Manu Fernandez/AP Photo
Truckers gather on the outskirts of Madrid to protest the high price of fuel, March 24, 2022.
The campaign to keep Russia from taking over Ukraine has hit a snag. So has the campaign to bolster domestic industry here in the States so that our economy can produce what it needs.
In both cases, the snag is the same: corporations’ and Wall Street’s desire for higher profit margins.
In the case of Ukraine, as The New York Times explained this week, European nations now dependent on Russia—and still paying Russia—for its oil and gas would welcome ending that dependence if the U.S. could supplant Russia by exporting more of its own oil and gas to the continent. The snag is that our own fossil fuel giants don’t want to boost their supply of oil and gas for fear that their abundance will cause their price—and with it, those companies’ profits—to fall.
Well before the Times got wind of this reluctance, the Prospect’s Lee Harris reported that our big investors (we’re looking at you, Wall Street) didn’t want to make the investments that would enable our fossil fuel giants to increase production, as maintaining high prices at the pump meant correspondingly higher profits for those investors.
Such intransigence follows logically from the doctrine of maximizing shareholder value, from which such deviations as defeating expansionist Russian authoritarianism and providing relief to American motorists matter not a whit. It would be nice if we could assign our investors’ reluctance to increase oil and gas production to their concern for the planet’s climate crisis. It would be nice, but it would be wrong.
A similar snag—that shareholder value über alles thing—created the conditions that belatedly have led to the push behind legislation, currently in conference committee on the Hill, to boost domestic production of semiconductors, which are critically important to the manufacture of cars, planes, laptops, iPhones, and damn near everything else. Time was when we could meet the need for semiconductors largely through their domestic production, but as with most crucial industries, it proved more profitable to investors to let them be produced in lower-wage nations. The bill now in committee allots more than $50 billion to onetime domestic production champions like Intel to increase production here at home. Bernie Sanders, always on top of such matters, has questioned why we need to subsidize such massively profitable companies, particularly if we don’t condition those grants on iron-clad assurances that those companies won’t take the money and run to other nations where the cost of labor is lower.
Well, here’s a modest proposal. Why doesn’t the government take an equity share in those companies as a condition for their taking those grants? Better still, why doesn’t the government use some of that money to set up its own semiconductor production company, since that’s really the only reliable way to ensure that production proceeds within our borders? For that matter, as Bob Pollin has argued recently in these pages, why don’t we nationalize our fossil fuel industry, as other democratic nations have done, so we can control the output of this strategic commodity and hasten our transition to renewable sources?
After all, squaring national imperatives with the imperatives of shareholder primacy is like squaring a circle. You can’t.
