An Information Resource on Cap and Trade

The Heritage Foundation has a webpage where one can access information related to the very costly Cap and Trade legislation enacted at the behest of environmental extremists.

In an article titled Cap and Trade Sold under False Pretenses authors Nicolas Loris and Ben Lieberman write:

The goal of cap and trade is to drive up the costs of energy in order for people to use less of it. Because just about every business uses energy to produce goods and must pay their own electricity bills, the cost of production for businesses increases, and consumer demand falls for two reasons:

1.Price hikes on goods reduce demand, and
2.People have less disposable income due to higher energy prices.

Overall, production cuts and reduced consumer spending destroy jobs and slow economic growth, which further increases unemployment.

This legislation is bound to impact the poor and the middle class severely in the form of increased prices and fewer jobs. Sadly the environmental benefits are very dubious. This is yet another illustration of a powerful special interest group- environmentalists- throwing roadblocks in the way of prosperity. The environmental sloganism has an air of religiosity to it.

An Obamanomic Clunker

The Foundry's Morning Bell: Cash for Clunkers, A Case Study in Why Obamanomics Will Fail, shows why micromanagement of the economy is doomed to fail. Does the use of government funds to enable people to trade in their older vehicles for newer models make sense? From the article:

Sens. Dianne Feinstein (D-CA) and Susan Collins (R-ME) are open to allocating more money for the program, but only if the rules are changed so that the program might actually do something for environment; because right now it is not. Edmunds.com auto analyst Jessica Caldwell explains why: “What you buy has to have an increase in fuel economy from what you traded in. But in some cases, that increase can be minimal. Owners of large pickup trucks like a Ford F150 only have to buy a replacement that increases efficiency by one mile per gallon. And they still get a $3,500 rebate. The environmental impact is negligible and the impact on national fuel demand and consumption is very small. The only real benefit in a like-for-like swap can be improved emissions standards on newer vehicles. Rather than discourage those people, they included them in this program.” Caldwell didn’t even mention the pollution costs of actually building a new car and the disposal of the old car, rather than just the pollution caused by driving the vehicle.

The environmental impact must be more than negligible if we transfer money from some Americans to others to enable them to drive newer vehicles. Emotional attachment to environmentalism leads to the type of expensive non-solutions we observe in the clunker program. We cannot afford playing with the economy and pretend environmental programs. Working Americans deserve more than this.

Mythology Breeds Repetitive Errors

The opinion piece titled Cheering for Obama Stimulus Buys Into 1930s Myth, which was written by Amity Shlaes, speaks to what can happen when history becomes shrouded in myth rather than portrayed realistically. Shlaes notes parallels between today's circimstances and those that existed during FDR's presidency but the parallels are not the ones Obama supporters are likely to focus on. The New Deal did not bring on a speedy recovery. The full recovery awaited World War II and its aftermath. This article quote was particularly revealing of the historic reality in my view:

Nor did FDR’s maneuvering cause a speedy bounce-back. The Dow waited until the mid 1950s to regain its 1929 peak. You can’t imagine Obama suggesting that his New Deal would be successful if it got the Dow back to its autumn 2007 high in 2030.

If we had to wait until 2030 before the Dow fully recovered how many people would label current strategies a good approach?

I also found informative the company Commonwealth & Southern's intent to fulfill lighting needs in the South. Credit for that went to the government enterprise known as the Tennessee Valley Authority whose accomplishments came with taxpayer funding and at the expense of businessmen. So the question is: could and would the same outcome have been achieved through private companies? That approach would have spared the federal treasury.

A Stimulus or More of the Same Old Same Old?

“Stimulus” 101 Update: The Trillion Dollar Spending Plan Passes House is a Heritage Foundation article. This is very telling:

The “Stimulus” Bills Your Family – $819 Billion is equivalent to borrowing $10,520 from EVERY FAMILY IN AMERICA. This borrowed money is equivalent to what the average family spends on food, clothing, and health care in an entire year.

This alarming illustration of the magnitude of government spending is followed by the pithy observation that lawmakers are acting as if we would never have recessions if the government could prevent them through increased spending. What we actually are witnessing is vodoo economic policy. It takes the form of politicians behaving as if they have invented a means of avoiding age old growth/recession cycle patterns. But if the claims are grandiose the spending itself is rather ordinary. More for education, more for medicaid, more pork and more green spending. Perhaps some of the increases can be justified in and of themselves. But if authorizing more money for existing programs is the key to avoiding recessions, then it is most amazing that this cure was not discovered before.

What we have is another scam. Promises that cannot be fullfilled and which incur great costs. More on the real costs in the next blog on this subject.