Saturday, February 03, 2007

Counter intuitive or plain stupid?

Living in Dallas, it is hardly uncommon to open the newspaper and read about some oil or coal or automobile company lobbying the government for something or the other. Take this example of lobbying by companies who want to continue to build and run (poor or low efficiency and highly polluting) coal powered plants.

This story is repeated across America, with American car companies wanting subsidies and freebies to continue making lousy, inefficient cars, or oil or coal companies wanting to continue to build and operate higly polluting, inefficient plants.

The money they spend on lobbying comes to a few million dollars. Usually, after a few years, they end up spending many more millions either cleaning up the mess they caused, or being forced to rebuild from scratch (with more efficient technologies). Sometimes, the losses they post are staggering.

But still, they continue to lobby to make crap.

Now, wouldn't all this money that the spend on lobbying or cleaning up messes be better spent on researching new, better technologies that are more efficient, and likely to last longer with lower recurring costs? Clearly, the people running these companies must be smart. But this, even intuitively, seems to be a better long term solution. Are these companies incapable of seeing beyond the next quarter profits, or am I just plain stupid?


Patrix said...

I mostly agree with your expectation but in reality, the companies are expected to meet their quarterly (not just annual) goals and this leads them to consider short-term goals. Lobbying if done with enough moolah has a definite end whereas research doesn't. I wish this behavior would change though. With ExxonMobil's record profits last year, I doubt anything is going to change at least in the short term :)

Sunil said...

yeah.....sad, isn't it.

But perhaps companies should start thinking of quarterly goals leading to annual or 5-year results. Need to think a little beyond. But that's a whole new mindset.

Anyway, its true but sad.

Anonymous said...

Dallas? did you say Dallas? you are bringing back memories... ;)

find out where Euclid street is and take a stroll around the area; nice spot for a scientist...(I am serious)