September 15, 2008

For the center to hold

By Roger D. Feldman, Andrews Kurth LLP

As oil prices soar and power prices threaten to follow, our republic’s mix of diverse cultural and economic interests must cooperate to achieve our common goal of energy self-sufficiency. Those interests seem to fall into one of four main groups—policy, corporate, finance, and technical innovation—each seeking to control the direction of our nation on major issues. Members of these various cultures see each other at meetings and hearings but don’t connect; they know the common lingo but don’t communicate. Each craves control of the levers of political power and will vigorously protect its turf against trespassers. Let’s describe each of the four stakeholder groups:

• Policy analysts seek optimal holistic solutions consistent with the intellectual model (conservative or liberal) of the policyholder. It seems conservative solutions must always defer to markets, and liberal solutions frequently must take into account previously unaccounted-for social costs. Both bend public opinion in the name of the common good. They are all, one way or the other, diviners of the Invisible Hand.
• Corporate managers have been trained to focus on the business of maximizing short-term profits. Industry leaders have long demonstrated that astute shaping of public policy can create business winners, and the “public affairs industry” in Washington is just another competitive tool.
• Finance industry specialists have a more comprehensive and objective perspective: They see how policy and business decisions can shift corporate bottom lines, and hence their interest. Often free with others’ money, they appear to believe that they can finance anything, because for every loser there is somewhere a winner.
• Innovators in the energy business, while knowledgeable about what they do best to achieve technical breakthroughs, frequently (and sometimes not without reason) view the other established cultures as necessary evils or even anti-innovation.

---