Intersection of economics and politics: a look at ExxonMobil
ExxonMobil has been the target of much criticism for failing to comply with environmental standards, for neglecting to take responsibility for the numerous oil spills it has failed to prevent, for aggressively lobbying policy-makers to deregulate the oil and gas industry and relax environmental standards, for benefiting from corporate tax codes that privilege the rich, for manufacturing scientific skepticism about anthropogenic climate change and resisting global efforts to curb the emission of greenhouse gases, and so forth.
Explain one example in which ExxonMobil has exerted its economic power—as one of the largest corporations in the world—to influence politicians in Washington and shape public policies or foreign policies favorable to their particular corporate interests. The following are some questions that should guide your response: (a) what were the stated goals of ExxonMobil executives, (b) what policy alternatives would the company have been willing to accept, (c) what was the final result (what policy alternative was chosen), (d) how was the company able to influence policy-makers, and (e) what were or are the ramifications of the chosen policy to average Americans?
After briefly discussing these specifics, the bulk of your response should explain whether the ability of powerful corporations like ExxonMobil to influence the public policy process is a problem. If so, then why should we be concerned about, and how might we effectively prevent, this intersection between economics and politics? If not, then why isn’t this intersection a concern—how do the benefits of the influence of corporate special interests outweigh the costs?
Critical Deliberation 
Exxon Mobil- Practicing Their Rights or Infecting The Globe?
Exxon’s reputation under former CEO Lee Raymond, most notably, has been one defined by lobbying for the de-regulation and disregard of environmental standards in order to sustain large capital returns (Herrick 2001).
The Kyoto protocol of 1997 was an initiative aimed at developed industrial nations to commit parties involved to cut greenhouse emissions. The US, while involved in talks did not ratify the treaty. Mr. Raymond argued “costly restrictions and regulations are a bad idea, especially when their need has yet to be proven, their total impact undefined, and when nations are not prepared to act in concert” (Herrick 2001). The only alternative to the Kyoto protocol Exxon was willing to accept was a tax on the Kyoto accords on the basis of economic un-fairness grounds (Coll 2012). Exxon funded lobbyist campaigns that attacked the Kyoto protocol and the science associated with global-warming (Coll 2012). Ramifications of the US neglecting the treaty are unclear, as countries like Australia, Canada and more who did engage in this treaty have not reached their quotas where as some countries like Russia and the UK have, all the while public support for the green movement has gained momentum (Clark 2012).
The intersection between economic power and political power can be bad and it can be very good. While the example above is certainly a negative externality of powerful corporations using their deep pockets to change and/or impact legislation, not all corporate lobbying is made equal. For example, in 2005 Mary Kay, a women’s beauty conglomerate, urged congress to reauthorize the Violence Against Women Act, advocating more than 500 million federal funds be used to stop violence against women (Peterson 2009). The lobbying came to fruition with President Bush reauthorizing the act. With that being said we can tell that Exxon’s effect on the Kyoto protocol may have been successful. Public sentiment against environmental deregulation has grown, but CO2 emissions have as well, and half the countries involved in the treaty have been polluting more rather than less (Clark 2012). Lobbying then is of paradoxical nature, however overall I defend its purpose. It would be unconstitutional to restrict lobbying of some types, oil, and allow it for others. Therefore in order to protect the benefits lobbying can produce, we must allow lobbying of all types.
A counter-argument would be that because lobbying can create devastating outcomes, that that is enough reason to restrict it. If Corporations like Exxon can directly affect the health of the earth in order to bolster their pockets this practice of lobbying should be stopped for the human race. If we were to restrict Exxon’s voice as lobbyists we would also have to cut off the lobbying voices of their biggest competition such as green peace and other environmental protection advocacy groups in my opinion. If we are a society that values freedom of speech and expression in their purest forms we cannot restrict Exxon from promoting its “values”.
Clark, Duncan. “Has the Kyoto Protocol Made Any Difference to Carbon Emissions?” The Guardian. 26 Nov. 2012. Web. 17 Feb. 2015.
Coll, Steve. “How Exxon Shaped The Climate Debate.” PBS. 23 Oct. 2012. Web. 18 Feb. 2015.
Herrick, Thaddeus. “Exxon CEO Lee Raymond’s Stance On Global Warming Causes a Stir.” Wall Street Journal. 29 Aug. 2001. Web. 18 Feb. 2015.
Peterson, Kyle. “Lobbying for Good (SSIR).” Lobbying for Good. Stanford Social Innovation Review, 2009. Web. 18 Feb. 2015.
Exxon Mobil Is Replacing Our Democracy: Not All Lobbyists Are Equal
Response to Patrick
I argue that the current relationship between politics and economics in America is an absurdly flawed one. It would be unconstitutional to not restrict the political power of corporate giants like Exxon Mobil, whose policies threaten our safety and democratic values.
Democracy and capitalism feed into one another because they share the same competitive nature. This makes it virtually impossible to take the money out of politics. The consequences can be very severe and result in an oligarchy. Patrick points out the paradoxical nature of lobbying. There are lots of great social benefits new policies can create. Oppositely, there are a lot of social costs some corporate policies incur. Patrick argues, like every other freedom loving American, that is unconstitutional to discriminate against political action. He, just like every other freedom loving American, is correct. I fear this strict constructionism disenfranchised the commonwealth and placed all the political power in super industries such as energy, telecommunications, oil and defense.
This would not be the first time the oil industry took control of the government. The era of corporate capitalism in the early twentieth century was a time famous for its robber barons. In a nutshell huge monopolies reeled in absurd profits while ignoring workers rights. Workers had no time or money for political action. For a couple decades, a few firms controlled the American institutional settings. Unsurprisingly, they did not act responsibly and tanked the economy at huge global costs. After a long history of institutional adjustments, we finally arrived at the same place we were a hundred years ago, if not a little worse.
What makes this situation worse is that we were trying to prevent it from happening. We know firms are economic actors; therefore, they are in infinite pursuit of greater profits. We learned the intersection between the vertical and horizontal dimensions of political economy encourage economic actors to influence the political system. Favorable tax codes, labor laws, and financial and environmental regulations are all adjustable settings that lead to greater profit for firms at costs to society. We learned from our mistakes and voted on policies that would regulate firms and prevent them from dual integration.
Sadly today, we are back under the control of the oil industry or else why would President Obama have said, “Let’s be the generation that finally frees America from the tyranny of oil”? Struggles with Vietnam and a spike in oil prices led to new policies under Reagan that allowed super mergers. Exxon Mobil was one of these companies. Currently they are the second largest corporation with four hundred and thirty-eight billion in revenue in 2013 (Fortune). How does this translate into political power? It is pretty clear in fact. “The oil industry spent more money to get the George W. Bush administration into office in 2000 than it has spent on any election before or since. In return it received, for the first time in American history, a president, vice president, and secretary of state who are all former oil company officials” (Juhasz). Exxon Mobil spent about thirty million dollars in lobbying in the 2008 election year (OpenSecrets). Exxon Mobil has two main goals it wants the American government to help it accomplish. First, produce more oil at cheaper costs. Second, assume no responsibility for any social costs such as climate destruction and oil spills. Does Exxon Mobil really have control over the government? Well, the Exxon Valdez spill is a good example of Exxon Mobil avoiding responsibility for two billion dollars worth of environmental damage (Holba). Furthermore, Lee Raymond adamantly denies science and anthropogenic climate change. Lastly, while the oil industry is the least popular of any other industry it’s policies are always at the forefront of the political agenda.
Our democratic values are being turned against us. While it is unconstitutional to suggest we discriminate against Exxon Mobil’s lobbying strategies, we should re examine the constitutionality of these super corporations and the legitimacy of the rights they claim.
Corporations – Looking out for themselves or for everyone?
ExxonMobil is widely regarded as an extremely controversial corporation, and by studying the actions and policies it implements, we can formulate a better understanding of how they are indeed operating within their legal bounds and through political influence and lobbying, they remain on top of the economic power chain.
Of the various accounts of ExxonMobil’s strong economic and political influences, the Steve Coll reading provides expressive examples of their power. In this instance, ExxonMobil was adamantly lobbying against the Kyoto Protocol being signed not only by the United States, but globally as well. Touting themselves as a global entity, ExxonMobil has interest throughout the global economy and not just domestic policy. The main focus of ExxonMobil was to promote the deregulation of energy throughout the world as well as encouraging countries to tap into their own natural resources making energy cheaper as well as giving more jobs and business to large energy corporations like ExxonMobil. Although the Kyoto Protocol was eventually signed by China, the US, and many other nation-states, ExxonMobil and other major corporations including Royal Dutch Shell, General Motors, Ford, as well as DaimlerChrysler joined the group Global Climate Change to counteract any further ramifications the Protocol might inflict on large corporations. By serving as a major roadblock for energy industry-harming laws and sanctions, the coalition stood its ground against possible detrimental regulations to later be enforced. By doing this, average Americans could still enjoy relatively low energy costs as well as benefit from less regulation of the global market.
Through the massive power of large corporations, the question remains; is this inherently bad for the public? Though no answer is completely correct, after weighing the costs relative to the benefits, the arrow points towards no. By having lobbyists in Washington promoting the support of major corporations, it leads to a better, more consumer friendly market. By creating incentives within policy for large corporations success, the consumer will benefit through lower prices and more competitive global networks. “Before deregulation, power was expensive and the grid was cheap. Today, the converse is true. Power is cheap. The grid is not” (Pentland, Forbes, 2013). From an economical standpoint, allowing for corporate power and pull in politics serves to put more money in the consumers pocket and reduce the costs of goods. Another point of discussion is the example of Australia; adamant proponents on no limitations of corporate spending on political campaigns as well as the lack of political corruption threatening their vibrant democracy shows it does not have to be an issue (Kirkpatrick, NY Times, 2010).
Although many benefits can come through corporations influence in politics, there are also some inherent dangers. There is always the possibility that campaign dollars can elect the wrong person simply due to monetary bribery. Also, some form of restriction can police corruption with out impeding too much and imperiling free speech (Kirkpatrick, NY Times, 2010).
Corporations influence in politics remains a hotbed for debate, but as essential parts of the economy and citizens lives, the connections between business and policy tend to do more harm than good.
Coll, Steve. “”Is the Earth Really Warming?” Private Empire: ExxonMobil and American Power. New York: Penguin, 2012. 67-92. Print.
Kirkpatrick, David D. “Does Corporate Money Lead to Political Corruption?” The New York Times. 23 Jan. 2010. Web. 17 Feb. 2015. .
Pentland, William Graham. “After Decades Of Doubt, Deregulation Delivers Lower Electricity Prices.” Forbes Magazine. 13 Oct. 2013. Web. 17 Feb. 2015.
Don’t Turn America into an Oligopoly!
Response to Harrison
I appreciate the convictions that you have expressed in your analysis of the lobbying and policy influence of ExxonMobil and corporations like it but I believe that this analysis is flawed. You make three major points: That the average American is paying relatively low costs for energy because of deregulation, that having large powerful corporations is on the whole isn’t bad for consumers and democracy, and if I am interpreting the last sentence of your blog correctly that government shouldn’t have connections to business.
Your first argument that deregulation had brought down electricity costs for American consumers can be at least partially defeated by the pro-business Forbes article that you have cited for evidence of lowering prices. The article correctly states that it has never been cheaper to produce energy but that transmitting that energy has gotten more expensive, this means the bill that your average consumer pays to the electrical company has actually gone up. “The trouble is that while wholesale power prices have fallen dramatically, retail power prices have soared” (Pentland, Forbes, 2013) the retail price is what consumers pay so it is impossible to say that your average consumer is paying less in the last decade since deregulation when they have been paying more. It’s also important to look at other costs that deregulation can impose. Regulations many times look to internalize the cost that corporations fail to take into account, meaning harmful externalities. In the energy sector it is often environmental regulation that is contested, but the cost of a deregulated and polluting energy industry can be seen in health cost to bystanders who may be paying less for their energy bill but are about to pay out for medical expenses related to pollution.
The interests of big business and the common good don’t always have to different, but because of the profit motives that drive corporations this is often the case. The privileging of money over people, non-corporate people, has created a situation that both undermines the equal representation ideals of our democracy and the ideals of capitalism that provides high quality low cost goods to consumers. When elected officials need to fund raise for election campaigns those officials become more beholden to donors when political influence in a democracy should be given through the vote not the bill. Deregulation in big industries like the airlines or telecommunications have brought about a trend toward oligopolies where because of the post regulatory low competition in these industries a few corporations now have the power to control pricing (Lazarus, Los Angeles Times, 2013). Clearly concentrating power with a selective few, in this case corporations, is never a good idea.
The last argument that government should stay out of the workings of business is self-defeating in the advocacy of corporate influence in government. It is an untenable position to say that government shouldn’t mess with business to protect citizens but business can mess with government for its profits.
Lazarus, David. “The Myth of Deregulation’s Consumer Benefits.” Los Angeles Times. 14 Feb, 2013. Web 19 Feb. 2015.
Pentland, William Graham. “After Decades Of Doubt, Deregulation Delivers Lower Electricity Prices.” Forbes Magazine. 13 Oct. 2013. Web. 19 Feb. 2015.
Response to Harrison
I agree with you on the basis that Exxon’s external role in preventing the Kyoto protocol might have been for the in-better of Americans at that current time, Like you said, ‘Americans could still enjoy relatively low energy costs as well as benefit from less regulation from the global market”, but was their aggressive lobbying power displayed for our benefit, or for their private economic benefit. Is the spending of 100’s of million dollars to gain access to policy-makers to influence government action good for them or us?
You say having corporations lobby politics isn’t a bad thing, but I disagree. I believe the influence of large corporations in America today is detrimental to us the public and national democracy. Already 90% of our nations wealth is held by 1% of our population, this 1% controls the major corporations that have lobbying power in America. In Exxon’s case they are the currently the most successful corporation in the world and that is because of their actions with the Kyoto protocol. Mr. Raymond’s arguments pushed back the implementation, which in turn has put our current situation at a tipping point. For example, global warming effects can be seen around the US today, severe droughts in California, unusual tropical storms like those occurring in the upper east coast during this winter, and massive fires in; Colorado and California (Nasa org.). Not only did were they successful in preventing the Kyoto protocol to be enacted but they also were able to lobby for relax environmental standards.
In an article from the ABC news they claimed that Exxon spent close to 4 million dollars, just in the second quarter, in 2011 for relaxed provisions on chemical facilities, toxic substance rules, and the degradation of air quality standards (Susanna Kim, ABC News). At the same time lobbying for tax breaks that netted them a surplus of $565.3 million in tax breaks, money that could have been invested into the American public (Sussana Kim).
Exxon is just one example of major corporations influencing American policy; this influence seems to have a greater effect on public policy than any other form of democratic influence. These corporations have the assets to change quotas and affect standards in ways that only benefit them, but what about us? Why hasn’t the American people stood up and said these corporations only represent 1% of American ideals? And it is probably because the powerful corporations have the capabilities to drown out the “noise” and probably feel they are above any repercussions from the American public.
Kim, Susanna. Article. “Firms That Paid the Most in Lobbying Had Lower Tax Rates”, PBS, April 18, 2012, http://abcnews.go.com/Business/exxon-mobil-verizon-companies-spent-lobbying-lower-tax/story?id=16162792
Jackson, Randal, Nasa, Database, “ Climate change: How do we Know?”, in Nasa Global Climate Change: Vital Signs of the Planet, last edited: Feb. 10, 2015, http://climate.nasa.gov/evidence/
Response to Harrison
While externalities in the capitalist market are both assets and liabilities, it seems incredibly naïve to think that there isn’t a way to disincentivize negative externalities in the market to promote the good of society. Government mechanisms can help limit externalities that have a significant amount of negative impact on common pool goods. A great example is The Forest Reserve Act, which allowed the executive branch to section out portions of land for conservation after unregulated capitalist commercialism caused severe pollution of Niagara Falls (Duncan). Laws and regulations were extended across the United States to protect forests and create national parks from capitalist venture to preserve the intangible asset of nature for posterity. In the case of Exxonmobil, the continued processing of fossil fuels and lack of investment puts future generations consumption of clean air at risk, possibly commodifying the basic human need of clean air as can be seen in China; selling clean oxygen (Garnaut). While increasing profits seem to be the main focus of fossil fuel frenzied companies, they seem to be looking at the energy market through a very short-term scope. By the end of the century the world needs to have exited out of the fossil fuel market (McGrath). To maintain presence in the energy market, existing asset rich companies like Exxonmobil should be investing in fossil fuel divestment to be competitive in the long term (Covington, Kim). According to Schumpeter this process should be an intuitive one; having such a large share of the market, Exxonmobil’s ability to experiment in other energy sources is substantial and the only way to stay ahead of competition in a century that seems to be pointing toward a creative destruction phase in the energy markets; it’s the industrial period again, and Exxonmobil is advocating for maintaining the horse pulled cart instead of looking into the building of railroad locomotives; initial costs are high, but worth it in the long run. So yes, when corporations look out for themselves they look out for everyone, Exxonmobil is failing to even look out for itself. Compounding assets and lowering costs is only an economic way of looking at benefits for consumers, negative externalities created by pollution raise health costs that are not restricted to only the consumers of the products, the costs are common pool costs that affect those that are not benefiting from the goods produced and negatively impact millions of lives in the present and in the future. As Conservation policy and regulations have shown us; it is not impossible to quantify intrinsically valuable goods, in fact since their value is often quantized as infinite for posterity, the cost is too much for a society to bear selling it.
Covington, Howard and Raj Thamotheram. “How Should Investors Manage Climate-Change Risk?” Rotman International Journal of Pension Management. Vol.7 Issue 2 Fall2014 (42-49)
Duncan, Dayton and Ken Burns. “National Parks: America’s Best Idea” Episodes 1-6. PBS 2009.
Garnaut, John. “Canned air for sale in China, as blanket of smog returns”. The Sydney Morning Herald. 2013: http://www.smh.com.au/world/canned-air-for-sale-in-china-as-blanket-of-smog-returns-20130128-2dht3.html
Kim, Chan and Renee Mauborgne. Creating New Market Space. Harvard Business Review Jan-Feb 1999 (83-93).
McGrath, Matt. “Fossil Fuels Should Be Phased Out by 2100”. BBC News Science and Environment. November 2 2014. http://m.bbc.com/news/science-environment-29855884
Corporations: Factions Restricting the Public Policy Process
In no doubt has ExxonMobil used its economic power to influence politicians in Washington and shape public policies. A brief example of this is a potential bill regarding a form of phthalates, DINPs, being in children toys would be restricted. ExxonMobil pushed back on this bill, having stiff lobbying of Washington officials. However, a significant issue at play is whether or not powerful corporations should have the ability to influence the public policy process. Due to the nature of the political process, powerful corporations should not have the ability to influence the public policy process as it represents a faction in the political process. In other words, having powerful, large corporations is a faction and it is detrimental to the public policy process.
The case where ExxonMobil influenced Washington officials is merely one of many. In this specific case, legislation was proposed to restrict the use of DINPs in children toys as it was claimed that DINPs was a health threat to those exposed to it. Ultimately ExxonMobil focused a group of phthalates-concerned scientists to be lobbyist. What occurred was since ExxonMobil was focused largely globally than nationally, ExxonMobil was not going to compromise. What eventually occurred was that President Bush signed in the Consumer Product Safety Improvement Act, prohibiting the use of DINPs in children’s toys. A ramification of this was positive as it prevented the possible health impact of having DINPs in toys. Nonetheless, ExxonMobil was able to influence a few members and created a significant stalemate with the bill.
Since the equalization of corporations and persons was made, in no doubt is the ability for these corporations to influence the public policy process, an issue. The significant issue at play here is that in this context, corporations can be thought of as a faction, rather than an interest group, purely because of the amount of power they have in the political realm. Madison’s view is supporting this notion in Federalist 10. He writes: “none deserves…tendency to break and control the violence of faction” (Madison). This power is often seen as muffling citizen opinion and vote, a clear formation of a faction. This is supported here: “corporations know that if they cut off democracy at the local level they can use their financial heft to gain more control over state legislature” (Kimbrell). This was all made possible with the equation of a corporation and a person. The presence of this faction is concerning as it limits effective democracy.
I would argue that we cannot prevent this intersection between economies and politics as it is inherent to a capitalist economic system. Capitalism is a political economy. A counterargument to this is that since corporations are equivalent to persons, we must keep equality among persons so voting rights would have to be implemented. If this were done, the intersection between economies and politics would be limited. Doing this would beg the question about whether or not government has the constitutional right to interfere with corporations as they are seen as persons.
Kimbrell, Andrew. “A New Wave of Democracy, and How Corporations Are Trying to Silence Your Voice and Your Choice.” Center for Food Safety. 16 Feb. 2015. Web. 18 Feb. 2015.
Madison, James. “The Federalist Papers.” The Library of Congress. New York Packet, n.d. Web. 11 Feb. 2015.
The Omnipresence of Corporate Influence
Response to Josh
I agree, from an ethical standpoint, that corporations should not have as much influence over the public policy process as they currently do. Due to a connection between freedom of speech and spending and donating money as established in Citizens United v. FEC (2010), it is now unconstitutional to restrict corporations’ spending habits when it comes to campaign financing. Their influence over it should be noted as being essential to campaign financing as well as fighting or supporting policies and we have no choice but to accept it as a concrete fact of life. Corporations such as ExxonMobil, AT&T, Google, and General Electric contribute in the range of tens of millions of dollars to campaigns and spend similar amounts on lobbying efforts (Center for Responsive Politics 2015).
You argue that the promotion of the factional model of society is a negative consequence of large corporate donations and influence. Corporate PACs claim to donate independently of party affiliation (Chevron 2014), yet Open Secrets data show that many of the top 100 organizations have political leanings, while about 30% of those give independently. This selective method of distributing money does nothing but support Madison’s theory about the formation of factions, and it places his writings in a modern-day context. These factions include the partisan divide between Democrats and Republicans, as well as the gap between the rich donors and politicians who are swayed by large sums of money.
This money inevitably becomes part of the driving force of politicians’ decision-making process, and may eventually influence corruption. It is very easy for money to become a point of contention when large sums come from suspicious sources (Blumenthal 2014). Additionally, “campaign contributions can affect the priorities of elected officials, opening the door for interest group lobbyists” (Porter 2012). Shifting politicians’ focus away from certain legislation based on how the money flows is unfair when those policies (such as the Consumer Product Safety Improvement Act) are able to be stalled or killed entirely by a company (such as ExxonMobil’s efforts to fight that bill).
Your counterargument is accurate, as it is legally wrong to treat corporations as anything other than individuals when it comes to campaign financing. You mention this equality among individuals could lead to a slippery slope if corporations were to gain voting rights. If the theme of equality were to be maintained, this may very well be the outcome of the ongoing fight for corporate freedom.
Blumenthal, Paul. “Fishy Money Fuels Super PACs in Alaska Senate Race.” Huffington Post. 11 October 2014. Accessed 19 February 2015.
Center for Responsive Politics. “Top Organization Contributors.” Open Secrets. December 2014. Accessed 19 February 2015.
Chevron. “Political Contributions & Lobbying.” Lobbying and Political Contributions. February 2014 Accessed 19 Feb. 2015.
Porter, Eduardo. “Unleashing the Campaign Contributions of Corporations.” New York Times. 28 August 2012. Accessed 19 February 2015.
No Tax Breaks for Exxon
At a recent Senate Finance Committee Hearing, ExxonMobil executives defended the more than $2.1 billion dollars they and other oil corporations receive in tax breaks each year. Their justification for the enormous tax break they receive is that it is in compliance with government related tax breaks for all United States Businesses. However, this does not account for the staggering externalities that ExxonMobil and other large oil and gas companies impose on our society.
The chief executive officer of ExxonMobil, Rex W. Tillerson, stressed that eliminating or decreasing the tax break his company received would be “misinformed and discriminatory” (Broder, 1). Tillerson argued that he and the other oil giants would be in-favor of lessoned tax breaks if other companies (in other industries) were subjugated to the same monetary reforms (Broder, 1). The five major oil and gas companies made a collective profit of $35 billion this fiscal quarter and are on pace to break record profits for the oil and gas industry. The $4 billion dollars they are lobbying for in the senate is undoubtedly minor, and undoubtedly rooted in deeper social issues. Exxon mobil has been sending high-paid lobbyists into Washington for decades. These lobbyists have more than just energy reform on their agenda. With more than $63 million dollars in funding, exxon lobbyists boast a number of social issues ranging from education to real estate (Mayer, 1). Ultimately, the policy to cut tax breaks for oil and gas companies was not passed. If it were to be passed Americans would have seen a significant tax hike.
The oil and gas industry has long been apart of the political landscape in Washington. Prominent executive figures Dick Cheney and George W. Bush are former oil executives and during their administration congress gave oil and gas companies more than $14.5 billion in tax breaks (Mayer, 1). Exxon mobil was among the biggest fiscal contributors to the Bush administration.
Broder, John. “Oil Executives, Defending Tax Breaks, Say They’d Cede Them If Everyone Did.” The New York Times. 12 May 2011. Web. 18 Feb. 2015.
Mayer, Lauren. “Big Oil, Big Influence.” PBS. n.d. Web. 17 Feb. 2015.
A Single Corporation’s Success at the Expense of American Policy
The problem with large corporations swaying American public policy or government officials is the backlashing effect that is bound to happen. When large corporations decide their actions and motives based on their selfish successes, foreign policy and American customs can be compromised.
This past September, ExxonMobil found potentially one of the largest oil pools in the Russian Artic. This finding made an already uneasy relationship between Russia and America even more uncertain. The Kara Sea region presented an opportunity of unimaginable profit gain for ExxonMobil but would involved working with Russia. Putin has made it one of his greatest motives to compete with America in becoming the leading producer of oil and gas (Arkhipov, Bierman, Chilcote 2014). Although ExxonMobil has stated their compliance with U.S governmental license, this newly discovered land undoubtedly would lead this corporation to seek whatever means necessary in acquiring that oil, regardless of the affect on Russian/American relations. Oil companies may actually be in favor of deluding the problem of global warming or even admitting its truth because of the advantages climate change has on their profits (NPR 2012).
Why large corporations influence over policy allows a platform for problems, is because in reality they represent a minuet amount of the population. The financial support from PACs during the elections and resistance when Washington is deciphering policy makes the power of the minority too strong. America’s constitution was not founded on the belief of people, yet alone the minority, buying their way to power. ExxonMobil has been strongly tied to the Republican Party, receiving PAC support up to thirteen million dollars and a strong foot in the process of stopping tax bills (Coll 2012). This now politically driven monopoly could keep a certain party in office just from the immense financial support.
When foreign policy starts to become based on the beliefs of these corporations, American security is put in jeopardy. The incident in the Kara Sea proves that foreign relations are negatively affected when large corporations such as ExxonMobil start to pursue their interests, while simultaneously putting America at risk. With revenue surpassing nearly most countries, ExxonMobil’s $450 billion income presents the possibility to sway the brains and bodies within Washington (NPR 2012). It is inevitable that large corporations will continue to gain economic power and use it to shape the political atmosphere but the affects are bound to destroy aspects of the American way.
Chilcote, Ryan, Stephen Bierman, and Ilya Arkhipov. “Rosneft Says Exxon Arctic Well Strikes Oil.” Bloomberg Business. N.p., 27 Sept. 2014. Web. 17 Feb. 2015.
Coll, Steve. “Gusher: The Power of ExxonMobil.” The New Yorker. N.p., 9 Apr. 2012. Web. 17 Feb. 2015.
“ExxonMobil: A ‘Private Empire’ On The World Stage.” NPR. 2 May 2012. Web. 16 Feb. 2015.
In 2011, Exxon spent 3.2 million dollars lobbying the Federal government in the third quarter alone (Strachan 1). Topics included oil pipelines, hydraulic fracturing, security provisions for chemical facilities, consumer product safety, toxic substance rules, air quality standards, patent reform, and regulations related to corporate aircraft (Strachan 2). As one might expect this presents a problem for the consumer.
The US government is designed to allow any citizen to participate. If an individual supports a cause or bill they can support it in many ways, but one of the most effective ways is monetary donations. Corporations have a higher earning potential than the average american individual and usually a bigger net worth. Capitalism frequently puts the needs of the few over the needs of the many. When Exxon Mobil lobbies, their money is spent trying to sway votes away from increased environmental regulation, because it benefits their profit margin. However, for the average consumer, this is dangerous. The environment suffers a great deal from the oil industry, both through its production and consumption. When Exxon attempts to deregulate environmental standards, they are working against the consumer.
Money buys influence. When a government candidate accepts a monetary donation from a company they are effectively selling their vote for to the donators desires. Rick Perry for instance accepted donations from Energy Transfers Partners during the debate over a controversial oil-pipeline in hopes they would have a friend in the White House (Basu 1). The pipeline was opposed by environmentalists, but Perry, with a seat on Energy Transfers Partners board did not oppose their donations.
The US government is a system designed to give a voice to the voiceless person and allow them to influence public opinion, but the system is designed in such a way that no one person can sway an election. Because more money can influence more people (through purchases like ad campaigns and fundraising events) donations should be limited to individuals rather than companies, because companies, with its assets has the ability to sway an election in a way an individual does not. This alone would not be a problem, however swaying an election or lobbying for a bill that goes against the needs of the people has no place in government.
Basu, Rekha. “Who Says Money in Politics Doesn’t Buy Influence?” McClatchy DC. N.p., n.d. Web. 18 Feb. 2015.
Strachan, Maxwell. “Exxon Mobil Spent $3.2M Lobbying Federal Government In Third Quarter.” The Huffington Post. n.d. Web. 18 Feb. 2015.
Are Corporations Creating the Inequality?
Response to Paige
I agree that the allegations surrounding ExxonMobil involving lobbying and having a disregard for environmental standards are true and have created a great inequality and problem for the people in the United States. The environmental standards have been a battle between the US Government and ExxonMobil because of their extensive lobbying. Spending nearly $61milliopn between 1998 and 2005 on lobbying alone (Richter, 2011). These individuals pushed for policy changes that would benefit the amount of profit that they could obtain.
As stated the issues of lobbying serves as a problem for the consumer, but not only from a democratic or economic standpoint. It is a problem from a health standpoint. For example, in 1989 Exxon had the first and largest oil spill. This oil spill polluted the ocean surrounding Alaska with 11 million gallons of oil. Not only did this affect the marine life in the area but also hurt many of the people who fished and lived in this area (Yardley, 2010). These individuals’ lives were affected and in 2010 the people in these coastal areas want to move on, but have found it difficult because they are still affiliated with the Exxon Valdez oil spill. After all was complete though, ExxonMobil only paid $500 million, which was originally $5 billion that was issued by an Alaskan court case.
Since this incident people have spoken out against the corporation, but regulations seem to be staying the same mainly because of their ability to lobby. Lobbying has taken the voice away from the people and moved it into these large corporations, not just ExxonMobil. If a corporation wants to donate money to a politician or try a get a certain policy passed the amount of money that will be spent is outrageous. In the past presidential election the democrats and republicans spent a combined $1.2 billion (Ashkenas, 2012). The amount of money that is put into these elections alone shows the ability of these corporations to sway an election. Elections should not be based on the amount of money put into it, but after Citizens United v. FEC that is what the U.S. democracy has become.
Richter, Burton, David J. C. Mackay, Bryan Lovell, and David Keith. “Beyond Smoke and Mirrors: Climate Change and Energy in the 21st Century; Sustainable Energy–Without the Hot Air; and Challenged by Carbon: The Oil Industry and Climate Change.” Physics Today. 64.1 (2011): n. pag. 2011. Web. 18 Feb. 2015.
Yardley, William. “Recovery Still Incomplete After Valdez Spill.” New York Times. 05 May 2010. Web. 18 Feb. 2015.
Ashkenas, Jeremy. “The 2012 Money Race: Compare the Candidates.” New York Times. 2012. Web. 18 Feb. 2015.
Response to Paige
In response to Paige’s position, that corporations have disproportionate influential power in comparison to the individual, I must agree.
One of the most important cornerstones of democracy, is EQUAL say in government operations for all. Unfortunately, lobbying facilitates UNEQUAL influence on the part of large corporations. The power of both the individual and ‘entities’ should not be proportional to the amount of money they posses. As Paige stated previously, Exxon spent $3.2 million on lobbying in the third quarter alone! Their intentions do not reflect what is in the best interest for the average American, and may even harm the average American in ways that cannot be measured in a monetary value.
Paige makes a very interesting point, that lobbying in general is not necessarily bad, however, it becomes a problem if the corporation lobbies for a bill that goes against the interests of the American public. As stated in the article ‘Lobbying Ethics,’ ‘An ethical approach to lobbying must ensure that someone stands up for the common good.’ (Nadler & Schulman) But Paige, where does one draw the line? Who decides if a lobbying effort is ethical or not, based on this idea of the common good?
To recapitulate, lobbying poses a direct threat to democracy by masking the voices of those without adequate monetary assets. An interesting example of the ‘dark side’ of lobbying, is the UK’s Cotton Industry scandal. In 2011, several lobbyists from a firm called Bell Pottinger lobbied for cotton production in Uzbekistan, which is a country known for using child labor. (Jardine 2011) Clearly, there are some unethical lobbying tactics, and I would propose that strict regulations on lobbying should be imposed.
Nadler and Schulman. “Lobbying Ethics.” March 06, 2006. Web. Feb. 19, 2015.
Nick Jardine. “Here’s The Scandalous Lobbyist Story Everyone In The UK Is Talking About.” Dec. 06, 2011. Web. Feb. 19, 2015.
Response to Paige
I agree with Paige’s statement that money can influence people and there should be a limit on what corporations can donate to politicians. Just recently has ExxonMobil, among other oil and gas companies, donated millions to the Clinton Foundation in hopes of influencing the outcome of the Keystone XL pipeline (Foran, 1). The pipeline is causing a lot of fear and commotion among environmentalists as they are fearful of another oil spill, this one happening on American soil.
The supporters of the pipeline argue that the pipeline will help America’s dependency on foreign oil. Also stating that the $8 billion dollar pipeline will generate thousands of jobs for American citizens during its construction and operation. However, “most analysts now concede, that pipeline will do little to generate long-term jobs or promote US energy independence” as stated by Michael Klare, shows the contrary. Corporations like ExxonMobil do not have the interest of the American people in mind when they make political contributions such as this. They have only the interest of their profits.
Perfectly said by ExxonMobil’s Lee Raymond himself, “I’m not a U.S. company and I don’t make decision’s based on what’s good for the U.S.” (Coll, 71). That statement clearly shows that this corporation goal is to help itself, not America. The donations that they have made will have more of an effect on the outcome of the pipeline than any single person’s vote even though there are dangerous externalities that could harm those people more than it could the corporation.They have shown once again that money is more important in politics than a citizen’s vote since a citizen’s vote can clearly be bought. Money on capitol hill has more influence than any voter does.
To curb or even out the influence that money has there would have to be a limit on what a corporation can donate or contribute to politicians and political parties. Money should not equal power when bargaining on policies about people’s health and safety in the U.S. Corporations alternatively should not be treated as a single entity, instead as a combination of multiple individuals. This way corporations cannot just buy or influence politicians and or policies seeing as how those single individuals would have make to the donations. Such a thing is inherently wrong in a free market and in a capitalist society and for the needs of U.S. people it should not influence public policies.
Klare, MIchael. “Why Is the Keystone XL So Crucial to the GOP’s Vision for the Future?” Mother Jones. Foundation For National Progress., 12 Feb. 2015. Web. 19 Feb. 2015.
Taube, Michael. “Rethinking the Keystone XL Pipeline.” Washington Times. 17 Feb. 2015. Web. 19 Feb. 2015.
Foran, Clare. “Big Oil and Pro-Keystone Groups Gave Millions to Clinton Foundation.” National Journal. N.p., 18 Feb. 2015. Web. 19 Feb. 2015.