Statutory Unemployment

Wednesday, September 29, 2010

Some time ago, I reacted to legislation that made the old, but perfectly good car I was driving at the time obsolete, for all practical purposes. I called the effect "statutory obsolescence," likening it to a short-sighted approach to manufacturing, called "planned obsolescence," that a former auto worker once told me about. I then brought up the very real possibility that a certain type of "businessman" might support such legislation, seeing a range-of-the-moment "advantage" of the effect, like a goosing of the sales numbers for new units.

While I think the story behind the trouble American car companies were having back then is a little more complicated than he made it sound, I would not put such practices past businessmen in certain industries, given the unfortunate pervasiveness of pragmatism within our culture.
I suppose I can feel grim satisfaction in, once again, being right about a "gut feeling" of mine: General Electric, the very company founded by the inventor of the light bulb, put its weight behind passing the legislation (HT: Paul Hsieh) that will outlaw the Edison bulb by 2014, unless repeal efforts succeed. Here are a few speculations from a news story as to exactly why and to what degree General Electric chose to betray the memory of Thomas Edison:
  • GE supported the regulations. Many Winchester workers, noting that the CFLs are made in China by lower-wage workers, say GE wanted to force the higher profit-margin bulbs on consumers, and Winchester is collateral damage.
  • ... GE had opposed early regulations that would have totally banned incandescent technology, but supported the efficiency standards as less bad. "As long as you know that the legislation is coming one way or another," she said, "you want to influence it in a way that makes sense for your customers and your business."
  • Teresa Golightly, after working her last shift Thursday, said GE CEO Jeff Immelt supported the rules to cozy up with politicians: "He got on Obama's economic team. I feel like we were sold out."
  • But one worker, who went out of his way to talk to me, said the regulations are just a "scapegoat." GE wanted to send their jobs to Mexico, and the regulations provide political cover. [bold added]
Most interesting to me is the gutless desire to get political cover for the loss of jobs related to closing a U.S. plant -- something the company has a right to do. But might the inordinate expense of continuing operations there have been, at least in some part, due to past failures by the company to oppose other regulations, such as the Wagner Act (or any number of environmental or energy "efficiency" laws), that drive up the cost of doing business?

In any case, it is staggering to see the management of a company whose industry its founder practically brought into existence single-handedly functioning in almost every way like every shopworn (but wrong) stereotype of (real) businessmen as near-criminals. Rather than offer cheap, quality products to customers who may take them or leave them -- a proven strategy for success -- GE is forcing junk on customers at gouging prices, making back-room deals with fat cat politicians, and saying "we can't help it" when some of those deals make it hard for them to continue doing some of its business the honest, productive way.

-- CAV

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