Monday, January 4, 2010

Continuation of a Discussion on Cap and Trade

starting here at Wine and Bowties.

Re-posted for reasons of convenience.

My rebuttal has been posted in red.


You’re certainly correct that the fees incurred on energy companies would mean a rise in energy prices for the consumer. I am, however, in favor of energy being more expensive. Regardless of how much we bitch about gas prices, the fact is that we have so much pollution largely because we drive too much. If gas becomes more expensive, we Americans would have to restructure our lives around it. In many European countries, for instance, the price of gas is significantly higher, but as a result, public transportation services are much more efficient, affordable and useful.

Higher energy prices means a lot more than just higher gas prices for your typical automobile commuter. Higher energy prices mean more expenses for businesses. Companies are going to shell out more money from their bottom line. This is going to slow up our economy. So unless you are an “expert” on anthropogenic warming, I suggest taking a neutral position regarding raising energy prices at least 1. until you know more about whether or not it is even necessary to address carbon emissions and 2. until our economy is better able to take such a hit. Raising energy prices at this time will deal a significant blow to the country’s productive capacity. And it is our productive capacity that is our biggest hope for recovery.

Public transportation is great; and it works really well in Europe because much of Europe was designed before the car. Over in the states, the prospect of public transportation is much more daunting in places like LA which were designed with the car as the primary mode of transportation. Sure we can come up with systems, but it will take billions of dollars in planning, resources and labor. We all know our state credit card is maxed out

And I doubt our pollution is largely because we drive too much, at least on a world scale. “The 15 biggest ships emit about as much sulphur oxide pollution as all cars combined.” ( It really depends what you define as pollution. If its carbon dioxide, then theoretically you will have the EPA taxing cow farts and overseeing plankton spawning projects. One of Lee’s better points is that we ought to know for sure what the facts are with CO2 and warming before we go writing costly legislation that could potentially be unnecessary. I would like to reiterate that unless you are an expert on anthropogenic global warming, it will only hurt our situation by calling for prescriptions to a disease you do not understand.

Of course, simply selling carbon credits is not the solution. Of course there would need to be a cap, which Annie in fact says should be the job of the EPA. The whole point of having an EPA is so that they can exercise some regulatory power over pollution. The notion that that would somehow allow to them to regulate “every facet of American life” is an unfounded load of bullshit. I mean, what “factual evidence” is that based on. Certainly not the legislation he’s referring to. The ultimatum comes in the form of “solid caps” and “strong laws”, rather than the lax ones proposed in the current Cap & Trade proposal.

Which brings me to my next point. I still think Lee is a dummy, but let me elaborate a bit. His political theory is vastly oversimplified, and his thinking is a strain of the kind of unfounded fear-mongering that dominates right-wing politics these days.

First off Lee states that our country became the richest in the world because we are a “free nation with limited government”. The fact is that our nation’s economy almost collapsed completely with the Great Depression. How did we escape this calamity? Big government solutions initiated by Roosevelt. Relief programs, taxation, public works programs, and reglulation of unscrupulous business practices. Without massive amounts of government aid and regulation, we simply would not have been able to dig our economy out of the depression.

Right here is another debate in itself. There are plenty of examples where limited government has played a significant contribution to our nations “wealth”. I simply do not know enough history to sit here and hash out a debate regarding whether or not limited government vs big government solutions have contributed more or less to the best aspects of this country. I’ve heard many argue also that WWII was the primary factor for getting the U.S out of the Great Depression. Like Michael Moore put it in Capitalism:ALS, we bombed the hell out of our competition, so we naturally became the leading car manufacturer in the world. What I will say is that Roosevelt era programs is not an end all be all argument to quashing the assertion that we are the richest nation in the world as a result of free government. The dynamics are far too complex to try and invalidate the point with such a simple rebuttal.

And let’s get something straight. The notion that the invisible hand of the free market will somehow lead to a less problematic solution than government regulation makes no sense.

In certain respects the invisible hand is a much better solution than government intervention. Keeping this on a general level, look at the U.S government subsidizing agriculture. Once a railway was built right down the middle of Mexico, cheap u.s agriculture flooded the Mexican markets and devastated local economies; and Jamaica, etc. In terms of clean energy, it may be a better idea having venture capitalists invest in methane harvesting plants for cattle feces rather than having the EPA tax it. This too is too complex and debatable for a simple response.

Yes there is in all likelihood a happy medium of free market and big government policies. Naomi Klein’s book the Shock Doctrine does a brilliant job at highlighting the failures of the free market systems of Milton Friedman and total reliance on the invisible hand. And yes I am with you 100% that our wealth and prosperity came at the destruction, poverty and exploitation of other countries; that our wealth is distributed inequitably; and that there is an inherent problem with greed and self interest being an underlying drive of our current capitalist system. I am also with you that Lee does have a right wing bias, especially with his seemingly black and white tone regarding socialism as being completely negative. If you think he is a dummy for being so gung ho about limited government, completely anti-socialism and wealth redistribution, that is fine with me. I find it to be relatively justified. Yet I still feel that those issues aside, he presents valid points that should not be overlooked i.e increasing energy costs, not having money for dividends, not making widespread legislation without addressing critical discrepancies in the proxy vs instrumental data., etc.

Furthermore, the invisible hand is not something we should lock up and throw and away the key. If anything please consider that there are certain systematic functions of our day to day that are better suited for the invisible hand than big government. There may be a role better served by the invisible hand than big government when it comes to cleaner energy. Just look at the Prius. It may be slow, but it will in all likelihood be steady. People vote with their dollars, and if there are enough people willing and able to vote “green” then you can bet there will be a capitalist looking for a way to deliver.

The nature of the free market benefits corporate giants. Sure we are the richest nation, but our prosperity comes at the price of destruction, poverty and exploitation of other countries. Not to mention, the wealth, however great it may be, is distributed more inequitably here than almost anywhere in the world. Free market dogma posits greed and self-interest as the tendency to which we should entrust global economy, rather than the desire for justice or equality. That’s the inherent problem.

Wealth redistribution and socialism always seem to come into the conversation. But the fact that those words automatically generate a negative response doesn’t really make sense. For one, it’s not the Cold War anymore; contrary to what Glenn Beck might tell you about “Comrade Obama”, we’re not fighting a war of containment right now. The fact is that our economic policies arenot entirely capitalist or socialist. They’re somewhere in between which is why we have social services, support programs, good hospitals, and taxes. Put the market completely in charge of those things and god knows what happens.

The fact is our government would benefit from adopting more traditionally “socialist” traditions. For one, we could use higher corporate and property taxes, particularly on the wealthiest of the wealthy. The corporate powers that control resources continue to hoard wealth, living in absurd luxury while our infrastructure suffers. To my mind, it’s time that wealth gets reinvested into education, healthcare reform, or as Annie suggested, perhaps even foreign aid, given the ill-gotten benefits our country has reaped from poorer nations.

(real quick on the above. I went to private high school where the per capita cost for each student was lower than surrounding public schools, yet our school managed to put out a better quality education with less per capita resources. It’s a slippery slope you get on saying our infrastructure is suffering because wealthy corporations are hoarding too many resources. Often it’s the inefficiencies of entrusting our government to address specific localized needs from the top down that gets us into trouble)

As far as Global Warming is concerned, like I said, I’m not the expert. But a three minute video that cites two charts doesn’t convince me that more than 90% of the scientific community is wrong.

Read more!