Dear Readers: I am turning the Shrine over to my dear friend and mentor, Professor Athena (our guest columnist who is highly placed in the financial services industry).
In reading the discussion draft summary from none other than the U.S. House of Representatives, the bullet points used to urge passage of the bill totally obscure the jobs cost in language designed to sound “earth-friendly”. I like to call it energy sweet talk, as in telling someone you really want to sleep with whatever it takes to get them to agree.
In this version of Congress’ wooing of the global warming advocacy groups and adjacent selling to the public that such highly restrictive legislation will “create jobs”, the underlying requirements are that retail electricity suppliers must meet a certain percentage of their load with renewable resources (wind, biomass, solar, or geothermal). This requirement is 6% in 2012 rising to 25% in 2025. One notes immediately the disadvantage for smaller retail electric suppliers, who would be driven out of business by such demands in how they buy and sell energy. Their only choice would be to purchase it from a large “renewable” supplier who would of course mark it up more than what they could sell it for wholesale to their largest purchasers, hence we have boutique energy pricing. If you live in any area of the country with either a higher-than-average energy demand (say a large city or populous state) or if you live in a small area serviced by a rural electric cooperative, you will note an immediate and sizeable increase in your utility bill. That is the result of supply and demand, a private-sector concept that public-sector elected representatives who have never held down a job other than one paid for by taxpayers have an amazing amount of difficulty understanding. In addition, the “carbon capture and sequestration” area of the bill kills coal production, period. The “clean fuels and vehicles” section gives massive amounts of taxpayer dollars in support of green cars. Anytime the phrase “grant” is used, think unlimited slush fund and lots of “discretionary money” allocation. One wonders at this point if the green cars are so good, why not let the private sector develop them and sell them without the taxpayer funding but hey, we’re talking about creating jobs here in the midst of closing a whole bunch of Chrysler and GM franchises. Everybody wants to buy their car from the DMV, right? The “smart grid and electricity transmission” section establishes “good” and “bad” appliances. How could I know my toaster had gone over to the red light district? This area is expanded upon in Title II of the bill, where it requires federal inspectors for home appliances as well as construction in new and existing homes for sale and re-sale. This area of the bill will require that you get on a list for a federal building inspector to go over your home and “pass” or “fail” its construction and its appliances as to “energy efficiency”. The EPA is the one responsible for “ratings”. This should go over really, really big with realtors and builders and home buyers and sellers who are struggling in the absolute worst real estate market since we had homes without electricity. Which we may have to go back to, with this law. It establishes a “SEED” fund (are they actually proud of that acronym?) for partnering with states. It is federal assistance, paid for by you but doled out by Washington, D.C. bureaucrats. Finally, it gives the federal government agencies the power to buy up long-term renewable energy contracts. Here I wonder about the price risk of such and the paradigm that if anything ordinary (like say a hammer or a toilet) can be mishandled at the point of a government contract, so can energy costs as well. Get ready for the $500 laundry load.
By far the most potentially damaging part of the bill is the exchange for newly-created “carbon credits”, the liberal agenda’s equivalent of the pet rock. Carbon credits as an established exchange would allow those who pollute to basically buy their way out of jail with offsetting carbon credits elsewhere in the world and not specifically in the U.S. In other words, if you ever doubted that liberal Democrats really like the rest of the world (say the rainforests of the Amazon) better than they do the U.S., you can now erase those doubts. Yet what is really disturbing here is the potential for speculation in those markets which are not backed by anything real (did we learn nothing from the damage done to the U.S. economy through widespread use of Credit Default Swaps?) and which the Waxman-Markey bill authorizes the EPA to use to create a “reserve” to offset rises in energy prices. In other words, they can be used to create artificial caps and floors on energy. You know, like they did for the U.S. housing markets. What a deal. In case you aren’t convinced, it also establishes “rebates” which are designed to artificially support U.S. industries this bill will penalize, and sets “adjustments” for U.S.-bound exporters to “cover” the carbon contained therein. You know, in case U.S. consumers had an idea they could buy things cheaper away from a federally-regulated energy market.
The bill does many things relative to jobs. In fact it specifically creates five new federal oversight agencies that did not exist previously, and greatly expands the role of the EPA. The jobs it will create are government jobs, increasing the size of the federal government in a bill that is designed to ration energy to the elite who can afford to pollute, eliminate consumer choices, and effectively tax all energy consumption through new federal requirements to existing private energy companies. In punishing the energy-producers through increased government oversight, EPA standards, “consumer cumulative energy savings” and other such love-talk, Congress has in effect passed the largest tax initiative ever for U.S. businesses and ultimately U.S. consumers. Let’s talk numbers.
The Heritage Foundation estimates through their macroeconomic modeling that job losses added to the economy just in 2012 through Waxman-Markey will number at least 2 million. They have gone so far as to also estimate the job losses and decrease in personal income for each Congressional district. Though we can use enough common sense to extrapolate that new “green jobs” will indeed not be created by the very companies just required to fire workers to pay for the increased costs of production because of the new law, looking at the sheer massive nature of the numbers in black and white is staggering to say the very least. http://www.heritage.org/Research/EnergyandEnvironment/wm2504.cfm. Other groups such as the Brookings Institute and the National Chamber of Commerce also predict huge increases in job losses as a result of this bill. Numerous recent Op-Ed pieces in the Wall Street Journal have expressed the same. Congress isn’t listening. Not when they have the chance to create more government jobs and feel all warm and fuzzy about global warming and stuff. Never mind that the average Joe may be freezing because he can’t afford to pay his heating bill.
In one piece of legislation, Congress has not only cost jobs for the economy and put America at a decisive disadvantage for trade, but has set a new precedent of intrusion into your life, costing you more at the pump and more on your utility bill, even causing you to have to “rate” your toaster, curling iron, blender, electric fan or heater, and inspect your new or existing home for standards they deem energy efficient enough. Leaving us to ask what indeed is personal enough to our lives that we don’t need the government to inspect or pass standards for.
Please join us in contacting the US Senate to protest this legislative hydra!
MUT’s Money Links:
Here is a well reasoned six-month evaluation of the Obama administration’s current economic policies and their effects. This is a great blog on finance and the economy, which I intend to add to the blogroll shortly! There is also a wonderful Wasington Post piece likening Obama to the captain of the Titanic. In keeping with my Iconic American Movie Moment quotes (From The Titanic), here is so apt dialog that suits, as it distinguishes the theory from the experience:
Lewis Bodine: [narrating an animated sequence of the Titanic’s sinking on a TV monitor] Okay here we go. She hits the berg on the starboard side, right? She kind of bumps along punching holes like morse code, dit dit dit, along the side, below the water line. Then the forward compartments start to flood. Now as the water level rises it spills over the watertight bulkheads, which unfortunately don’t go any higher then E deck. So now as the bow goes down, the stern rises up. Slow at first, then faster and faster until finally she’s got her whole ass sticking up in the air – And that’s a big ass, we’re talking 20-30,000 tons. Okay? And the hull’s not designed to deal with that pressure, so what happens? “KRRRRRRKKK!” She splits. Right down to the keel. And the stern falls back level. Then as the bow sinks it pulls the stern vertical and then finally detaches. Now the stern section just kind of bobs there like a cork for a couple of minutes, floods and finally goes under about 2:20am two hours and forty minutes after the collision. The bow section planes away, landing about half a mile away going about 20-30 knots when it hits the ocean floor. “BOOM, PLCCCCCGGG!”… Pretty cool huh?
Old Rose: Thank you for that fine forensic analysis, Mr. Bodine. Of course, the experience of it was… somewhat different.
For laughs on a related subject, check out Little Miss Attila’s Obama PIDDLE Loop.