Clearing The Air

Saturday, March 03, 2007

Hey big brother, can you spare a government mandate?

It would appear that the Johnson & Johnson Company and its political wing the Robert Wood Johnson Foundation (RWJF) have hit upon hard financial times. How else could you explain their hands out approach to pandering for government mandates (smoking bans) which gives market preference to their pharmaceutical nicotine products like Nicoderm and Nicoderm CQ as tobacco nicotine use is banned in bars and restaurants.

The fact that local governments seem only too happy to oblige, calls into question the motives of our legislative bodies as well. Especially since every other workplace hazard is regulated instead of banned, as this article point out:

http://cleanairquality.blogspot.com/2007/02/secondhand-smoke-should-be-regulated.html

An economist friend informed me that the correct term for this type of pandering is called rent seeking. I think racketeering and monopolistic are just as fitting.

The term "rent seeking" sounds benign enough until you consider its definition found on Wikipedia here.

(Rent seeking)...implies the extraction of uncompensated value from others without making any contribution to productivity, such as by gaining control of land and other pre-existing natural resources, or by imposing burdensome regulations or other government decisions that may affect consumers or businesses....

Robert Wood Johnson Foundation's smoking ban efforts on behalf of their founder, the Johnson & Johnson Company are a classic example of a taking of small businesses productivity (in this case the hospitality industry) to benefit its own monopoly interests.

...Rent seeking is held to occur often in the form of lobbying for economic regulations .........Regulatory capture is a related concept which refers to collusion between firms and the government agencies assigned to regulate them, which is seen as enabling extensive rent-seeking behavior.........Claims that a firm is rent-seeking therefore often accompany allegations of government corruption, or the undue influence of special interests..

This paper by the Cato Institute highlights a couple of instances of rent seeking, and provides this explanantion:

...Most Americans recognize that politics has a lot to do with the pursuit of power, privilege, and special interests; however, there is a general presumption that environmental politics is somehow different. We take for granted that environmental laws are what they seem; that the legislators who enact those laws and the bureaucrats who implement them are earnestly struggling to protect public interests.......All too often, however, environmental regulations are designed to serve narrow political and economic interests, not the public interest....

In the case of smoking bans, this type of onerous prohibition is designed to serve the interests of the Robert Wood Johnson Foundation (and the Johnson & Johnson Company) who funded such legislative efforts as evidenced in this article:

http://cleanairquality.blogspot.com/2007/02/smoking-bans-good-public-policy-or.html

RWJF does not fund advocacy organizations strictly to educate the public......they expect their grant recipients to bring about policy changes at state capitols and in state laws around the country.

Case in point the smoking bans......see who they've funded, and what their expectations were:

...Two features about the program are significant: (1) the (RWJF) Foundation encouraged its grantees to be activists; (2) advocacy was emphasized to bring about policy change......

http://www.rwjf.org/research/researchdetail.jsp?id=2002&ia=143

http://www.rwjf.org/reports/npreports/smokeless.htm

http://www.rwjf.org/portfolios/grantlist.jsp?iaid=143&page=2

Now check out what pharmaceutical conglomerate pulls the strings at RWJF, and also note how many board members were former executives and/or board members of the Johnson & Johnson Company:

http://www.rwjf.org/about/founder.jsp

http://www.rwjf.org/about/trusteebio.jsp?id=180

http://www.rwjf.org/about/trusteebio.jsp?id=10

http://www.rwjf.org/about/trusteebio.jsp?id=70

http://www.rwjf.org/about/trusteebio.jsp?id=80

http://www.rwjf.org/about/trusteebio.jsp?id=100

RWJF is the single largest shareholder of the Johnson & Johnson Company ......a $5.4 billion holding.

Johnson & Johnson's alternative pharmaceutical nicotine products just happen to fit that niche market created when legislative smoking bans are enacted.

And in the future, RWJF has an even greater rent seeking scheme in the works, with its newest battle against obesity:

http://www.rwjf.org/portfolios/interestarea.jsp?iaid=138

Because the smoking bans were so successful, state and federal lawmakers will continue to hear a familiar phrase from organizations like the Robert Wood Johnson Foundation and the non-profits they employ:

Hey big brother, can you spare a government mandate?

Also see:
http://cleanairquality.blogspot.com/2007/04/bmj-published-air-quality-test-results.html