Compelling Camouflaged Corporatism

George Rebane

Corporatism is the classical scourge of capitalism wherein privately held corporations, either alone or within associations, join with government to create business environments (e.g. markets) that reduce their risks from competition, natural anomalies, and economic turbulence through enactment and enforcement (by the government gun) of favorable laws, regulations, codes, fees, etc that serve to guarantee their survival and profits.  Although not limited to large corporations, corporatism inevitably becomes their executed strategy as their marginally managed size makes them vulnerable to more nimble competition at home and abroad.

The nearby photo (apologies for the quality; it was quickly taken with my phone; inc.com didn't do much better, but doesn't connect the dots) is of a paid ad in the 12may17 WSJ containing an open letter to President Trump from the grim array of large corporation signatories beseeching him to keep the US in the recent Paris accords that presume to combat preventable manmade global warming.  When we read the bulleted reasons for why it is in our interest to remain bound to those accords, it should become clear that these arguments are meant to convince and comfort the nation’s light thinkers.  All of them are specious in the sense that they outline actions and business practices which the corporations could undertake on their own without any need for the Paris accords.

But a deeper consideration reveals that these ‘benefits’ to the undersigned, paid for by the consumers, will only accrue and make sense if they are executed within government mandates fashioned to mangle markets so that the big guys are afforded a sufficiently deep and wide regulatory moat behind which they can risk such compliance investments that would make no sense within freer markets.  For example, “(Enforcing the accords on everyone) benefits American manufacturing as we modernize to new, more efficient technologies.”

Well then, if our manufacturing will truly be ‘benefitted’ by modernization and integration of “more efficient technologies”, then why not do it regardless of the Paris accords and enjoy the rewards?  And therein lies the lie, because the benefits will accrue to the undersigned ONLY if expensive constraints are imposed which their (smaller and/or more efficient) competitors can ill afford.

The same line of revelatory reasoning can be applied to each of the other seemingly salutary “several ways” claimed in the letter.  The overarching rationale for these cumbersome corporate giants to support the anticipated fruits of the Paris Agreement is to increase their own survivability and competitive advantage in a rapidly evolving global economy in which they face stark limits to growth and profits without government as their enforcement partner.  Such a broad appeal to light thinking represents the finest practice of compelling camouflaged corporatism.

Comments

[Walt]

I have a few examples of this.
Seen the new gas cans over the past few years? Those with the ECO friendly (until you try and use the damned thing and spill more then with the old ones) pour spouts? Yup, mandated by Ca. You know someone lobbied the state to make us buy them.

If you build, then Senco fasteners made damn sure "their product" was the "only" solution in earthquake safety. We are not in that high risk zone, but we "must" use those things here. Another state "mandate" from palm greasing.

Now you folks with diesel rides,, think that DEF fluid your forced to by came naturally? Someone went to the state wearing kneepads. (notice there is only one maker of that muffler bearing lube?)

[Russ]

Relying on Bad Science Produces Bad Policy

I got an email from Heritage Foundation asking for my opinion on the Paris Agreement. My position was the Paris Agreement is based on flawed science, and we should not be making energy and economic policy based on bad science. My assessment is based on Dr. Judith A. Curry's testimony at a Congressional Hearing on Climate Science: Assumptions, Policy Implications and the Scientific Method, 29 March 2017 [HHRG-115-SY-WState-JCurry-20170329]

The Paris agreement is a scheme built upon a foundation of completely inadequate science as clearly acknowledged by the UN IPCC. The Paris agreement process is driven solely by the politics of climate alarmism.

The 2001 UN IPCC AR3 report established that it is impossible to create climate models which accurately represent global climate when it concluded that “In climate research and modeling, we should recognize that we are dealing with a coupled non-linear chaotic system, and therefore that the long-term prediction of future climate states is not possible.”

The most recent UN IPCC AR5 report relies upon these inadequate climate models and tries to hide this inadequacy by employing slight of hand “assessed likelihood” opinions, conjecture and speculation to improperly convey degrees of certainty of climate outcomes that are unsupported by scientifically established and mathematically derived probabilities.

The Paris agreements provisions which rely upon climate “models” that are clearly inadequate and where scientific conjecture is falsely disguised as certainty have also been unequivocally determined to be flawed and failed as documented in Congressional testimony by climate scientists before the House Science Committee in March 2017.

According to Marlo Lewis Jr. of the Competitive Enterprise Institute the chief perils of remaining in the Paris Agreement:

1. The Agreement is the legal framework for a permanent global campaign of political pressure and diplomatic blowback to “name and shame” leaders, like Trump, who dare to champion the American people’s freedom to develop the country’s vast energy resources.

2. Remaining in the Agreement ensures that U.S. leaders will continually have to negotiate domestic energy policy with foreign governments, multilateral bureaucrats, and anti-growth advocacy groups—elites who do not put America’s interests first.

3. If Trump is free to treat President Obama’s emission-reduction pledge—the U.S. “nationally determined contribution” (NDC)—as a retractable wish list rather than the official commitment it plainly is, the next progressive president will similarly be free to rescind Trump’s NDC and pick up where Obama left off. No revision of the U.S. NDC can secure the future of U.S. energy producers as well as exiting a pact designed to bankrupt them.

4. Failing to repudiate a treaty adopted unilaterally, with the stroke of a presidential pen, without a benefit of the Senate’s advice and consent, will set a dangerous precedent undermining one of the Constitution’s important checks and balances.

More Here: https://wattsupwiththat.com/2017/05/11/paris-agreement-carbon-tax-elders-offer-more-bad-advice/

[Account Deleted]

I find it amusing that the left constantly harps on the 'fact' that corporate America is nefariously funding the anti-AGW campaign. The list of corps on that ad are the who's who of corporate America.
I suspect many (if not all) of those companies decided years ago that they had better get on the green band wagon regardless of where the facts of science lay. The political winds were blowing strong for a 'friendlier' fed and state govt if they played the green card.
After a long term investment in the green game, they sure don't want to see their green investment strategy blow up in their face. They are now stuck with a song to sing and sing it they will, no matter what the scientific evidence is.
Tesla is now one of the highest valued companies in America. They lose money on every car they make and have fallen years behind schedule on delivery of their purported 'affordable' model. If the fed and state govts stopped handing Tesla handouts, the company would fold up like a cheap tent. Even billionaire Musk wouldn't bail out Tesla with his own money when they needed some ready cash. Of course we taxpayers were put on the hook to guarantee the loan. The stock rose back into positive territory for Al Gore and he cashed out.
The left always stands ready to engorge the wallets of billionaires with tax payers' money. As long as it's 'green' of course.

[George Rebane]

re ScottO 415pm - At this point I would like to draw the attention of the casual reader to the sound of liberal crickets in response to the posted essay and comments like this of Mr Obermuller.

[Russ]

I once wrote a column and articles for a regional business magazine and sometimes sent critiques to the editor. Over time the magazine published more "going green items and ads." I wrote a note to the publisher outlining the failed arguments for anthropogenic global warming. She shared a letter from a board member with similar thoughts. Then she carefully points out the magazine would continue down the "going green" road as that was where the money is. Companies wanted to boast of their "greenness" in ads and articles. The scientific facts did not matter; it was necessary for the magazine and business community it served to be viewed as part of the anthropogenic global warming team. I still read the magazine, but have not been compelled to submit any article ideas, we now exist in two different worlds one real and one a "going green" fantasy.

[Todd Juvinall]

I got into it a couple of times with Seth Borenstein, the AP AGW lover. He really has a podium for spreading the lies in all the newspapers. I asked AP more than once why they allow only his agenda and not a contrary one. Never respond.

[fish]

Sounds like California and the Corporatists might want to start battening down the hatches....

Hey Mish

It’s been a while since my last email. Here are some views from this business banker’s chair.

I had lunch with a financial planner today, and he said the new tax plan coming from DC would eliminate tax-deductibility of state taxes. While Federal tax rates might go down a little, the net impact would be higher total taxes via higher total federal taxes due to the loss of writing off state taxes. At least, that is the view for those of us in high state income tax states like CA. He already had clients exiting the state.

The gentleman I had lunch with today is a lifelong financial planner, mostly on the insurance side. He stated that the insurance industry today is in worse shape than that of the banking industry during the prior recession, and yet we hear very little about it. If so, we both agreed that the world isn’t ready for an insurance industry meltdown anything like that of the Banking industry during the last recession.

I provide financing to a lot of subcontractors (the trades). While visibility 9-12 months looking forward has looked good for the past few years, I finally have a client (a framing contractor for the major home builders) that has said something to the contrary. He stated that some of his major home builders are starting to see some issues in selling inventory in CA. Without going into specifics, he also stated that he senses something is changing in their world.

I’ve seen a spike in the number of unqualified (financially and expertise) in people who want to get into flipping homes. It’s becoming vogue amongst those who lack the qualification to do it at a time when the values in the San Francisco Greater Bay Area have never been higher. Somehow, 2007 peak real estate values were crazy, but the value today that are higher than 2007 are justifiable/sustainable. That’s a classic late cycle red flag.

During the last 3-4 years, I’ve seen more people who seek to finance new restaurants than any time in the past 20 years. This industry seems frothy. With rising rental costs for space and higher minimum wages for staff, I’m seeing pressure on the cost structure of existing operators squeeze them, while people are rushing to build out a new restaurant.

Finally, for the past 12-18 months, I’ve been flooded with new loan requests. I haven’t been this busy with new loan requests since the last cycle Top. Again, this seems like another last cycle red flag.

Hope all is well

“BBC”

Please note the "Paul Emery Financial Endorsed" reference source!

https://mishtalk.com/2017/05/12/california-banker-views-from-the-business-bankers-chair/