Regulation is About Protecting Incumbents
Darin Morely sent me this. Woe be it to the upstart competitor with a new business model who challenges an incumbent with political connections. This goes double when the incumbent is the government itself:
One of the great things about the web, obviously, is that it allows for much more efficient communication that opens up new and useful offerings. For example: the web offers the ability to find other people traveling to the same general place you're heading and to set up a convenient carpool. It's good for the environment. It's good for traffic. It just makes a lot of sense. Unless, of course, you're a bus company and you're so afraid that people will use such a system rather than paying to take the bus. That's what happened up in Ontario, as earlier this year we wrote about a bus company that was trying to shut down PickupPal, an online carpooling service, or being an unregulated transportation company. TechCrunch points us to the news that the Ontario transportation board has sided with the bus company and fined PickupPal. It's also established a bunch of draconian rules that any user in Ontario must follow if it uses the service -- including no crossing of municipal boundaries -- meaning the service is only good within any particular city's limits.
All of us in the states need to be prepared for more of this corporate economy thing in the US. I saw last night on Sunday Night Football that NBC is really going hard on some green initiative, including having a green peacock. GE (parent company of NBC) is a smart company and sees the writing on the wall. It understands the new administration and Congress seem hell-bent on moving us to a more European model. In that model, there are 10-20 corporations per country that insinuate themselves into government and get the opportunity to help run the country to their own benefit. GE wants to be one of these chosen few. The push is going on not just at NBC, but in light bulbs (betting on Congressional action to provide regulatory support for a new type of bulb they have invented) and in power systems (who are making large bets on wind that will not pay off without a government subsidy program).
In the near term, GE may need a bailout in its financial arm. GE must have seen that GM made a huge public push for its Chevy Volt over the last 6 months, spending hundreds of million in advertising on a car that does not exist yet. Why would a company near bankrupcy do this? We now know the advertising was aimed at Congress and the Administration, not consumers, trying to burnish their green image to give Democrats enough political cover to vote for the bailout their UAW supporters so desperately need (any chapter 11 would likely result in enormous restructurings of union contracts).
