Crony capitalism the greenest aspect of tall wood building proponents’ agenda

Competitive Enterprise Institute Fellow Bill Frezza classifies capitalists by tactics and wealth sources: Crony Capitalists obtain riches through government favors, exhibit “willingness to use the coercive powers of government to gain an advantage they could not earn in the market,” and are “happy to help themselves to money from the public treasury [through] subsidies that flow directly into their coffers.” By contrast, Market Capitalists satisfy “willing customers through free exchange,” risk “their own money to earn their own rewards,” and “meet their rival[s] in open competition, may the best products win.”

In a 2011 critique, “What Exactly is Crony Capitalism?,” the Boston venture capitalist foreshadowed a 2016 election year stunt that warrants cement and concrete interests’ attention more for its brazenness than Capitol Hill prospects. Sprouting from the Senate Agriculture, Nutrition and Forestry Committee, the Timber Innovation Act (S 2892) would a) incentivize investment through the National Forest Products Lab and American colleges and universities to conduct research & development on wood building practice; and, b) support U.S. Department of Agriculture efforts to further the use of wood products as a material for buildings above 85 feet or seven stories in height, including a five-year authorization for the annual $3 million Tall Wood Building Prize Competition.

“Heavily regulated industries breed Crony Capitalists, who are highly skilled at capturing the agencies intended to regulate them,” Frezza contends. Pegging the cronyism behind schemes like the Timber Innovation Act, he adds, “Agribusiness leads the way when it comes to directly looting the public treasury.”

Senator Debbie Stabenow (D-MI) has stepped up for agribusiness and the USDA, introducing S 2892 with Senators Mike Crapo (R-ID), Maria Cantwell (R-WA) and Steve Daines (R-MT). “Wood construction is a winner for our rural economies and environment. Our bill helps drive a new market for forest products—keeping loggers at work in the woods and helping to sustain rural communities,” said Senator Stabenow. In the haste to announce the Timber Innovation Act, she or her staff perhaps overlooked the adverse effects S 2892 would have on the customers of Besser Co. and Lafarge North America, whose Market Capitalism has helped sustain the Alpena, Mich., community for more than a century.

The bill’s sponsor is not alone in invoking the “rural” element. “Advancing tall wood buildings will help lower the cost of construction and reduce reliance on fossil fuel-intensive materials. Tall wood building construction will also support jobs in areas of rural America that have yet to recover from the recession,” claimed Robert Glowinski, chief executive officer of the American Wood Council. The Leesburg, Va., group has been at the forefront of promoting cross laminated timber and other engineered wood products for mid-rise buildings.

“The Timber Innovation Act is an exciting step forward, creating new markets and opportunities for wood construction. While wood is one of the oldest building materials, new technology utilizing engineered mass timber panels and wood-based building systems is opening new possibilities,” observed Weyerhauser Co. Senior Vice President of Wood Products Adrian Blocker.

If fabrication technology at sawmills has produced structural members equipping developers, architects, engineers and contractors to build better and taller in wood, why do Weyerhauser (2015 sales, $7 billion) and American Wood Council peers need subsidies like the Timber Innovation Act? That is among positions the National Ready Mixed Concrete Association and allied groups can take to Capitol Hill as part of a campaign to educate lawmakers on S 2892. NRMCA frames an argument rooted in Market Capitalism: Federal funding should not advance the use of particular wood products over other construction materials or artificially provide preference for any building materials.