or international trade, and if government legislators do not seem to be going your way, there is always an alternative that will allow for competition and a healthy economy.
Immelt reaffirmed several points throughout his time at the conference. One argument he gives points out the ideologue’s false sense of a free market. In a world where housing is controlled by mortgage tax credits; healthcare is aided and regulated by Medicare and Medicaid; and even his company, General Electric, entered into the field of aviation as a result of defense funding, it is unreasonable to believe that the “only regulation [for energy] will be the price of a barrel of oil”. Each branch of our government serves to regulate a corresponding branch in our lives, and attempting to prevent this relationship from developing in the energy industry is an unreasonable request in a future that holds no guarantees. Immelt also pointed out that although “businesses always forecast doom, regulations can often work to spur competition”. The banning of monopolies created competition in specific markets, and other regulations can also increase the incentive to bring a better product to consumers at a lower price. Immelt gave several examples of helpful regulations, citing the SOX trading program, OSHA 1910, and the CAFÉ standards. He admits, “US CAP may not be perfect, but it replaced a vacuum”.
Immelt’s most potent justification was posed as a question: “What’s your favorite part of our current energy policy?...Silence…Make a list!...More Silence. Then scattered laughter. Then waves of laughter. And finally, applause.” In other words, there’s nothing currently enjoyable or beneficial about our limited policy, and any change is positive.

The Environmental Working Group has come out with a report stating a drastic increase in close proximity mining and urban areas. Due in part to an increase in the value of minerals, as well as a now “antiquated U.S. mining law, which is highly prospector friendly” there are more than 51,000 hard rock claims within five miles of a “population center”. One sense of relief comes from the fact that less than five percent of the claims will be made into full mining facilities, but in places like Las Vegas and Phoenix (where there are over five thousand claims within a five mile radius) environmentalists are counting on at least a few new mines and are not pleased about it. The main reason for the stress comes from knowing that mining creates more toxic “Superfund” sites than any other industry, and also requires large amounts of water that are unavailable in the aired climate currently being targeted.

According to the World Wildlife Fund, the tiger population has been decreasing of late, and has been approximately halved in the past twenty-five years from 7,500 down to about 3,500 currently still alive. The two main factors, destruction of habitat and poaching, have led to this decrease which is not expected to stop as China continues to demand more tiger parts. Apparently there is a very large market for tiger parts and, similar to the extensive poaching of elephants for their tusks, if nothing is done, the tiger will soon approach the endangered list. And, knowing how well that list is doing under the Bush administration, we cannot allow the tiger population to dip that low.

The Sierra Club’s recent removal of the Florida chapter leaders and the club’s subsequent suspension of the chapter for four years is the first excusing of it size in club history. The act came as a result of criticisms from Florida leaders aimed at the national board who recently allowed Clorox to us the Sierra name and logo as an endorsement for their new “Green Works” product. The decision has been very controversial across the country with the club’s more than one million members because of a report given by the Public Interest Research Group Education Fund stating Clorox as “one of the nation’s most chemically dangerous companies”.
Based upon a news report, the head of the Chemical Council of California was using the deal with the Sierra Club to mitigate the fact that the chemicals had been linked with $2.6 billion in medical expenses paying for sicknesses caused by his industry. In a filling with the Securities and Exchange Commission, Clorox admitted, “The Company is currently involved in or has potential liability with respect to the remediation of past contamination in the operation of some of its currently and formerly owned and leased facilities…The Company handles and/or transports hazardous substances, including but not limited to chlorine…A release of such chemicals, whether in transit or at our facilities, due to accident or an intentional act, could result in substantial liability”.
One of the main angering factors resulted because many club members have been working over the past fifteen years to get rid of the chlorine impact that companies such as Clorox have had. Not only has Clorox shown its incompetence with chlorine, but it also received a $95,000 fine for violating a pesticide law around the time that the deal was taking place with the Sierra Club (another event leading to the suspicion that the deal with Sierra Club was a cover-up).
In defense of the decision, the director of licensing and cause-related marketing said that the sierra club will receive an undisclosed (but “substantial”) sum from the deal that it will use for funding purposes. The executive director also gave his take saying, “The idea is that the Clorox logo will convince people the products will work, and the Sierra Club logo will convince people the products are environmentally preferable”. In response to the work of some members to get rid of chlorine use, officials have stated that the recent deal with Clorox will serve as a step toward accomplishing that goal, and advocates of chlorine reduction must be reasonable in their requests for change. In a post on the club’s website, there was also a justification that seemed to make the deal illegitimate with the following support:
1) The Club's Corporate Relations Committee examined the proposed deal with Clorox and rejected it, but it was overridden by the national board of directors
2) The Club's Toxics Committee was not consulted before the deal was signed
3) The Club's Corporate Financial Acceptance Policy says, in part, "The Club will not endorse products.The national board’s decision has left the group angered, and many members wish to take action against them. Having been a successful lobbying force and interest group in the past, it will be interesting to see the result of such a dividing event among such a large and spread out group. The most affective interest groups are organized and focus on a single goal. With this controversy, it could be difficult to maintain a level of organization, and a specific policy focus is almost completely out of the question.