Steve Randall, Rob Crowner and Larry Ely: Election won’t help environment
Basic economic theory says that in a perfectly competitive market, rivals will eventually eat up any excess profits earned by a successful business. In other words, competition makes it difficult for most firms to generate strong growth and margins over an extended period of time.
— Investment firm
Morningstar, which uses a “moat index” to measure success at avoiding market competition. Quoted in D.C. Johnston, “The Fine Print,” (2012).
Zen Buddhists might find the above paradox instructive — like “the sound of one hand clapping.” But for most, it seems that “The Devil can cite Scripture for his purpose.” (“The Merchant of Venice”)
Yes, indeed, we are taught in standard economics class that market competition is good for society — but it seems that it’s not so good for business. When it comes to endless riches, monopoly is much better, which legendary financier Warren Buffett has made into his investment philosophy. He sought ownership of the railroad monopoly BNSF and his other businesses because they come with “economic castles protected by unreachable ‘moats.’ ”
Moats must be sustained by making government for and by the corporations; hence, when President Nixon signed the 1970 Clean Air Act, to protect Northeast forest and waterways from the acid-rain-causing, high-sulfur coal of Appalachia, Buffett could foresee a spike in demand for sulfur-free Wyoming coal. He also saw the advantage of controlling the BNSF monopoly transporting the coal. The Surface Transportation Board and the Staggers Rail Act of 1980, nominally designed to regulate monopoly railroads and protect consumers, has, on the contrary, according to Johnston, provided a government guarantee for Buffett’s moat. The former restricts who can complain about shipping rates (such as grain farmers), while the later allows BNSF to sign secret contracts with customers — such as MidAmerican, Buffett’s own huge electric utility.
Every seven seconds a railroad car is filled with 100 tons of Wyoming coal, destined to feed the nation’s electric utility companies. The latter are assured that monopoly coal will not endanger profitability in part because Congress allows them to defer taxes — even decades into the future while earning interest, as inflation reduces the actual tax to a pittance.
Everywhere one looks at our corporate-dominated energy infrastructure, the partnership between big business and government is busy constructing secure moats. Would you like to have someone pay your annual taxes? That is exactly what you are doing for so called “limited pipeline partnerships,” as the Federal Energy Regulatory Commission allows them to charge customers the cost of taxes they are not even required to pay in the first place. Oil refineries pass the cost on at the pump.
We are corralled into an energy consumption prison which is negatively impacting the climate. The two major parties in the election are fully committed to this corporate climate-change agenda. For example, while Romney spoke against Obama’s bailout of U.S. car makers, allowing “Detroit” to restructure by declaring bankruptcy, neither candidate has a plan to dramatically change dependence on climate-decimating auto transportation.
Romney suggests that the “unseen hand of competition” will repair Detroit (with worker layoffs), while Obama suggests bailout, but neither challenges the moats of the corporate energy infrastructure or imagines how auto workers might transition to other employment.
Romney’s hedge-fund investments in the troubled auto industry earned him millions in federal TARP funds even while he disingenuously praised competition: an instance of the devil citing Scripture.
The network of interstate highways, filling stations, sprawling suburbs far from work, big boxes, fast-food drive-throughs, coal trains and pipelines are an energy infrastructure the size and scale of which have become a physical dam against change. Every lifestyle is dependent upon it, and while lowering personal consumption and introducing sustainable living practices at one’s dwelling are helpful, systemwide economic change will be necessary to effect environmental progress. Planning, not markets, helped create the problem, and only planning — like the Green Party’s Green New Deal — can achieve alternatives.
As part of the Pioneer Valley Relocalization Project, Steve Randall, Rob Crowner and Larry Ely frame the town/regional strategy of adaptive changes necessary to avert climate disaster.