Opinion Forum

Capping, Trading, and Self-Destructing

July 15th, 2009

Former Alaska Governor Sarah Palin attacked the Administration’s Cap and Trade proposal in a column in The Washington Post yesterday. She made some very valid, very important points about the problems with Cap and Trade, but her argument was focused on energy production.

Here is my “top three” list of problems with Cap and Trade — problems that were not, in my opinion, given enough emphasis by Governor Palin:

Problem 1: Now is the Wrong Time

We have a very sick economy. Manufacturing businesses are being pushed to their limit by an economy that is providing few new opportunities to sell their products at a decent profit. As a result, they are reorganizing, freezing wages, laying off workers, stopping their profit sharing and, in many cases, closing their doors. So why now? Why, at this worst time of all is President Obama so determined to add new burdens to our manufacturing industries? Possible answer: His focus is global warming — he doesn’t care about the “bodies” that lay in the path between the problem and the solution.

Problem 2: Cap and Trade is Completely Unilateral

We will be adding financial burdens and creating personal disasters here, in the United States, so we can reduce our carbon dioxide (CO2) emissions while the rest of the world continues to pollute. We need an “if” statement in our legislation: if the industrialized countries around the world force their polluters to reduce their emissions by some figure (lets say 10%) we will force our polluters to do the same. If they refuse to do to their economies what Obama is so keen on doing to ours, we are being foolish to punish our economy just because of our president’s pig-headed determination to be “Green” (God how I’m starting to hate that word!).

Problem 3: Cost of Living

Here’s an excerpt from a June 1st column in The Washington Post — the column is the work of Martin Feldstein, whose resume includes: professor of economics at Harvard University, president emeritus of the nonprofit National Bureau of Economic Research, and former chairman (from 1982 to 1984) of the Council of Economic Advisers.

The Congressional Budget Office recently estimated that the resulting increases in consumer prices needed to achieve a 15 percent CO2 reduction — slightly less than the Waxman-Markey target — would raise the cost of living of a typical household by $1,600 a year. Some expert studies estimate that the cost to households could be substantially higher. The future cost to the typical household would rise significantly as the government reduces the total allowable amount of CO2.

Oh boy, just what we needed — a raise in our cost of living by a minimum of $133.00 a month. If Cap and Trade becomes a reality, start packing your own lunches, start looking for a used bicycle with a basket to help save gas on short trips to the store, and maybe you can cut back on some of those medications you’re taking.

There are many other problems with Obama’s proposed Cap and Trade legislation. To find out more, start by reading Martin Feldstein’s column, Cap-and-Trade: All Cost, No Benefit.

Also read a factual, unbiased description of emissions trading in How Stuff Works.

(This article was also posted at My View from the Center.)

Articles written by Harvey Grund
Tags: cap-and-trade, Feldstein, Obama, Palin
Categories: Economics, News, Politics | Comments (5) | Home

5 Responses to “Capping, Trading, and Self-Destructing”

Clarissa | July 15th, 2009 at 9:18 am

I have to disagree with you completely, Harvey. Something needs to be done about the environment. Of course, we can sit there waiting for a better moment, or seeing whether other countries will start first. But the end of that road is ecological disaster. If the US want to be the world leader, they should set the example.

“If Cap and Trade becomes a reality, start packing your own lunches, start looking for a used bicycle with a basket to help save gas on short trips to the store, and maybe you can cut back on some of those medications you’re taking.”

-This is something every one needs to start doing. I don’t see what’s so wrong with such a scenario. People rely too much on cars and needless medications, anyways.

As to Palin’s article, it’s the most inept piece of writing I’ve seen in a while. I just finished a post about it: http://clarissasbox.blogspot.com/2009/07/she-just-wont-go-away.html

Tom | July 15th, 2009 at 11:42 am

Clarissa, I read your post and wrote a comment, including what I think is a better approach than the cap-and-trade energy bill.

You might want to re-think your observation about riding bicycles and taking less medication. Not everyone lives in a big city with adequate public transportation, and not everyone lives close enough to where they need to go to ride bicycles. Also, not everyone is physically capable of riding a bicycle very far, if at all. And what are those needless medications, anyway? Prozac, etc? Maybe. But what about expensive, life-sustaining medications such as those needed to control high blood pressure, elevated cholesterol, diabetes, etc?

Harvey | July 15th, 2009 at 10:57 pm

Clarissa,

I will also have to disagree with you! I don’t disagree that the environment is an issue but where are your priorities? You would take a chance on destroying our economy because of some disaster that MAY happen a thousand years in the future? And perhaps that “something” that needs to be done could be a little less “taxing” on the people who, when allowed to make and sell their products employ people. And perhaps that “something” could be done in small stages instead of implementing a massive program TODAY!

As to the U.S. wanting to be a “world leader” — I don’t even know what that means in real terms — that’s just poli-speak. I certainly don’t want our country to be considered a leader — I want our country to be considered a POWER! A military power and an economic power — when you consider the bunch of misfit countries in the world that you want the U.S. to set an example for, that’s the best example: Peace through Strength!

My comments about packing your own lunches and etc. were intended to do nothing more than emphasize my point — the government will be taking another $133.00 a month out of our pockets (and thousands monthly out of the pockets of the business men who won’t be able to grow their businesses) just for the purpose of setting that hollow example to the world.

Sorry Clarissa, I have to say you’ve been relying too much on the wisdom of Al Gore!

Brian Bagent | July 16th, 2009 at 9:51 am

Folks, I do disagree that we are heading towards ecological disaster.

We may actually be entering a period of global cooling. In addition, as I pointed out in this article, the global climate computer models are a bit less than reliable. Well, that’s an understatement. They’re garbage.

I’m not really interested in scientific consensus. Scientific consensus for centuries was that the earth was flat and the center of the universe. For centuries, it was scientific consensus that the body’s health was controlled by the Four Humours. For centuries, it was believed that the howl induced in bullets fired out of rifled barrels was the scream of a demon. For centuries, it was believed that flies spontaneously formed in fetid meat, that you got malaria and cholera from breathing bad air (malaria is actually Latin for “bad air,” mal aria), and that the bubonic plague was a punishment from God.

Brian Bagent | July 16th, 2009 at 10:00 am

Harvey, $133/month is a very conservative estimate. It is very likely that Cap and Trade is going to kill domestic oil production. That affects everything. If it happens, it will demonstrate the validity of Milton Friedman’s theories.