President Obama’s choice to lead the Commerce Department is a revolving-door former regulator who has spent his private-sector career earning millions from government-granted monopolies that depend on subsidies for their profits.
John Bryson was CEO of Southern California Edison; he’s a director at Boeing, Disney, and electric-car maker Coda Automotive; and he’s chairman of the board at solar energy giant BrightSource. All of these businesses rely heavily on government subsidies and government protection. This is a virtue in the eyes of Obama, who said Bryson has “the expertise that will help us create new jobs and make America more competitive in the global economy.”
Bryson began his career by creating an environmental litigation group, the Natural Resources Defense Council. He parlayed this gig of suing governments and businesses into top appointments in the late 1970s from Gov. Jerry Brown. After a three-year stint as president of California’s Public Utility Commission, Bryson cashed out in 1984 to California’s largest public utility, Edison International, parent company of Southern California Edison.
Edison’s CEO, Howard Allen, had handpicked Bryson, grooming him to take over the company, which he did in 1990. Running a regulated utility is pretty different from running any other sort of business: Bryson was operating a monopoly, protected by the government from competition, and with rates set by the government.
Southern California Edison didn’t need to win over customers by improving its product or lowering prices. Instead, the company’s profits depended on its ability to persuade politicians and bureaucrats to approve its rate increases — not easy, for sure, but hardly the stuff of enterprise.
Bryson’s other employers aren’t government-enforced monopolies, but they are clients of the corporate-welfare state. Bryson sits on the board of Coda Automotive, which makes electric cars. Very few technologies benefit from as many subsidies as electric cars: the Department of Energy finances their manufacture, the stimulus bill subsidizes their batteries, tax credits subsidize their purchase.
And in the case of Coda, China is helping. Last year Bryson told reporters, “The Chinese government — I’ll oversimplify — has put up $500 million to move manufacturing forward” for Coda’s cars.
CODA, like many companies in the “green energy” business, is dialed into the political elite. Two early investors in 2009 included Bill Clinton’s Chief of Staff Mack McLarty and George W. Bush’s Treasury Secretary Henry Paulson.
BrightSource Energy is another subsidy-dependent company with Bryson on its board — in fact, he’s chairman. For its $2.18 billion solar energy project in the Mojave Desert, BrightSource pocketed a $1.6 billion loan guarantee from the Energy Department in April.
Bryson also sits on Disney’s board. Journalist RiShawn Biddle wrote in 2004, “Few have panhandled for taxpayer dollars as successfully as Disney. … It has received at least $4.5 billion in subsidies, low-interest loans, land grants and ‘joint venture’ investments from governments in Florida, Pennsylvania and Hong Kong. It even managed to get a handout from the French government.”
And then there’s Boeing. One of the top defense contractors, Boeing has earned $100 billion in federal contracts and grants since the beginning of 2006. One government agency, the Export-Import Bank of the United States, dedicates a majority of its loan guarantees to subsidizing Boeing exports — $15 billion in loan guarantees in the past two fiscal years.
Local and state governments have also given many billions in subsidies to Boeing. Former Washington Gov. Gary Locke, the outgoing commerce secretary, once held a special “Boeing session” of the legislature in order to rush through $3.2 billion in subsidies for the company.
Given this administration’s unprecedented attack on Boeing — a National Labor Relations Board decision to block the aerospace company from making jets in its new South Carolina factory — it may seem surprising to have two Boeing allies picked for the top Commerce job. But even beyond Locke and Bryson, Boeing has a heavy presence in the Obama administration.
White House Chief of Staff Bill Daley sat on Boeing’s board with Bryson. Obama named Boeing CEO Jim McNerney head of his President’s Export Council. Obama’s two most intimate unofficial advisers are John Podesta and Tom Daschle. John’s brother Tony Podesta is a Boeing lobbyist, as is Tom’s wife Linda Hall Daschle.
Boeing, Disney, Coda, BrightSource and Southern California Edison all play in the government-directed economy, where businesses profit by working hand-in-hand with politicians and bureaucrats. John Bryson has made a career of this work. And President Obama sees him as the new model for the American economy.
Timothy P.Carney, The Examiner’s senior political columnist, can be contacted at [email protected]. His column appears Monday and Thursday, and his stories and blog posts appear on ExaminerPolitics.com.
