Collapse of financial institutions is just part of a disturbing failure of leadership in the business segment of society. It is part of a wider crisis of leadership at all levels of society, but is the most immediate and potentially dangerous right now. The business world pushed by government has capitulated to greed and deception and has put people in financial jeopardy. Sadly, all this plays to a conundrum identified by David Lillenthal, Big business is basic to the very life of this country; and yet many--perhaps most--Americans have a deep-seated fear and an emotional repugnance to it. Here is monumental contradiction.

The financial debacle is serious but ultimately small change compared to the cost of unnecessary programs to deal with non-existent global warming, natural climate change and many other so-called environmental problems. 

As Louise Gray explained in The Daily Telegraph, 17 September 2008 about the problems facing Britain, ”We are looking at something that looks like a slow motion train crash,” Fells said, accusing the government of vacillating over climate change and energy policy, starving the power industry of direction and reducing investment to a minimum.

Business with collusion from government began the capitulation when it surrendered to the bullying of environmentalists. It was exacerbated when they exploited the opportunities to make money from peoples’ fears and lack of knowledge, but none of which resolved any problems. In the long run, this will be more devastating and costly to political freedom and global economies. It is already costing the poor people of the world with higher costs or even complete unavailability of the very basics of life. It is more than mere financial greed, which people despise but expect. It includes greed but is also deliberate and cynical exploitation.

Enron has become synonymous with corporate corruption and a major part of that was with the shell game that are carbon credits. They and British Petroleum (BP) exploited the environmental issue of alternative energy and carbon credits before global warming was even a full-blown myth in the public domain. Before the company collapsed under the weight of financial scandal, Enron under CEO Ken Lay was a key proponent of the cap-and-trade idea. So was BP’s Lord John Browne, before he resigned last May under a cloud of personal scandal. In August 1997, Lay and Browne met with President Bill Clinton and Vice President Gore in the Oval Office to develop administration positions for the Kyoto negotiations that resulted in an international treaty to regulate greenhouse gas emissions. In his book, The Green Wave (Capital Research Center, 2006), author Bonner Cohen notes that the companies expected to profit handsomely from the Kyoto global warming treaty by creating the worldwide trading network in which industries would buy and sell carbon emissions credits. Source: Foundation Watch, Capital Research Center, “Al Gore’s Carbon Crusade: The Money and Connections Behind It.” By Deborah Corey Barnes

Citizens of California paid dearly for Enron’s machinations. The meeting between Clinton, Gore, Lay and Browne to discuss Kyoto and carbon credits established the framework. Since then many businesses have decided the swindle is so entrenched that they might as well exploit opportunities to make money regardless of the greater good. T Boone Pickens pushes wind power as if it can bridge a gap or provide a longer-term solution, but it can’t work. Massive government subsidies help, but more importantly it provides a nice green shield for the natural gas, coal and oil from which profits will flow, so his second and third billion will be easier.

For a years now, I have watched a disturbing trend in business. When they are making money they tell government to leave them alone, but when they are losing money they plead for government help. In the environmental game, I’ve watched business capitulate and become duplicitous. You can argue they have been bullied into capitulation, but in doing so they have put self-interest and profit ahead of logic, the truth and what is best for people and their country. For example, why would Exxon apologize for and withdraw funding from research to determine what the climate is actually doing when it is essential to their business to know? Surely Exxon shareholders would expect the company to do the research necessary to protect and maximize their investments. Why would oil companies fund agencies that are openly advocating their demise? 

As a climatologist concerned about the impact of climate change on the human condition, I used to joke about understanding serious weather problems, such as how frost in Brazil occurs on a shelf in my local supermarket in Canada to push up the price of coffee in the jar. Conversely, when there is good weather and a bumper crop there is no similar immediate decline in the price of the coffee. So the cause is not a matter of supply and demand in the short term whether there is frost or a bumper crop. If the price is rising in anticipation of a shortage, then that is pure unadulterated gouging.

There are many examples of my climate challenge. Frost striking oranges in Florida almost immediately drives up juice prices in the dairy section. However, it is not humorous or an academic interest anymore. A more troubling example of the syndrome that confounds climate and economics has recently occurred. This time it is heating not cooling. With the recent concern about global warming due to carbon in the atmosphere the price of gasoline kept rising. It was incorrectly said to be supply, but there is no shortage of supply and no change in demand. Yes, the concept of declining supplies has been thrown about, but it needs perspective. First, in a bizarre twist it is to the benefit of the energy companies and the environmentalists to push the idea. One so they can increase price and profit and the other so they can force the move away from fossil fuels. In fact, there is no medium or even long-term shortage. They tried to say we were running out of cheap oil, but even that isn’t true in the short term, besides it defines how you define cheap.

The price of oil dropped by almost 40% from July to September, yet it only moved down by about 3% at my local pump. We hear it takes time because the gasoline at the pump was bought at the higher price. I am prepared to accept that however, the lie is exposed when a singular event causes an overnight jump in price for gasoline already at the pump. Proof of the deception was provided when claims that hurricane Ike was going to damage drilling platforms offshore and shut down refineries along the Texas Gulf coast. Prices jumped significantly at the pump overnight across North America. At my pump it jumped 8%. No, what is going on here is pure unadulterated gouging and it is being done without shame or apparently without conscience.

There is a tendency to focus on the wrong issue simply because of making general statements. For example, people say I don’t like paying taxes. Actually, everyone realizes if we have government it requires funding so taxes are necessary. What we really don’t like is how the government spends (wastes) our money. The same is true of business and profit. Nobody objects to profit, what we object to is excessive profit. Nobody objects to executive compensation, what we object to is excessive compensation. All these issues leave the individual powerless and frustrated. The only weapon they have is government intervention, yet they also know more government is expensive and not the answer. It is clearly not the answer for business because more regulations and taxes increase the cost of doing business. This is particularly true if the government has an anti-business ideology. It would be true if the environmentalists have their ideology totally dominate government. As Mason Cooley said, “Commerce is greedy. Ideology is blood-thirsty.”

Really troubling outcomes of these actions are that they may destroy the very institutions they represent. People have a very low opinion of politicians for similar poor performances and self-aggrandizement, but unless they are megalomaniacs they do little long-term harm. As cynical wisdom has it, “If we get rid of this bunch of scoundrels, we just get another bunch of scoundrels.” However, misuse and abuse of the financial system undermines capitalism, the very institution that has created better quality of life and freedoms for all the people, and allows socialists and communists to take over. As Milton Friedman explained, What kind of society isn’t structured on greed? The problem of social organization is how to set up an arrangement under which greed will do the least harm; capitalism is that kind of a system. Abuse of environmental issues by business combines with its exploitation for political and financial gain of environmentalists to place the entire concept in jeopardy.  The environment is important and making sure it is not harmed is critical, but when the public find out what problems do not exist or have been manipulated and exploited they will say, we don’t believe anything you tell us.

Perhaps the saddest comment of all is that business and industry have the capability to deal with environmental issues. Environmentalists consistently fail to offer meaningful solutions and lack the necessary management and organizational skills. They are armchair environmentalists who don’t understand the science, want to tell other people how to live and think government can solve all problems. Too many in the business world have adopted the same positions. However, before rushing to judgment we need to keep perspective by putting people in place who understand what John Henry Boetcker identified; You cannot strengthen the weak by weakening the strong. You cannot help the wager by pulling down the wage payer. You cannot help the poor by destroying the rich. You cannot help men permanently by doing for them what they could and should do for themselves..

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