Howard Rich's Blog

May 18, 2009

Waxman-Markey cap-and-trade scheme will wreck U.S. economy

From the Washington Examiner

House Energy and Commerce Committee Chairman Rep. Henry Waxman, D-CA, has teamed with Rep. Edward Markey, D-MA, chairman of the House Select Committee on Energy Independence and Global Warming, to produce the latest in a series of “cap-and-trade” bills designed to reduce carbon-dioxide (CO2) emissions. Such emissions are produced when carbon-based fuels like petroleum and coal are burned to create energy to run things like electric power plants, automobiles and air conditioning systems. These emissions must be reduced because they are allegedly causing the earth’s atmosphere to heat up, with all sorts of lethal consequences following, not excluding death, destruction and the Final Apocalypse of All Mankind. The problem for such advocates, however, is that earth’s average temperatures have been declining for a decade, and a fast-growing number of climate and other scientists now question the root idea of a global warming crisis. These critics are increasingly banding together with elected officials and other experts in the public policy arena who see cap-and-trade schemes like Waxman-Markey as fatally flawed on two counts.

First, under Waxman-Markey, the government would establish a schedule of emissions reductions – 70 percent by 2030 – and a program of “credits” for businesses that meet the schedule. Those that don’t meet it can buy credits from companies that do, thus satisfying the government’s emission reduction mandate. The problem is that even under the most optimistic scenario, achieving the Waxman-Markey reductions would have only a negligible effect on global temperatures. Europe’s similar cap-and-trade program has been in effect for five years, yet has had no measurable impact on global temperatures. The U.S. effort is likely to fail, too, for the simply reason developing countries, particularly China and India, aren’t going to hobble their expanding economies, which will be dependent upon carbon-based fuels for the foreseeable future. Thus, at best, Waxman-Markey will reduce average global temperatures by much less than one degree.

That reduction highlights the second flaw, which is the excessive cost of achieving virtually no reduction in global temperatures. The conservative Heritage Foundation’s Center for Data Analysis used an econometric model of the U.S. economy to measure the projected impact of Waxman-Markey and found that by 2035, it would:

  1. Reduce aggregate gross domestic product (GDP) by $7.4 trillion,
  2. Destroy 844,000 jobs on average, with peak years seeing unemployment rise by over 1,900,000 jobs
  3. Raise electricity rates 90 percent after adjusting for inflation
  4. Raise inflation-adjusted gasoline prices by 74 percent
  5. Raise residential natural gas prices by 55 percent
  6. Raise an average family’s annual energy bill by $1,500
  7. Increase inflation-adjusted federal debt by 29 percent, or $33,400 additional federal debt per person, again after adjusting for inflation.

That is a prescription for wrecking American prosperity for decades to come.


We Need National Term Limits

In a Letter to the Editor, U.S Term Limts President Phil Blumel talks about national term limits in the Wall Street Journal.

In his May 11 letter (“Haven’t You Noticed Term Limits Are in the Constitution”), Thomas J. Miranda claims that “the Constitution already provides for term limits,” but that people “are too stupid” to do their constitutional duty and vote their representatives out of office.

He is right that over 90% of U.S. House incumbents are routinely re-elected to their seats, but “stupidity” is not the explanation.

In 2008, 55 incumbent seats went unchallenged. In many more seats, the incumbent was challenged by a drastically underfunded candidate who didn’t receive meaningful support from their own party. And many of these were simply gadflies.

This situation did not occur because people are stupid, but for the very rational reason that against such odds it does not pay for successful, goal-oriented people to run for office against incumbents. It is rational for parties to avoid using limited resources on unwinnable seats. Meanwhile, special interests quite rationally fill the coffers of and maintain their relationships with entrenched incumbents.

For these reasons among others, voters get lousy choices and incumbents are practically unbeatable. Term limits would change this dynamic by providing open, competitive races at regular intervals in every congressional seat. It’s a smart idea.

Philip Blumel

Atlantis, Fla.

Potential candidates know that the chance of defeating an incumbent is so small that it’s not worth the effort.

With term limits the number of candidates for an open seat would be much larger. They wouldn’t be running in a race skewed by the advantages of incumbency.

And then, I hope, with new, term-limited members in Congress the rest of the Constitution would have a better chance to operate as it should.

George Rosser

Charlotte, N.C.

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