As the economist Milton Friedman once said, “The business of business is to make money.” True enough, but it is also true that as long as there are governments that regulate, there will be businesses whose business is to grease the levers of power in hopes of scoring exemptions.
Given this, it’s too bad that the financial media often neglects the politics behind business, providing us with only the occasional quotes of some politicians’ meaningless sound bite. As the political fallout from rising gas prices continues to grow, rare is the column or news report that does much more than recount a political press conference held in front of a gas station, or blandly recite the various proposals floated by Congressmen playing to their television audiences.
The events behind these photo ops are infinitely more interesting and complicated, as evidenced by a piece in the latest issue of the New Republic. Reporter Michael Crowley examines the case of Texas Representative and House Energy and Commerce Committee Chairman Joe Barton, who has placed himself at the center of the public controversy over $3 a gallon gas prices and accusations of price gouging by the oil companies.
It’s a commonplace of American political life that whenever people become concerned over gas prices, Congress drags oil industry execs before the cameras and slaps them around a bit. But there’s a new sheriff in town, and as head of the House Energy and Commerce Committee, Barton is refusing to bring the bigwigs in. “We’re talking to them privately now,” he recently said, “And I haven’t definitely determined that we’re going to bring them up in public as a group.”
Barton has long been a friend of the energy industry, and a recipient of its generous campaign contributions. In July 2005, Crowley reports, he helped write an energy bill that granted $14.5 billion in tax breaks to producers.
During his tenure in Congress, Barton has also been responsible for “electricity deregulation (a boon for the likes of Enron) and opposing price controls during the recent California power crisis. Perhaps not coincidentally, he also began raking in campaign cash from industries like oil, gas, coal, and electric utilities—nearly $2 million since 1997,” according to Crowley.
But Barton’s ties to the energy industry go even deeper. Crowley notes that in May 2002, Tom DeLay’s daughter Danielle held her baby shower at the Washington offices of Reliant Energy, a Houston-based power company. “The shower’s organizer was Debra Whiddon, a friend of Barton’s from Texas whom Reliant hired into a lucrative lobbying job at the representative’s suggestion…Shortly after becoming chairman, Barton hired Reliant’s top Washington lobbyist to be the Energy and Commerce Committee’s chief of staff. As of last August, Barton held around $15,000 in Reliant stock. And, since 2001, Reliant has donated nearly $50,000 to Barton’s political accounts. Perhaps not coincidentally, Barton took care to kill a Senate-passed provision in last year’s energy bill that Reliant adamantly opposed, according to The Wall Street Journal.”
Now, the current crisis over high gas prices has many causes, from increased demand from India and China, to the maxing of global pumping capacity and continuing instability in Africa and the Middle East. But there dimensions to the problem that we are missing, and cases like Barton’s show that there is a lot more going on in Washington, DC, than immediately meets the eye.
And that seems to call for reporters to start asking questions worthy of deeper contemplation. Yet, reporters continue to ignore the political side of the equation. Just today, for example, we see the USA Today’s Matt Krantz take an otherwise long, hard look at gas prices without mention of the goings-on in Washington.
We don’t mean to single out Krantz. He is hardly the only business writer to shy away from the murkier realm of politics. Which is too bad, because the real world is not divided into Section A and Section C.