Friday, April 17, 2009

Bait and Switch

To paraphrase Dan Akroyd from a well-known SNL skit, "John, you ignorant slut." John Torinus, business-interest shill and Journal Sentinel "writer", spews forth yet another column of misinformation in his April 11th article, Cap-and-trade bill could devastate manufacturing. As usual, he derides anything regulatory toward business, and lectures about how cap-and-trade will be bad for business.

He is basically defending the do-nothing, status quo protecting, companies that have been too lazy and stupid to get their act together over these last few decades to address the sustainability and environmental challenges that are now at a breaking point.

David Yarnold, in an excellent commentary for McClatchy, discredits all of the lame excuses put forth by Torinus. All the proponents for doing nothing about carbon emissions incessantly scream about the cost and the (fictional) negative economic consequences. Strangely they never mention the negative economic consequences of destroying the planet. As Yarnold reports, the Department of Energy estimates a cap on carbon would cost just ten more cents a day. Roughly thirty-six dollars a year. A small price to pay to save the planet.

Torinus completely ignores that cap-and-trade could be an opportunity for Wisconsin's manufacturing capacity and comparative advantage, a chance to be leaders in the innovation and technology transformation to sustainable industries. This regulatory mandate alongside stimulus-bill infrastructure improvements (like light rail) are an opportunity for Wisconsin to lead in green-innovation, create living-wage jobs, protect the environment, and enable a favorable forward-thinking business environment for Wisconsin to grow and remain competitive into the future.

Energy is a pillar of modern society. It is a public good and should be a public utility. Otherwise, if it must remain in private hands (which have been unable to make advancements nor contain costs) the government should cap profits and rate increases substantially. (We have a hodge-podge system similar to this, but it works horribly and is inefficient.) Government could dictate an allowable profit margin while ensuring maintained infrastructure standards and quality service provision by the private provider.

Torinus then gives a woe-is-me for Serigraph, of which he is CEO, and the fictional costs they would have to endure if cap-and-trade were instituted. But maybe Torinus could use some of the money Serigraph is saving from not paying its fair share of taxes to cover those fictional costs.

He continues with the 'poor Serigraph' routine claiming they could not pass any additional cost onto their customers. But this is the cost of business, which is what business models take into consideration, and what managers are suppose to, well, manage. These considerations should be included in the real price of any service or product, rather than circumventing these costs onto the public through subsidies, exemptions, and loopholes, as is the typical route for most big businesses. Or is government supposed to do nothing, and benefit Serigraph, at the expense of the majority of citizens and the planet?

We're taught to believe that those with Ivy League degrees - John graduated from Yale - are incredibly smart, trained well, and can solve the tough questions our society faces. These are exactly the types of decisions (efficient and sustainable production methods) that CEOs should be making if they want to claim they are worth the millions of dollars they are paid. But, as always, it seems their solution is for government to change the rules for them, subsidize their continued misadventures, and allow these captains of industry to plunder and plod along.

Cap-and-trade will primarily induce sustainable efficiency. It will reward those companies which plan, innovate, and create. It will weed out the antiquated. The days of inefficient - economically, societally and environmentally - destructive business practices being allowed to continue to exist through subsidization and market manipulation is over.

Torinus also takes a jab at environmentalists, "Environmentalists assure us that the economic questions can be worked out. Not to worry." Somewhat reminiscent of how the CEOs and Wall Street executives assured us that they knew what they were doing and had conquered risk? Everything the business community claims to be, all the lofty jargon they emit, is false. Their emperor has no clothes. Thanks, John, but I think we'll listen to some entity other than the business community from now on.

He helps buttress his opposition's case by pointing out that the Midwest is 60 percent dependent on coal. What the hell have our politicians and captains of industry been doing these last thirty years? Then in an amazing show of inflexibility, obtuseness, and treachery, Torinus spouts off about the bogus "clean" coal. This is a finite, heavily-polluting resource. Torinus feels we are going to competitively move forward by investing in yesterday's energy source? And then, of course, he has to mention nuclear. But what do we do with that waste? The business community and their ilk seem to feel the solution to one problem (coal) is another problem (nuclear waste).

If a business can not get by without subsidization, the government manipulating the market in one's favor, exemptions, tax havens, or cooking the books, it should not be in business. We allow business to grow to enormous proportions, so enormous they're allowed to bet over fifty times their value. They are able to leverage billions and put whole communities and the economy in jeopardy. Businesses hire lawyers and buy politicians to write laws and devise tax breaks solidifying this privileged societal position.

It's time we actually have public policy for the public again, by following parameters constructed by government about what is best and how it will be accomplished. That is representative democracy.

For Further Reading:
Does Taxing Pollution Lead to Higher Prices and Lower Aggregate Output?
History of the U.S. Electric Power Industry
Jobs & The Environment: The Myth of a National Trade-Off
Regulation and Competitiveness

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