The cap and trade fiasco

Toward the end of the Weimar Republic in Germany there was a joke going around Berlin about why the street sweepers had to be extra vigilant. People were afraid if they let any scraps of paper blow around in the streets that the Kaiser would come running out of the Reichstag and sign them thinking they were orders from Hitler.

That about summarizes how I see the energy/cap and trade/climate change/Waxman-Markey bill passed by a slim majority in Congress last week.  Congress took its vote late Friday (always a good time to confess your scandal or sneak through bad legislation) and as their luck would have it celebrities were dying like bugs on a windshield all through the week and weekend. This guaranteed that the finest minds in American journalism wouldn’t be available to report on the bill.

But the details are starting to come into focus now and it is an awful, awful bill; perhaps the worst piece of legislation to come from any freely elected governing body ever. Conservative business groups don’t like it. The liberal environmentalists at Greenpeace don’t like it. Even the father of the modern global warming theories, Dr. James Hansen doesn’t like it.

The only groups who appear to like it are the big corporations and industry associations that lobbied (under the radar before any of us had any clue as to what was happening) to make sure they stood to profit from the bill or at least escape most of its provisions. I’m sure the big environmental groups lobbied too but it looks like they got snookered badly in the late innings.

The vote turned out a lot closer than Speaker of the House Nancy Pelosi thought, 219 to 212. Apparently the bill was so stinky that on first run it looked like it would not have enough votes to pass the House. So the leadership sweetened the pot for a few of their reluctant colleagues by tossing their districts a few multi-million projects. Such well timed irony. As we head toward that long weekend that celebrates our Independence and we think of America’s Founding Fathers, who risked everything for our liberty, we should never forget that there are legislators from Florida who will sell the whole country, the economic engine of the free world, down the drain for a hurricane research center.

So what’s wrong with this bill? Let us count the ways.

1. It won’t do anything to reduce greenhouse gasses. By the time the bill’s authors gave out all their credits, offsets and indulgences, the bill had no teeth. The biggest polluters in the world: Russia, China and India have already said they’re not going to follow our example.

2. It will cost you plenty; big businesses hardly at all. Figure 17 cents for every gallon of gas or diesel you use in your business. That’s just what you’ll pay extra at the pump. It doesn’t include the 77 cents per gallon the oil companies say they’ll tack on as pass-along costs. Given industry average operating hours these combined costs will run about $1,680 extra for a single backhoe per year and about $4,200 per year for a 20-ton excavator. Try passing along those costs to a housing industry still struggling to right itself. But big utilities and agribusiness get free credits that don’t start phasing out until 2025. As a small business or individual, your failure to hire a lobbying firm means you pay immediately.

3. Not a single one of the legislators who voted for the bill has read it. There are actually two versions of the bill. Nobody in Congress can say for sure which version they signed (hence the joke about the Kaiser and Hitler above.)

4. The bill’s complexity has nothing to do with the complexity of the problems that face us. All these credits and tradeoffs and fine print details are simply provisions that will allow politicians in the future to shake down affected industries for campaign contributions. Give the pols the money and they’ll make sure your industry gets exemptions/credits/offsets… it what you want. If your industry has the vigorish, it’s cheap insurance. If not you’re screwed. This is as much an incumbent protection bill as anything. The same thing has happened to our federal tax code, which doubled from 26,300 pages to 54,846 pages between 1984 and 2003–every page sold to the highest bidder.

5. It is the largest single transfer of wealth from the private sector to the federal government in the history of the country. This is a tax, make no mistake about it, and it will cost every American an estimated $450 a year, every family of four $1,800. And this is just the start. Remember that the Social Security “fund” started  as just one percent of payrolls during the Great Depression. It’s now 15 percent and plunging towards insolvency.

The bill runs to 1,500 pages or so, depending on who you ask; 1,200 pages plus about 300 pages of amendments, proofreading corrections and copyediting changes. The only people who know fwhat’s in it are the lobbyists and special interests who wrote it.  You can be sure it’s chock full of provisions for florescent light bulbs and energy efficient appliances that do half as good a job as the older models did—Congress loves these nickel and dime regulations. Remember the first few years of low-flow toilets?

I would be impressed if any of the network or cable television news organizations or the Associated Press or the New York Times put a team of reporters to work to ferret out and report on the details of this bill. After all, in terms of financial impact, it is the most significant piece of legislation ever passed by the House, save for Social Security and Medicare. But that’s not going to happen now that Michael Jackson is dead and creating such a drain on newsroom budgets.

Perhaps Big Media is ignoring the details of this bill because most D.C. insiders say it’s not going to get passed in the Senate, at least not it this form. After all the Senate is where the fevered dreams of the House go for a sober cooling off. But this bill is so brazenly bad the Senate could not possibly make a silk purse out of this pig’s snout and ought to reject it outright. How about hitting the Reset button? If the Senate starts amending Waxman-Markey, it will only be because they see in it the potential to line their campaign coffers as well.

For a list of Congressmen who voted for Waxman-Markey, go here.  I was pleasantly surprised at the number of Democrats and liberals who did not vote for it. Come election day, do the right thing and help the ones who did vote for it find another line of work.