Well if it is not the death blow, it is expected to pummel us into a standing eight count. Desperate times require desperate measures. Let's face it. This carbon tax thingy and the reliance on foreign oil thingy have been building for some time. Well lookie here, a "proactive" bill that increases taxes and addresses these two critical issues. That's a threefer. Let's ram this one thru the house.
I am all for oil independence, a greener earth, job growth, etc, but can this be delivered without massively increasing taxes and destroying the current energy system? My thoughts are at the end.
In Cap and Trade; a Solution to a No-existent Problem with Devastating Consequences they throw CnT under the buss. "Obama’s said, “At a time of great fiscal challenges, this legislation is paid for by the polluters who currently emit the dangerous carbon emissions that contaminate the water we drink and pollute the air we breathe.” This is false. He incorrectly substitutes carbon for CO2 and it is not a pollutant for air or water; it occurs naturally in both. It’s true industries producing CO2 will initially pay through Cap and Trade but they will pass the costs to the consumer. A critical question is who pays when all the “polluters” are out of business?". And this, "Spain was touted as the model because it led all countries in money and commitment to electricity from renewable energy. Spanish economics professor Gabriel Calzada calculates that, ”each new job entails the loss of 2.2 other jobs that are either lost or not created in other industries because of the political allocation --sub-optimum in terms of economic efficiency --of capital.” A pretty brutal article covering what the author believes are lies and deceptive practices used to force this bill thru.
Before the tree huggers out there go nuts, check out Cap-and-trade does more harm than good. "We would support legislation in Congress to address climate change if it were capable of accomplishing that goal. Unfortunately, despite the best intentions of its proponents, the bill known as Waxman-Markey would disable our ability to reduce greenhouse-gas emissions for at least a decade, hugely increasing the risk of irreversible climate calamity." Oops, they got the tree huggers pissed off too. "While U.S. officials vowed to learn from Europe's mistakes, the bill sponsored by Reps. Henry Waxman (D., Calif.) and Edward Markey (D., Mass.) has many of the same flaws and adds massive "offsets" that blow away the "cap" in "cap-and-trade." Offsets allow polluters to, for example, pay to preserve an acre of forest so they can continue burning coal above the cap. The concept's problems are legion and well-documented."
What does the WSJ have to say on the subject? Who Pays for Cap and Trade?. "We asked the White House budget office for the assumptions behind its revenue estimates, but a spokesman said the Administration doesn't have a formal proposal and will work with Congress and "stakeholders" to shape one. We were also pointed to recent comments by Mr. Orszag that he was "sure there will be enough there to finance the things that we have identified" and maybe "additional money" too. In other words, Mr. Obama expects a much larger tax increase than even he is willing to admit." In other words they have no freaking clue what the net effect will be. NONE.
How about the Washington Post? Something positive, right? Cap-and-Trade: All Cost, No Benefit. "The proposed legislation would have a trivially small effect on global warming while imposing substantial costs on all American households. And to get political support in key states, the legislation would abandon the auctioning of permits in favor of giving permits to selected corporations." Excuse me? "in favor of giving permits", I smell a GE rat somewhere. Feldstein concludes, "In my judgment, the proposed cap-and-trade system would be a costly policy that would penalize Americans with little effect on global warming. The proposal to give away most of the permits only makes a bad idea worse. Taxpayers and legislators should keep these things in mind before enacting any cap-and-trade system." and he's no idiot.
A Primer from Market Ticker - Carbon Credits: A Scam Denninger cuts thru the crap like no one else. Simple and pure.
Let's try another. No let's not. Let's try one from the "other side".
Huffington Post has Cap and Trade What? where you get bullshit like this, "While driving down pollution, cap and trade will also generate a lot of money for investing in energy efficient programs and clean energy. These investments, in turn, will help to create over 2 million new American jobs in just 2 years." Friggin moron. Weee, smell the flowers and look at all the good that will come out of this. This is what the other side sees folks. It's all rosy and perfumed up. Friggin lipstick on a pig is all this crap is.
Here is the root of all the propoganda to support the bill - 10 Reasons to Support the Waxman-Markey Energy Bill from the authors themselves.
I'll address them one by one - Emphasis my response
1. The Waxman-Markey bill will create jobs by spurring investment in renewables and efficiency. Bullshit, it will eliminate more jobs as companies are taxed to death.
2. Boosting investments in low-carbon energy will help the United States regain the lead in the manufacture and sale of clean-energy technologies. Shouldn't we be able to do this anyway?
3. The global warming threat is growing, and we have no more time to lose. Bullshit, see Feldstein quote above
4. The bill would cut greenhouse gas emissions enough to equal pollution from half a billion cars. Whatever. Orzag can't even quantify the net effect and you can pull this out of your ass?
5. It would increase new building efficiency by 50 percent. Possible
6. It limits impact from energy costs on families and would make emitters pay to pollute. No, it would force the companies to pass along the increased costs to the consumers.
7. It provides a smooth transition for energy-intensive industries. If Britan and Spain are having such a tough time with this then what the funk makes you think it will work here?
8. Opponents of action would continue the status quo of doing nothing, which cost the average family a $1,000 increase in energy bills over the past eight years. See answer to #6. If I am getting redundant, so are they.
9. Investments in carbon capture-and-sequestration research and development to reduce global warming pollution from coal-fired power plants. Ok, so go screw the industry that produces 46% of our power. That's really friggin smart.
10. The bill has critical industry support. From what industry? Let me guess that Immelt and GE are the primary backers of the bill. How about trying to educate the public and letting them decide. Now that is a novel idea.
Bottom line folks is that this has not worked anywhere it has been tried and most likely will not work in the form it is being shoved thru congress in. I would love to see a thoughtful bipartisan bill passed, because I believe that, if done properly, this could work. till then I think the feather in the "cap" that is to produce jobs, save the earth, blah, blah, blah will become the thorn in the ass.
Traders edge - consider buying the power companies and GE IMO. Their prophets are going to soar and you'll need the appreciation in the stocks to pay for the higher prices that will be passed along.