Today's Topics:
On Trees and Farms
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Date: Mon, 14 Jul 1997 14:55:29 -0600
From: swally@earthlink.net (Wally)
Subject: On Trees and Farms
=46or many years I favored business as more efficient than government,=
however my experience observing greed as the controlling factor in several=
companies, General Dynamics, Rohr Industries, and Boeing has changed my per=
spective.
I know the following examples are not about trees or farms but they give my=
perspective on some large corporations. My main point is that companies=
such as General Dynamics and Rohr cannot be trusted with ethical questions.
If a project couldn't show a profit in a year or 18 months, it was scrapped=
(General Dynamics, Rohr Industries) eliminating R&D and the company library=
.
I therefore favor a long term capitol gains tax benefit.
General Dynamics former Chairman Bill Anders sold the stockholders a=
proposal that if stock price went up 10 points and stayed 10 days, he and=
24 others execs would receive a bonus equal to a years salary. He received=
three such bonuses in three months.
General Dynamics owned Cessna Aircraft which they wrote off as zero book=
value and worthless. They then sold Cessna and declared the sale price as=
part of the earnings for the third quarter rather than a reduction in=
assets. They said this gave a 40 % increase in earnings driving the stock=
price up again.
The company built up a surplus in the retirement fund, mainly from employees=
leaving the company before age 65. This retirement was funded by government=
contracts assuming employees would stay to age 65. The company then sold=
the retirement obligations to Prudential and Metropolitan Life, including=
sufficient money for their minimum obligation. After all retirees=
obligations except executives are sold, they then transfer the remaining=
money to general company funds. I mainttain this money should go back to=
the government as an overpayment.
At Rohr, an inspector suspected a wing fairing for DC-8 jet had a cracked=
internal support bracket, so had it XRAYED and verified it was cracked. The=
inspector wrote a rejection tag for the cracked part. Engineering decided=
that it would cost more to take it apart and repair it than replace it with=
a new part. Inspection supervision voided the tag saying XRAY was not=
required for this part. But it cost American Airlines 10 times as much to=
repair the part as it would have cost Rohr.
Concerning recycling costs, I agree with a previous writer that it could be=
much more effective to reduce the amount of extra material used in=
manufacturing, trimed and thrown away, thus reducing cost of material used=
and producing less waste.
>Steve,
>
>Doing a bit of catching up myself these days, I read and re-read your=20
>commentary on the dollars vs. something else ideology and felt that a=20
>response was necessary. I agree with you that the dollars issue is a=20
>very important one, --one that most environmentalist want to push aside=20
>by saying something akin to "there must be a better way." These notions=
=20
>are usually followed by a type of attack on capitalism that encapsulates=20
>this "there must be a better way" ideology in pie-in-the-sky notions that=
=20
>capitalism can somehow be done away with for the betterment of society. =20
>My recent debate with Rick Anthony at the last CRRA Conference,=20
>nominally moderated by Neil Seldman, captures the essence of this. =20
...
> As anyone who has read Richard White's Changes in the Land can=20
>attest, capitalism has a permeating influence on the societies it=20
>touches--this influence continues to be ignored by most who identify=20
>themselves as environmentalists. They would rather will away the=20
>impact capitalism has had on our society than work with it. Working=20
>with capitalism is not inherently evil, as most environmentalists=20
>would believe, especially if it involves the changing of people's=20
>behavior. One of the greatest problems we face is internalizing=20
>ternalistie--something that has slowly come about in the last two=20
>congresses. Agricultural subsidies have been erased in many areas,=20
>resulting in wholesale changes in the economies of many areas. Look at=20
>Hawaii, whose subsidized sugar economy all but evaporated in the last=20
>four years when Congress pulled the sugar subsidies. This is working=20
>with capitalism, where the true costs of a program are re-asserted in=20
>the market.
> Getting back to your issue about it all comes down to money--it=20
>does, and any solution that respects our environment should be built=20
>around this reality. In my debate with Don Orr, he talked about all of=20
>these non-identified alternatives to logging--we could, we should\=20
>there can--but he never got down to specifics. Part of his problem was=20
>that by acknowledging the weakness in his no tree cutting ideology, he=20
>would have to support plastics (oil exploration) or metals (mining) even=20
>if his ideal of keeping global resource utilization even in spite of=20
>population growth were to be realized. Don Orr, like many idealists,=20
>ignore or blatantly disregards the power of market economics. rather=20
>than altering behavior through price, he wants to disengage from the=20
>debate altogether. =20
> We can not disengage from capitalism. It is a fact, and in one=20
>of the most capitalist countries in the world, the United States,=20
>capitalism has led to us, the American people, spending twice as much as=20
>any other nation on the face of the earth on environmental quality. =20
>Sweden, Norway, and Canada may talk a good game, but when it comes to=20
>putting our money where our mouth is, the US of A does twice as much as=20
>anyone else. These are not the rantings of a conservative=20
>environmentalist, these are facts which can be checked.
> My point is that to achieve our goals of lowering resource=20
>depletion, we must use the markets--we must internalize that which is=20
>externalized. This is eminently possible, but it also requires that the=20
>environmentalist goals be held up to outside scrutiny. We must be=20
>willing to accept criticism (like this note) constructively--learning=20
>from our mistakes and moving on. In your broadside that stimulated this=20
>response, you mentioned three publications, Earth Island, Newsweek, and=20
>Scientific American. Only one of these sources is refereed--meaning that=
=20
>the statements contained in the articles had to stand up to peer review=20
>before being published. The other two sources are therefore dubious at=20
>best. Am I saying that Earth Island and Newsweek would publish articles=20
>that the publishers knew to be untrue--maybe--but we must remember that=20
>both organizations are in the business of selling their products--it is=20
>no mystery why the American Environmental History Review is not a best=20
>seller, nor why it can not be found on most news stands.
>
> The first step towards stopping greenhouse gases and other=20
>resource depletion is to put these ideas before a critical audience and=20
>accept what the peers as about our evidence. Once armed with a=20
>consensus, we can then move forward to internalizing those costs which=20
>are presently externalized. Wishing them away, or hoping that public=20
>pressure will overcome market is, in the long run, merely pissing in the=20
>wind.
>
>
>Bill McGowan
>UCSB
>Rincon Recycling
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End of GreenYes Digest V97 #167
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