Free Markets, Free People


Cap-And-Trade And Health Care

Some relatively good news and some bad news. The good news has to do with “cap-and-tax” as the WSJ article cited refers to “cap-and-trade”:

Tennessee Republican Lamar Alexander called it “the biggest vote of the year” so far, and he’s right. This means Majority Leader Harry Reid can’t jam cap and tax through as part of this year’s budget resolution with a bare majority of 50 Senators. More broadly, it’s a signal that California and East Coast Democrats won’t be able to sock it to coal and manufacturing-heavy Midwestern states without a fight. Senators voting in favor of the 60-vote rule included liberals from Wisconsin, Michigan and West Virginia. Now look for Team Obama to attempt to impose cap and tax the non-democratic way, via regulation that hits business and local governments with such heavy costs that they beg Congress for a less-harmful version.

I say relatively good news because the author is right – if the Obama administration can’t get it through Congress, there’s little doubt they’ll look for an administrative way to impose cap-and-trade through the executive branch. One route may be through the EPA.

Of course, there is always the distinct possibility that one of the Democratic Senators who is presently against limiting the filibuster will be pressured into changing his mind. And then there are always the RINOs.

But the possibliity remains that the cap-and-trade economy killer may be defeated in Congress, or at least delayed for a while. If passed, you could rest assured we’d not be seeing an economic recovery anytime soon.

However, cap-and-trade isn’t the only problem on the horizon. The health care push will be coming up soon as well, now that Congress has passed the Obama budget blueprint with no Republican support.

The most important remaining fight this year is over health care. Democrats seem intent on trying to plow that monumental change through with only 50 votes, even as they negotiate to bring along some Republicans. We hope these Republicans understand that a new health-care “public option” — a form of Medicare for all Americans — guarantees that the 17% of GDP represented by the health-care industry will be entirely government-run within a few years. This is precisely Mr. Obama’s long-term goal, though he doesn’t want to say it publicly.

It is a back-door means of claiming the reforms are “market” oriented while setting up the system to be quietly shifted to government control. And this at a time when more and more doctors are leaving the Medicare system because of low payment.

In the case of health care, the use of “reconciliation” appears to be a possiblity.  That means, as an exception to the rule which now requires 60 votes for cloture on all measures of law, the Senate could require a mere majority (51 votes) to pass this monstrosity and see the government devour another 17% of GDP.

The game plan is fairly evident. Grace-Marie Turner, president of the Galen Institute, said in an interview:

“We really have a pretty good idea of the outline of the plan they are going to be proposing,” she said. They’ll want to “require everyone to have health insurance and require all employers to pay.”

Since some companies and individuals may not be able to afford that, the taxpayers will be told they are making up the difference, she warned.

The real danger, she suggested, is that with a government-run program, private insurance soon will start disappearing.

“If you expand access to government programs, more and more will drop private coverage,” she said. “A lot of this is going to be, I fear, replacing the private coverage with taxpayer supported coverage.”

That will just raise the costs even higher, and be the first step to what she expects eventually will be “a monopoly player.”

Routed through the government bureaucracy, the same inefficiencies that every government run health care service will emerge. And as with any system in which unlimited demand meets finite supply, some sort of rationing will take place. Since government will be the monopoly player, as Turner calls it, that rationing won’t be by price, as it now works, but instead by denial of service:

Already, she said, $1.1 billion is being allocated for “comparative effectiveness studies.”

That will be “what treatments are good and bad, what’s going to be available to us or not. That’s the first step toward rationing,” she said.

That $600 billion dollar “downpayment”, as Obama calls it, will eventually morph into a deficit of trillions. Why? Because the promise is low-cost universal health care. And there is no such animal that is worth a tinker’s dam.


EPA Set To Kill The Economy

Here’s an item which, in the midst of the financial crisis, will probably be overlooked and underreported. However, it has the potential to destroy any economic recovery should we ever get one rolling.

The Environmental Protection Agency sent a proposal to the White House on Friday finding that global warming is endangering the public’s health and welfare, according to several sources, a move that could have far-reaching implications for the nation’s economy and environment.

The proposal — which comes in response to a 2007 Supreme Court decision ordering EPA to consider whether carbon dioxide and other greenhouse gases should be regulated under the Clean Air Act — could lay the groundwork for nationwide measures to limit such emissions. It reverses one of the Bush administration’s landmark environmental decisions: In July 2008 then-EPA administrator Stephen Johnson rejected his scientific and technical staff’s recommendation and announced the agency would seek months of further public comment on the threat posed by global warming pollution.

“This is historic news,” said Frank O’Donnell, who heads the public watchdog group Clean Air Watch. “It will set the stage for the first-ever national limits on global warming pollution. And it is likely to help light a fire under Congress to get moving.”

Actually I prefer to think of it as the excuse the Democratic Congress has been looking for to implement cap-and-trade. “The Court has required the EPA to consider whether CO2 is a pollutant and the EPA has so declared – our hands are tied!” And in such a convenient way.  Al Gore thanks you.

Naturally business interests are not at all happy with the development.  

 In December 2007 EPA submitted a written recommendation to the White House urging the Bush administration to allow EPA to state officially that global warming is a threat to human welfare. But senior White House officials refused to open the document and urged Johnson to reconsider, saying such a finding would trigger sweeping regulatory requirements under the 45-year-old Clean Air Act. An EPA analysis had found the move would cost utilities, automakers and others billions of dollars while also bringing benefits to other economic sectors.

Any guess as to which “economic sectors” EPA’s analysis says will “benefit” from sweeping regulatory requirements costing the utilities and automakers billions? My guess is they really don’t exist in any major form at this moment, and what does exist is chasing vaporware. But those millions of “green collar jobs” have to be funded somehow, don’t they?

But can you guess what else is lurking out there?  

Our old friend, the “Law of Unintended Consequences”.  Not only would every business in our land be effected, so would every “stimulus” project aimed at improving the infrastructure:

“This will mean that all infrastructure projects, including those under the president’s stimulus initiative, will be subject to environmental review for greenhouse gases. Since not one of the projects has been subjected to that review, it is possible that the projects under the stimulus initiative will cease. This will be devastating to the economy.”

Some of the defenders of all of this will try to wave it away by claiming the administration will make exceptions for various industries and it will certainly do so for the infrastructure projects.

But Bill Kovacs, vice president of environment, technology and regulatory affairs at the U.S. Chamber of Commerce knows how this process will end up working, having witnessed similar scenarios over the years:

“Specifically, once the finding is made, no matter how limited, some environmental groups will sue to make sure it is applied to all aspects of the Clean Air Act.

That’s not a threat – that’s a promise. It is precisely how environmental groups have leveraged every environmental ruling and finding in the past. Of course, those who don’t learn from history are doomed to repeat it. And here we go …


“Climate Change” And The Obama Administration – Huge Power Grab In The Offing

No doubt this will somehow end up being blamed on “global warming”:

A rocket carrying a NASA global warming satellite has landed in the ocean near Antarctica after an early morning launch failure.

The mishap occurred Tuesday after the Taurus XL rocket carrying the Orbiting Carbon Observatory blasted off into the pre-dawn sky from California’s Vandenberg Air Force Base.

“Orbiting Carbon Observatory”? It is apparently now the “Submerged Carbon Observatory”.

In other climate change news, it seems the new “Climate Czar” is ready to rock and roll on the question of carbon regulation:

President Barack Obama’s climate czar said Sunday the Environmental Protection Agency will soon issue a rule on the regulation of carbon dioxide, finding that it represents a danger to the public.

The White House is pressing Congress to draft and pass legislation that would cut greenhouse gases by 80% of 1990 levels by 2050, threatening to use authority under the Clean Air Act if legislators don’t move fast enough or create strong enough provisions.

Note that last line – certainly what one would expect an unelected “czar” to do, wouldn’t you say? Note also that the EPA intends to declare CO2 a “danger to the public”. Yes friends, the gas you exhale as a part of your respiration, the one that plants use in photosynthesis, is suddenly going to be a “danger to the public”.

Officially recognizing that carbon dioxide is a danger to the public would trigger regulation of the greenhouse gas emissions from coal-fired power plants, refineries, chemical plants, cement firms, vehicles and any other emitting sectors across the economy.

All those economic sectors and industries which are supposedly going to be engaged in our recovery via infrastructure improvement, providing critical power and fuel or on the list to be rescued by bailout funds. Does that make any sense at all?

Critics of putting an expensive premium on carbon say that such a schedule may be overly optimistic given the global financial crisis and the ramifications that putting a cap on greenhouse gases would have across nearly every sector of the economy. Tough action too fast, they say, not only could curb manufacturing and create an energy crisis by halting new power plant construction, but also could force a rapid migration of businesses overseas to cheaper energy climes.

But zealots don’t really care about such things – I mean, this is about “saving the planet” you know? And this isn’t just about Browner. She has some powerful backing:

Specifically, Obama wants an economy-wide law – instead of just some major emitting sectors – and to auction off 100% of the emission credits, which analysts say could exponentially increase the cost of emitting, as well as the pay-off for low-carbon projects.

So, given this, does anyone still doubt that we’re going to be in this recession for quite some time once the Czar throws the lever on this little power play (no pun intended)?

Wait, there’s more.  If you’re at all concerned with the expanded power this gives the federal government, you ain’t seen nothin’ yet:

Separately, Browner said the administration was also going to create an inter- agency task force to site a new national electricity transmission grid to meet both growing demand and the President’s planned renewable energy expansion. Siting has been a major bottleneck to renewable growth, and lawmakers and administration officials have said they’re likely to seek greater federal powers that would give expanded eminent domain authorities.

Hope and change.


How Not To Handle A Recession, Yet Take Advantage Of A “Crisis”

Unproven science is apparently going to drive an administrative (instead of legislative) push to regulate carbon dioxide. In the middle of a “crisis” which President Obama calls the worst since the 1930s, the EPA is apparently going to drastically raise the cost to do business in critical sectors:

The Environmental Protection Agency is expected to act for the first time to regulate carbon dioxide and other greenhouse gases that scientists blame for the warming of the planet, according to top Obama administration officials.

The decision, which most likely would play out in stages over a period of months, would have a profound impact on transportation, manufacturing costs and how utilities generate power. It could accelerate the progress of energy and climate change legislation in Congress and form a basis for the United States’ negotiating position at United Nations climate talks set for December in Copenhagen.

Note that none of the “change” appears to be good for the US or its consumers. Instead, we’re likely to see it put even further stress on families on the margin and drive more layoffs and higher unemployment.  But the world will love us, or at least the UN.

I don’t think there’s any question at the moment as to whether Obama is going to govern as a centrist or liberal, is there?