Brian McGraw

By Myron Ebell and Brian McGraw

President Barack Obama’s choice of Jeffrey Immelt, chairman and CEO of General Electric, to head his new Council on Jobs and Competitiveness demonstrates once again how clueless the president is about the economy. Having not caused enough damage in the past few years, Obama is doubling down on policies that are slowing the still fragile economic recovery. If the president really wanted to help the economy and create jobs, he would do the opposite of what Jeffrey Immelt has done at General Electric and has advocated for national policy.

As head of General Electric since 2001, Immelt has spent a decade driving what was once one of the greatest companies in the world into the ground. Under legendary CEO Jack Welch, General Electric’s stock rose from $5 a share in 1991 to over $40 per share when Welch retired in 2001. As Welch’s successor, Immelt has halved the value of General Electric over the last ten years, whose stock value has not exceeded $20 per share since late 2008. Despite his unsuccessful tenure at General Electric, President Obama is now giving Immelt free-rein to do the same to the American economy.

On broader issues of economic policy, Immelt is the perfect model of a crony capitalist. Instead of building his company to succeed in a competitive free-market, he has devoted most of his efforts to securing handouts, special deals, and subsidies for various General Electric businesses in Washington D.C. This is clearly what attracts President Obama to Immelt, a savvy political operator despite being a bust as the head of General Electric

Even more, Immelt, along with James Rogers of Duke Energy, has been among the biggest business promoters of cap-and-trade legislation. Cap-and-trade is now dead, but had it been enacted it would have been the biggest hit on the U.S. economy and on working Americans ever perpetrated by the U.S. government. Cap-and-trade would benefit many of General Electric’s businesses at the expense of American workers and consumers. This was no secret. As then-candidate Obama said in 2008, “electricity rates would necessarily sky rocket” under the proposed legislation supported by both Immelt and Obama.

Though cap-and-trade is dead, the Obama administration has decided to ignore Congress and pursue harmful energy-rationing policies through regulatory fiat. The EPA’s regulation of greenhouse gas emissions will bring higher energy prices and less money in consumer’s pockets to spend, causing an immense strain on the fragile budgets of American families during a recession. Higher electric rates will also make American manufacturing even less competitive with its foreign rivals, leading to the mass export of America’s manufacturing jobs.

In short, Immelt has put into practice at General Electric policies that are hurting his company, his shareholders, and his workers. He has advocated national economic policies that would do the same for America. As a reward for all of this, President Obama has selected Immelt to head yet another PR effort that will do nothing to roll back any of the job-killing policies enacted by the Obama administration.

This piece will be featured in the print edition of  The Tea Party Review (teapartyreview.com).

TerraChoice, an environmental marketing and consulting firm, released a report recently identifying a troubling trend in the marketplace for “green” products. The green marketplace has exploded in the past few years, with their 2010 report noting a 73% increase in the availability of green products.

The executive summary of the report indicates that over 95% of products identified as green have committed at least one of the “Seven Sins of Greenwashing”. A glass-half-empty approach might report that less than 5% of products labeled “green” pass the test.

From the report, the Seven Sins of Greenwashing:

1. Sin of the Hidden Trade Off

2. Sin of No Proof

3. Sin of Vagueness

4. Sin of Irrelevance

5. Sin of Lesser of Two Evils

6. Sin of Fibbing

7. Sin of Worshipping False Labels

A hastily completed look at consumer preference for green products led me here, which indicates that a majority of consumers claim to prefer green products, but aren’t nearly as willing to cough up the extra dollars for green products.

Buying Green? The report stated that Big Box Stores (Target, Wal-Mart, etc.) are most likely to carry products that live up to their “green” labeling, though even significant improvements from a 95% failure rate aren’t very promising.

Politicians using Q&A sessions to promote talking points and push half-truths is rarely worth looking at, though Grassley’s skillfull balance of promising everything to his constituents is an exception:

5. How would you lower or eliminate the federal budget deficit?

According to the nonpartisan Congressional Budget Office, a discretionary spending freeze would save $1.7 trillion over the next 10 years. This freeze can be accomplished by reducing wasteful spending while protecting vital programs. Congress should begin with a moratorium on congressional earmarks and continue with a ban on non-essential government travel. Congress should consolidate duplicate programs and terminate programs that fail to achieve intended results as determined by the administration’s Program Assessment Rating Tool (PART).

Talking Point 1 – Convince citizens that you’re serious about the budget woes of the U.S. without discussing any real way to solve it.

4. Do you think global climate change is a threat, and how would you deal with it?

If the United States acts alone to cap carbon dioxide, Americans would pay more for energy and goods, without any measurable impact on the climate. EPA Administrator Lisa Jackson testified that unilateral action by the U.S. would provide no real environmental gain. A carbon cap without including the largest emitter, China, and other developing nations, would mean lost jobs for Americans. Any effort to reduce greenhouse gases should be made through an international agreement. The cap-and-trade legislation passed last year by the House of Representatives would increase the cost of energy for homes and businesses, especially in the Midwest.

Talking Point 2 – Increases in energy costs are bad if unmet by other countries (non-committal).

8. Do you support continued subsidies for ethanol? If so, how, if at all, would you change them?

In April, I introduced legislation to extend through 2015 the ethanol blender’s credit, the small ethanol producer tax credit, the cellulosic producer tax credit and the ethanol import tariff. Extension of these policies is the right thing to do because bio-fuels offer an alternative to foreign oil and generate economic activity in the United States. Today, ethanol comprises nearly 10 percent of the U.S. fuel supply. Ethanol produced in the Midwest replaces oil from Saudi Arabia, Venezuela and Nigeria. Ethanol is good for rural economies, and a recent study found that the failure to extend the blender’s credit and the secondary tariff would result in the loss of 112,000 jobs nationwide and reduce ethanol production by nearly 40 percent. Iowa would lose the most jobs at nearly 30,000. The lapse of the separate tax credit for biodiesel, which expired at the end of 2009, also has cost jobs. Last year, 29,000 clean-energy jobs were lost nationwide and many of the remaining 23,000 jobs have disappeared with the lapse in the credit. We can’t risk a repeat performance with ethanol, where 112,000 jobs are at stake.

Talking Point 3 – Ignoring the several inaccuracies in this last question, talking point 3 involves a reminder to constituents that though he is incredibly serious about reigning in these budget deficits (and not raising energy prices), he isn’t going to cut anything near and dear to Iowa.

A question for you, Senator Grassley: What effect do you think the continued pursuit of the Renewable Fuel Standard will have on the energy prices for Americans? Instead of buying oil from foreign countries will we be spending $65.00 per gallon on fuel?

The EPA recently approved a 50% increase in ethanol blends for cars manufactured after 2006, moving from E10 to E15. This means that gas stations are now free to offer E15 as well as E10 as options at the pump. It isn’t likely that many gas stations will be taking advantage of these new rules for a number of reasons.

One important issue is that the EPA has not made it clear who will be liable for consumers who damage their automobiles by using higher blends of ethanol that aren’t appropriate for their vehicle. Automobile manufacturers are worried that they will be held liable through warranties and required to repair engines, retailers share the same concern.

The EPA has not provided sufficient details on these liability issues, despite the E15 approval:

“The EPA said in its proposed E15 label rule that it would not typically hold a fuel retailer liable for customer misfueling into any vehicle, engine or piece of equipment, provided that the station’s pumps were properly labeled. That does little to comfort retail fuel groups such as NACS, which claim that the Clean Air Act includes a provision that allows for citizens to sue retailers for misfuelings. NACS said it is concerned that misfuelings could be both accidental and intentional, and labels may not provide them with enough litigation protection. “

It is funny to see the ethanol industry so frustrated by these burdensome government-imposed regulations, while they ignore the reality that government support of their industry is the basis for much of their revenue in the first place.

In response to problems stemming from confusion at the pump, the National Association of Convenience Stores offered up a brilliant solution: “The easiest way to remedy the situation is to mandate that everything’s full-serve, that you do not allow the customer to have the opportunity to misfuel, either deliberately or unintentionally,” said NACS spokesman Jeff Lenard.

I’m surprised he didn’t mention that it would create millions of green low paying jobs. Mandating full service pumps would benefit large incumbent gasoline franchises at the expense of smaller stations. This was certainly the case in New Jersey (where full-service stations are required), whose gasoline stations were closely involved in overturning propositions to strike down these laws.