Do you “spend” savings on projects that will create future prosperity for you and your family? If you do, you are actually “investing.” Most consumers and businesses invest; we upgrade houses or equipment and we buy financial assets. We invest in mundane projects such as replacing a leaky roof, or in speculative projects such as upgrading your home office for much higher selling activity over eBay. Businesses investments are also diverse, but they often create profits, tax revenues, and most relevant today – they create jobs!
Job creation is still the key economic assignment for U.S. politicians. So why does the White House chronically obstruct business investment needing regulatory approval? And let’s drop the pretense that the executive branch doesn’t clearly signal to regulators what “the right answer” is. It does through its choice of appointee and enforces its will directly in conversation or indirectly through “mutual friends.”
There’s enough recoverable oil from Canadian tar sands to replace current U.S. imports from all hostile and unstable counties. Investment in a pipeline that would reliably bring that Canadian oil to the refineries in Texas needs Federal approval. Federal approval’s not forthcoming, even though it would create 20,000 well-paying jobs in the U.S. and improve Americans’ protection from international leaders who wish us ill. China also wants the oil and will go to great lengths to win it from Canada. Who are the regulators trying to impress?
The White House appointed an SEIU union attorney to the National Labor Relations Board (NLRB). Quickly, the NLRB embraced a union complaint that Boeing was moving some aircraft production to South Carolina as punishment for the union’s chronic strikes in Washington State. Boeing argued the labor is skilled but cheaper than in Washington. The NLRB action could kill Boeing’s business plans to invest in a large assembly plant and create jobs in South Carolina, or tilt Boeing toward investing offshore – beyond the NLRB’s reach (but not beyond the Administration’s revenge through the government contracting process). The sole Republican NLRB board member threatened to resign. His resignation would deny the NLRB the quorum it needs to reach decisions, making it non-functional, probably for the balance of the White House’s current term. Suddenly, Boeing and the complaining union reached an agreement – much as Boeing proposed before the NLRB tried to snuff the South Carolina investment and jobs. Who were the regulators trying to impress?
AT&T asked the Federal Communications Commission (FCC) for a ruling on its plan to merge with T-Mobile. AT&T wanted the spectrum held by T-Mobile so it could expand its investments in 4G LTE (an advanced wireless service) to cover 97% of the U.S. population, going beyond AT&T’s current customer coverage to include all 34 million of T-Mobile’s customers and an extra 55 million customers covered by neither carrier. Neither T-Mobile nor its parent (Deutsche Telekom) has funds to make the upgrade to 4G LTE. The FCC released a staff report on AT&T’s proposal, that featured the usual anti-carrier allegations (less competition, higher prices) but the report ignored the density of actual competition even after the merger, the benefits of offering a 4G LTE alternative to 97% of the population, and the obvious counter-moves by AT&T’s competitors to ratchet up quality (Sprint with Clearwire, and Verizon with Comcast and Time Warner’s spectrum). Instead, the FCC separately concluded that the Universal Service Fund (i.e. money the FCC skims from consumer bills) should be used to upgrade wireline Internet access in FCC-specified areas – such as some that AT&T/T-Mobile proposed to serve. The FCC behaves as if investment is good when government specifies how and where, but bad when the private sector makes a business decision. Who are these regulators trying to please?
Gibson Guitars in Tennessee was raided by Federal Dept. of Justice agents using SWAT gear and weapons – not about a violation of U.S. law, but about Justice’s pettifogging interpretation of India’s law governing how some special woods should be “finished” by Indian craftsmen, not by U.S. workers. Gibson did nothing wrong: they followed the regulations for buying special decorative woods. Gibson deserves applause, not harassment. Jack-booting Gibson’s workers comes from Dept. of Justice employees who lack a full unit of meaningful work. Instead of raiding and halting American manufacturers, perhaps they can go recover the automatic weapons that Justice gave to the drug cartel in Mexico. Fast and Furious my foot!
Alan Daley is a retired businessman living in Florida. He follows public policy from the consumer’s perspective.