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Conservatives &Fiscal Policy Richard Falknor on 18 May 2009 07:37 pm

Green Lawmaking in Congress: Big Business vs. Freedom

The Waxman-Markey bill would set many records: the biggest tax increase in history; the biggest government intervention in people’s lives since the Second World War; the biggest transfer of wealth from consumers to special interests in American history; and the biggest opportunity for corruption and manipulation by Wall Street traders ever created.  It would cause consumer energy prices to go up relentlessly for decades, create some jobs while destroying millions of jobs, and produce perpetual economic stagnation.  The Waxman-Markey energy-rationing bill cannot be fixed.  It must be defeated. — Myron Ebell

The supporters of “green” legislation in the U. S. Congress apparently have no fear of even bigger government.

Of course, statists of all stripes are in the forefront of such support. That is to be expected. For cap-and-trade legislation can bring in enormous tax revenues.

But conservatives should understand that many large business organizations are also lining up on the wrong side of the prosperity line.

By way of background, we posted last month an illuminating insight from one conservative expert explaining this kind of corporate approach – –

Extract from Jonah Goldberg’s  “Democrats and Businessmen, Sitting in a Tree . . . Big corporations love free enterprise, as long as it isn’t too free” from National Review, April 6, 2009 (subscription only): ” . . .[W]e’re constantly hearing from strategists who insist that the answer is to loosen up, baby — become more socially liberal while staying fiscally conservative. The key problem is that fiscal conservatism, whatever its merits, isn’t economic conservatism in the free-market tradition of Hayek, Friedman, Reagan, et al. As a generalization, when people say they are fiscal conservatives but social liberals, what they are really saying is that they are, simply, moderate liberals. Olympia Snowe, Susan Collins, Arlen Specter, and the rest aren’t socially conservative, and they aren’t economically conservative either.” (Underscoring Forum’s.)

Today the Free Enterpriser reports in their “Showdown at ConocoPhillips”  here – –

 “Corporate support of cap-and-trade is largely responsible for the American Clean Energy and Security Act of 2009, which was introduced by Congressmen Henry Waxman (D-CA) and Ed Markey (D-MA).  The bill is going to be marked up in the Energy and Commerce Committee this week.

We believe the policy goal of cap-and-trade, which is to reduce consumption of fossil fuels, is bad for ConocoPhillips – the third largest oil and natural gas company in the U.S. – and our economy.”

You can listen here and here to two illuminating exchanges with CEO Jim  Mulva of ConocoPhillips last week.

Maybe Tim Carney writing in the Washington Examiner last Friday here has one answer explaining corporate support for cap-and-trade – –

“Waxman’s current bill, supported by power companies, will be touted as a industry-environment compromise, making some observers believe it is a moderate regulation. In truth, it is just as burdensome on the end-user—consumers and electricity users—but instead of government pocketing all of these added costs, some businesses will get a cut.”(Underscoring Forum’s.)

. . . . .

An early winner looks to be the power companies, represented in Washington by the Edison Electric Institute. U.S. automakers, soon to be controlled in part by the labor unions who so generously fund the Democratic Party, are also among a handful of likely beneficiaries of this legislation.

Waxman’s bill, set to be drafted in committee next week, is centered on a cap-and-trade mechanism for curbing greenhouse gas emissions. Under cap-and-trade, the government requires many GHG emitters, such as power plants and factories, to ‘pay for’ their emissions with special credits, with government controlling the supply.

If an emitter needs more credits, he buys them on the open market from someone—another emitter or a dealer—who has excess credits. The question for lawmakers: How to allocate the credits originally. Environmentalists want Washington to auction them all. Affected industries want credits given away.

Considering the anti-business and pro-environment rhetoric of ruling Democrats, you might expect all businesses would have to pay for all emissions. But the rule of thumb in Washington—at least as true in Barack Obama and Nancy Pelosi’s Washington as it was in George W. Bush and Tom DeLay’s Washington—is that no important bill passes unless a well-connected special interest benefits from it. Following the rule, climate change legislation is starting to look like the stimulus bill: a buffet of handouts.” (Underscoring Forum’s.)

Here is the Heritage Foundation’s current take on the economic consequences of the Waxman-Markey cap-and-trade legislation – –

“Representatives Henry Waxman (D-CA) and Ed Markey (D-MA) modified their global warming proposal from the draft version published on March 31. For the most part, the changes focused on the distribution of the allowance revenue–the equivalent of tax revenue.”

. . . . . . . . . .
“The economic impact of the new draft varies from that of the original draft in several major ways:

  • Compared to no cap and trade, real GDP losses increase an additional $2 trillion, from $7.4 trillion under the original draft to $9.6 trillion under the new draft;
  • Compared to no cap and trade, average unemployment increases an additional 261,000 jobs, from 844,000 lost jobs under the original draft to 1,105,000 lost jobs under the new draft; and
  • Peak-year unemployment losses rise by 500,000 jobs, from 2 million under the original draft to 2.5 million under the new draft.

Though the proposed legislation would have little impact on world temperatures, it is a massive energy tax in disguise that promises job losses, income cuts, and a sharp left turn toward big government.”(Underscoring Forum’s.)

Too many Maryland Republican state lawmakers have already cast questionable votes here and here, and here and here, on so-called green state legislation.

The presumptive Republican candidate for governor of Virginia has put forth what he terms energy plans here and here.

The question for conservatives is whether Maryland and Virginia Republican state lawmakers and statewide candidates will promptly weigh in publicly against the job-destroying energy-taxing Waxman-Markey measure now being marked up in the U.S. House of Representatives and supported by some very big businesses.

In objecting to Waxman-Markey, our Maryland and Virginia Republican politicians might considering tracking the plain-words position of Myron Ebell of the Competitive Enterprise Institute (CEI) here testifying last month on the Waxman-Markey measure – –

“We . . . oppose all domestic measures to ration energy through mandates or taxes. This includes the draft bill, which is the subject of today’s hearing. Each and every title is fundamentally misguided. In our judgment, the American Clean Energy and Security Act cannot be improved enough to warrant enactment. It should not be introduced. If it is introduced, it should be defeated.(Underscoring Forum’s.)

Our Republican politicians who promptly follow CEI’s approach will place themselves squarely in the Reagan camp — rather than among the crony-capitalist crowd. As Tim Carney declared – –

“Cap-and-giveaway is not a matter of toothless regulation as much as an instance of regulatory robbery. The companies being given free credits are not being given free passes from new regulations—they are actually being given free money.” (Underscoring Forum’s.)

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