I love free market capitalism, this isn’t, because it comes at the expense of the consumer.
It’s the heart of faux/crony/welfare capitalism, enriching themselves at the expense of the taxpayer/consumer, by eliminating or at the least, marginalizing the competition. The state supplants the role of the consumer in choosing the winners and losers in the economy, which in most cases, chooses wrong, since they haven’t the breadth and depth of knowledge of the vast civil society.
NOTE: This move away from the incandescent light bulb is a dim bulbed move.
Your light bulb loss is manufacturers’ gain
Big business lobbies for big government in order to profit in ways the free market would never allow. All the time. The light bulb law is a great example, as this stock report from Motley Fool lays out in a dispassionate manner:
Companies that will benefit
General Electric (NYSE: GE) and Philips, the sector leaders in the incandescent light bulb market, also manufacture CFLs and LEDs.
The incandescent light bulb phase out will increase their lighting revenues in the short term because LEDs and CFLs cost more than the incandescent bulbs.
Cree (NASDAQ: CREE) , the leading LED light bulb pure-play, will also benefit. Due to its vertical integration, Cree is one of the lowest cost LED bulb makers.
Due to the fact that LEDs comprise only 1% of the U.S. lighting market, Cree also has a lot of growth ahead.
Because bubbles often grow with extra media coverage, the retirement of the incandescent light bulb could be a catalyst to send Cree stock higher.
Of course, GE and Philips lobbied for the law, and Philips partnered with the Natural Resources Defense Council to launch the serious push for it.
So next time you see some green group touting benefits to the planet of a new regulation to constrain your choices, ask yourself, “Which companies will benefit from this law?”