George W. Bush promised in his State of the Union address Tuesday to keep the American economy growing “not with more government, but with more enterprise.” In fact, what he proposed in the House chamber on domestic policy constituted a partnership between “more government” and “enterprises” though not free enterprise.
Specifically, some parts of President Bush’s speech, pushing incentives and subsidies for energy and environmental technologies, ran a near perfect parallel to the recent corporate initiatives of General Electric – the company that spends more than any other on federal lobbying.
In 2005, General Electric launched an environmental and energy initiative they call “Ecomagination,” complete with advertising campaigns featuring Cat Stevens songs and leafy green montages. While pitched to the press as a commitment to corporate social responsibility, Ecomagination and other GE initiatives are about profiting from government regulation, mandates and subsidies.
On energy policy, President Bush declared that “technology is the way forward,” and called on Congress to foster development of nine specific technologies. General Electric is already deeply invested in almost all of these technologies, and so would profit richly from any Congressional action – presumably direct subsidies, mandates, or at least specially targeted tax credits.
President Bush urged congressional action to promote: (1) “even greater use of clean-coal technology”; (2) solar; (3) wind; and (4) nuclear power.
GE, together with well connected energy giant Bechtel, has launched an ambitious partnership to build coal gasification power plants. Such plants are much more expensive (at least 20 percent according to industry experts) to operate than standard coal power plants, and become profitable only with subsidies or other government favors. Specifically, GE has figured out how to capture the carbon dioxide emissions from these plants, and now is lobbying on Capitol Hill for mandatory limits on CO2 emissions – thus driving demand for their costly coal plants.
On the other energy technologies, the president and GE are also on the same page. The 2005 Ecomagination report lists wind energy, “photovoltaics” (solar power) and biofuels as research and development priorities. These technologies can be profitable on a large scale only with the sort of government favors the State of the Union implicitly called for. GE is already “one of the world’s leading wind turbine suppliers” according to the company’s Web site, and is “involved in a $27 million partnership with the U.S. Department of Energy to design a next-generation offshore wind turbine.”
Pushing nuclear energy is good for GE, too. MSN’s “Money Central” advised readers to cash in on growing demand for nuclear energy by buying stock in GE, “a leader in equipment and services used in nuclear power generation.”
The president also pushed for incentives for (5) “battery research for plug-in and hybrid vehicles,” and expanded use of (6) “clean diesel” and (7) biodiesel. This month at the North American Auto Show, GE and General Motors jointly unveiled the Chevrolet Volt – a next-generation hybrid vehicle that can go 40 miles each day on purely electric power. The Chevy Volt can run on biodiesel, allowing GE to cash in on the president’s proposed incentives there. GE already makes a “clean diesel” train, and has been selling it to foreign governments.
Alas, it seems GE is not a leader on ethanol, Bush’s eighth touted technology, but seven out of eight ain’t bad.
Like ethanol, many of these “good for the environment” and “next-generation” energy sources may not be good for the environment nor reliable, affordable sources of energy. While taxpayers foot the bill for the federal incentives and subsidies, and customers pay higher prices following mandates, GE cashes in.
Again, GE is Washington’s most prolific lobbyer. According to the Center for Responsive Politics, GE spent $118.4 million on lobbying from 1998 through 2005, more than any other company. In 2005, GE lead the pack in corporate lobbying, at $24.2 million, nearly twice as much as notorious Altria spent on influence.
The cause-and-effect relationship between GE’s investments, GE’s lobbying and Washington’s policies is probably a complex one. GE is also a famously flexible, diversified and dynamic business. If executives see that government policy is likely to move in a specific direction, GE can make sure it is there, waiting to profit from the policies when they arrive. This is probably a large part of what drives initiatives such as Ecomagination.
But with its behemoth lobbying budget, after GE has bet on a policy – such as subsidies for windmills – GE can make sure those policies are, in fact, put in place and kept in place.
If Tuesday night was any indication, the state of GE is strong.
Examiner columnist Timothy P. Carney is the author of “The Big Ripoff: How Big Business and Big Government steal your money.”