U.S. Chamber of Commerce exploits small businesses

I’ve long suspected U.S. Chamber of Commerce leaders of being amoral money-grubbers who exploit the bulk of their membership to push their big business, anti-government political agenda and the interests of the Chamber’s most powerful and deep-pocketed companies. I wrote this article to make that point and then discovered this fact that makes my argument more persuasively.

Look who’s on the U.S. Chamber of Commerce’s Board of Directors: Massey Energy CEO Don Blankenship! I argued earlier that Blankenship — whose contempt for miner safety laws warrants a murder conviction — acts like a psychopath.

Many large organizations today seem more interested in exploiting their members than helping them. (Yeah, I’m looking at you, AARP!) No organization sells out and manipulates its members better than the U.S. Chamber of Commerce. Consider this news:

In filings with the FCC on the open Internet proceeding, which are due Monday, the National Association of Manufacturers and the U.S. Chamber of Commerce said the FCC should resist the urge to interfere with broadband until they have thoroughly examined all of the ramifications…

Jason Goldman, counsel for telecommunications and e-commerce for the U.S. Chamber of Commerce, said there “really is intense competition” in the broadband market.

Translation: The Federal Communications Commission should let cable companies exploit their stranglehold on your Internet access however they desire — e.g., cutting off your access to websites they don’t like; charging additional fees to visit Youtube, etc. — because the Internet access industry is so darn competitive.

That’s laughable outrageous! I just looked up my Internet access options at DSLReports.com. Here’s the complete list for my zipcode (and I live in a city):

CABLE providers in your area — Optimum Online

Or I could try DSL. That’s it. So I pay Optimum Online several gazillion dollars every month.

I’m hardly alone. Greedy politicians have let telecom companies carve the whole country up into regional monopolies and duopolies, just as mob kingpins carve a city into pieces and “tax” each crime family to keep the families from attacking each other or cutting into one another’s fat profit margins.

Politicians killed off efforts to provide entire cities with cheap or free city-provided WiFi (called “muni Wifi” and “public WiFi”). In March 2005, Stanford law professor Lawrence Lessig explained “Why Your Broadband Sucks”:

You’ll be pleased to know that communism was defeated in Pennsylvania last year. Governor Ed Rendell signed into law a bill prohibiting the Reds in local government from offering free Wi-Fi throughout their municipalities. The action came after Philadelphia, where more than 50 percent of neighborhoods don’t have access to broadband, embarked on a $10 million wireless Internet project. City leaders had stepped in where the free market had failed. Of course, it’s a slippery slope from free Internet access to Karl Marx. So Rendell, the telecom industry’s latest toady, even while exempting the City of Brotherly Love, acted to spare Pennsylvania from this grave threat to its economic freedom….

this sort of insanity is raging across the US today. Pushed by lobbyists, at least 14 states have passed legislation similar to Pennsylvania’s. I’ve always wondered what almost $1 billion spent on lobbying state lawmakers gets you. Now I’m beginning to see….

Broadband is the perfect example. The private market has failed the US so far. At the beginning, we led the world in broadband deployment. But by 2004, we ranked an embarrassing 13th. There are many places, like Philadelphia, where service is lacking. And there are many places, like San Francisco, where competition is lacking. The result of the duopoly that currently defines “competition” is that prices and service suck. We’re the world’s leader in Internet technology – except that we’re not.

Five years later, Americans still pay much higher prices for much slower Internet access than citizens of any other developed nation (see: “The Broadband Gap” Part 1, Part 2 and Part 3).

The Internet is a powerful business tool. So, if there’s one issue the U.S. Chamber of Commerce should be screaming for, it’s universal, cheap, fast Internet access. But instead of supporting it, the Chamber is spending millions lobbying to let telecoms exploit their monopoly power however they desire.

The Chamber is advocating for telecom companies — which bribed politicians to prevent competition — by claiming “intense competition” justifies letting telecom companies act as chokeholds over any Internet service its users might wish to access! You want to watch Youtube? Pay the Youtube access fee. You want ESPN.com? There’s a fee for that. Telecoms are drooling over the prospect of extorting extra money from Internet companies and their own customers to let them connect to each other.

And some telecoms probably want to be able to exercise political control over what Americans read and watch over the Internet. You want DemocraticUnderground.com? I’m sorry. Comcast doesn’t allow that.

Telecom control of your Internet access — especially in a country with virtually no choice of Internet provider — is very scary. Of the 3+ million businesses the U.S. Chamber of Commerce claims as members, most are small businesses that want (or should want) unfettered Internet access. Many run their small businesses on the Internet. Most buy supplies over the Internet. Many advertise on the Internet. Why would they want to hand giant telecom companies the power to charge extra or to cut off access to certain Internet resources? It makes no sense… until you realize that the leadership of the U.S. Chamber of Commerce has been doing the bidding of the big corporations — in this case, telecoms — for years.

So what is the Chamber fighting for? It opposes efforts to save the planet from global warming, despite loud protests from its own top membership. A handful of energy companies loudly quit the Chamber in protest. Apple quit too. And Nike resigned from the Chamber’s board of directors.

As with Internet access, U.S. politicians have taken campaign contributions to stifle healthcare competition, and ordinary Americans and their employers — who actually pay the bulk of healthcare costs — are getting screwed. Internet access is also like healthcare in that the government has taken a hands-off, laissez-faire attitude, whereas other developed nations view healthcare and Internet access as worthy of government involvement to hold down prices. And the Chamber has been forcefully on the wrong side of both issues.

Three of the Chamber’s current top issues it’s urging members to lobby Congress about are issues its members would benefit from being on the other side of:

  1. “Oppose the Consumer Financial Protection Agency Act” which is “another government takeover of American business”: Every business has a bank account. And businesses are suffering under a rapacious financial system, just as individuals are. Why would small business people benefit by allowing banks to continue using all kinds of tricks to suck money from them? And how did small businesses benefit when they couldn’t borrow money after deregulation led to a near collapse of the financial system?

  2. Increase free trade: U.S. businesses are being undercut by companies that cut costs by mistreating workers, paying them a pittance and polluting their environments. U.S. businesses should be demanding a level playing field. Instead, the Chamber is telling them we need to further tilt the playing field in favor of countries that are already playing dirty.

  3. Oppose healthcare reform: Why!?!? As Paul Tullis succinctly writes,

Businesses pay for most people’s health insurance. The cost of this insurance is going up four times faster than inflation and ten times faster than the economy is growing. It’s said that GM’s health care costs add thousands of dollars to the price of every car it sells.

So shouldn’t the Chamber of Commerce be in favor of unloading this expense from the backs of its members? The group’s opposition to reform makes no sense.

Tullis also points out the Chamber’s claims are a pack of lies, which speaks volumes for the Chamber’s regard for its members' interests (and intellect):

The ad was stunning for the breadth of the chasm between it and the truth…

Lie #1) The ad claims health care costs to families will go up. In fact they will go down. This is so obvious that anyone who’s read the first thing about the House and Senate bills should not be fooled by the Chamber’s efforts on this point….

Lie #2) The ad claims the current bills before Congress will add to the deficit. The Congressional Budget Office says both bills will reduce the deficit.

National Journal reported that the U.S. Chamber of Commerce “has spent approximately $70 million to $100 million on the [anti-healthcare reform] advertising effort”:

Since last summer, the chamber has poured tens of millions of dollars into advertising by the two business coalitions that it helped assemble: the Campaign for Responsible Health Reform and Employers for a Healthy Economy.

In late October, the chamber helped cobble together a larger coalition, Employers for a Healthy Economy, which became the key advertising vehicle for attacking provisions in the House and Senate bills being developed. The newer coalition includes such business giants as the National Association of Manufacturers, the National Retail Federation and the National Association of Wholesaler-Distributors.

The ads sharply criticized the high costs of the separate bills, especially the House version. The commercials warned the legislation would raise taxes for Americans and hurt the economy as it tries to recover from the recession. And some chamber-financed commercials attacked setting up a government run plan to compete with private insurers — a special sore point for the insurance industry — which is part of the House measure.

The U.S. Chamber has spent approximately $70 million to $100 million on the advertising effort, according to lobbying sources.

In reality, this evil Obama plan offered tremendous benefits to small businesses:

The Obama Small Business Health Tax Credit will provide a refundable credit of up to 50 percent on premiums paid by small businesses on behalf of their employees….

The Obama health care plan will provide small businesses with new opportunities to buy low-cost, high quality health plans for their employees through a national exchange similar that will allow small businesses to get the same benefits of spreading risk and administrative costs over a large pool that larger businesses currently enjoy….

The Obama plan will reimburse employer health plans for a portion of the catastrophic costs they incur above a threshold if they guarantee such savings are used to reduce the cost of workers’ premiums. This reimbursement (often called reinsurance) is particularly important for small business plans, which can be overwhelmed by the costs of catastrophic expenditures for even a single employee….

The Obama plan will aggressively lower health costs by facilitating broad adoption of standards-based electronic health information systems, and other value-increasing innovations improving chronic care management, and increasing insurance market competition.

The Chamber pretends to support its 3 million U.S. businesses but only cares about its Don Blankenships.

(I stumbled across StopTheChamber.com, which might be of interest to some readers.)

Posted by James on Tuesday, April 27, 2010