Charles Huang

Web and Media Associate

Competitive Enterprise Institute

chuang@cei.org

http://www.cei.org

http://www.openmarket.org

202-331-1010

Thomas L. Friedman’s op-ed in the NYT today could have been written by Paul Krugman.  And that’s not a compliment.

Friedman, like Krugman, waxes hysterical about those who are opposing  the cap-and-trade energy bill - those “deniers.” And, also like Krugman, he sets up those opponents as straw men that he can readily knock down.  In today’s article, Friedman worries about U.S. dependence on foreign oil supplied by  ”petro-dictators” and he fears ever-rising prices for increasingly scarce fossil fuels.

So either the opponents of a serious energy/climate bill with a price on carbon don’t care about our being addicted to oil and dependent on petro-dictators forever or they really believe that we will not be adding 2.5 billion more people who want to live like us, so the price of oil won’t go up very far and, therefore, we shouldn’t raise taxes to stimulate clean, renewable alternatives and energy efficiency.

Friedman’s terror about world population growth, especially growth in developing countries, is Malthusian.  (See Julian Simon on population and natural resources in “The Ultimate Resource II.”) . And Friedman  doesn’t seem to want those people to use energy to improve their standard of living.  Here’s what he says about that dream for a better life:

The world keeps getting flatter - more and more people can now see how we live, aspire to our lifestyle and even take our jobs so they can live how we live. So not only are we adding 2.5 billion people by 2050, but many more will live like “Americans” - with American-size homes, American-size cars, eating American-size Big Macs.

Such horror one can’t imagine for a person living at a subsistence level in India or China.

In his article, Friedman says that “clean energy” is the answer to the world’s energy problems.  He embraces  “E.T.” (no, not that visitor from another planet), but “energy technology”  that is carbon-less and efficient.

And we believe the best way to launch E.T. is to set a fixed, long-term price on carbon - combine it with the Obama team’s impressive stimulus for green-tech - and then let the free market and innovation do the rest.

His solution then is to tax conventional energy and subsidize alternative energy sources. Right.  That’s clearly an innovative solution that nobody has thought of.  And how would this affect the population bomb he fears?  Undoubtedly, raising the price of fossil fuels could indeed have an effect on developing countries’ populations.  While waiting for those alternative energy sources to develop, they’ll  continue to face poverty and resultant devastating diseases.  Not surprisingly, Friedman doesn’t address that problem.

On Monday, reports the Washington Post, a coalition of companies including “Nissan, FedEx, PG&E and NRG Energy issued a report calling for billions of dollars in government aid to support the transition of the U.S. vehicle fleet to cars that run on batteries. The group is asking for $124 billion in government incentives over eight years including $13.5 billion for tax credits to build public charging stations.”

What shock! (Pardon the pun.) Aren’t government handouts, including corporate welfare, the answer to all problems? And everybody knows about the big fat surplus the Obama Administration is running. Meanwhile, buyers of electric cars are already getting a fat $7,500 write-off.

Message to electric car sellers and buyers about “range anxiety”: Sounds like a personal problem.

The Competitive Enterprise Institute’s 25-year record of success is made possible by our over 3,000 supporters. Make sure to stop by www.cei.org/support and make a donation to continue your support or become a supporter. Curious about all the possible ways to donate to CEI? Contact Al Canata at acanata@cei.org or 202-331-2280 to find out more.

Charles Huang

Web and Media Associate

Competitive Enterprise Institute

chuang@cei.org

http://www.cei.org

http://www.openmarket.org

202-331-1010

“We must push our trading partners to do their part to curb harmful emissions and we must devise a border measure, consistent with our international obligations, to prevent the carbon leakage that would occur if US manufacturing shifts to countries without effective climate change programs.”

Currently the Senate Environment and Public Works Committee, chaired by Senator Barbara Boxer, has rushed through its own bill without minority input to try to catch up with the House, which passed its cap-and-trade bill - H.R. 2454 — on June 26, 2009. The House bill contains a border tax adjustment measure, while the Senate bill does not.  At least, yet.  But Baucus’ comments are a strong signal that the Senate bill will also include tariffs or border “adjustments,” i.e., taxes.

This unfortunate idea is gaining greater traction among global warming advocates as a way to maintain U.S. competitiveness for industries, such as steel and cement, that would be facing higher costs if an energy suppression bill to address global warming is passed.  Proponents of “border measures” also see this as a way to curtail so-called leakage of carbon-intensive industries and related jobs to other countries without similar constraints. Of course, the common justification for those who want to hobble their competition is the refrain: “Level the playing field.”  In Washington politics, that usually means bringing your competitors down to your level.  Check out this article for some possible consequences.

These endorsements could portend a carbon tariff push in Copenhagen when world climate pukkas gather on December 7, 2009. Luckily for people in the U.S., it’s not likely that a newly minted global warming bill will be in their pockets.

Unemployment is at 10 percent in France, which refused to adopt a U.S.-style stimulus package, and only 7.6 percent in Germany, which adopted a stimulus package that was smaller relative to its economy than ours was.  (Countries that refused to adopt big stimulus packages have fared better than those that imitated President Obama. And the biggest-spending countries have suffered worst in the recession.)

A “broader measure of U.S. unemployment,” including discouraged workers, puts U.S. unemployment at 17.5 percent, reports the New York Times.

As the Post notes, “For many on the left, the lament for years has been: Why can’t America be more like Europe? Why can’t rustic Americans be more like sophisticated Europeans? The sentiment has resurfaced in recent months as the health-care debate has raged on — why can’t the American health-care system be more like Europe’s?”

Well, America is now more like Europe when it comes to unemployment.  But not when it comes to social benefits and protections.  The American Left knows how to import Europe’s failures, but not its successes.

The massive health-care bill passed by the House on Saturday is a classic example.  It would expand health care coverage somewhat, but not to European levels, and it would vastly increase the costs of our health care system, rather than reducing it to European levels.   It would also increase taxes to “European levels of taxation.”  The health care bill contains politically-correct provisions that Europeans would never put up with, like pork for trial lawyers and racial preferences.  And restrictions on national competition in health insurance, which do not exist in Europe.

In France, doctors don’t need to be paid as much, because competing professions, like lawyers, are paid less.  French law is much more conservative than American law when it comes to lawsuits, including lawsuits against doctors.  There are NO punitive damages, and France discourages lawsuits by making unsuccessful plaintiffs pay the other side’s legal bills.  (Other European countries have specialized health courts, rather than American-style jury trials, to cut lawyers’ bills, speedily compensate the injured, and prevent American-style baseless lawsuits against doctors.)  There are no racial preferences — even my Marxist father-in-law, a French trade unionist who likes Michael Moore’s book Stupid White Men, thinks that racial preferences are evil.  French people do not let political correctness shackle their minds the way American leftists do.

Europe is not as far to the left of America as people think, and America’s business climate is already not much more favorable than Europe’s.  For every three ways in which Europe is more socialistic than America, there are two ways in which it is less socialistic than America.  The Obama administration is getting rid of our advantages, but not our disadvantages.

American tort law and family law are much more burdensome, anti-business, and bent on redistribution of wealth, than Europe’s.

Confronted with the specter of new burdens under the health-care bills and global-warming bills backed by the Obama administration, many businesses with the money to do so are afraid to hire people and create jobs lest they be stuck with a large tab for things like health care benefits for newly-hired, less-skilled employees.

The Congressional Budget Office has repeatedly admitted that Obama’s stimulus package will shrink the economy “in the long run.”  It contained welfare and repealed welfare reform.  Unemployment is higher now than if Congress had voted it down.

Charles Huang

Web and Media Associate

Competitive Enterprise Institute

chuang@cei.org

http://www.cei.org

http://www.openmarket.org

202-331-1010

The broken promises include his pledge to enact a “net spending cut,” his promise not to raise taxes on anyone making less than $250,000 a year, and his promise not to sign bills without first giving the public five days of notice.

The Congressional Budget Office says that Obama’s proposed budgets will explode the national debt through massive spending increases, increasing the already large deficits left behind by the Bush administration from $4.4 trillion to $9.3 trillion. His record-setting budgets flagrantly violate his promise to propose a “net spending cut.”

Obama broke his campaign promise not to raise taxes on anyone making less than $250,000 a year by signing into law a regressive excise tax increase to expand the SCHIP program, and by proposing a cap-and-trade energy tax that could charge up to $2 trillion, a massive cost that Obama himself has said will be passed “on to consumers,” as well as homeowners and motorists. (In 2008, Obama privately admitted to the San Francisco Chronicle that if he was elected, electricity bills would “skyrocket” under his administration, but it didn’t report that.)

He also broke his promise not to raise taxes by backing health-care bills that would impose a laundry list of new taxes on the middle class, including a tax on uninsured people.  Americans for Tax Reform earlier summarized the tax increases in ObamaCare: an individual mandate tax of $900 per individual or $3800 per family (if you don’t have health insurance); an employer mandate tax of $400 per employee if health coverage is not offered; an “excise tax on high-cost health plans”; a “medicine cabinet tax”; capping Flexible-Spending Accounts (FSA’s); abolishing most HSAs; and increasing tax penalties for HSAs.

The costly cap-and-trade energy bill supported by Obama would lead to big tax increases, administration officials privately have conceded, even though they publicly claim otherwise.  “Officials at the Treasury Department think cap-and-trade legislation would cost taxpayers hundreds of billion in taxes, according to internal documents circulated within the agency and provided to The Washington Times” by CEI.  It could raise household taxes by $1761 per year, equivalent to a 15 percent tax increase.   It would also result in “loss of steel, paper, aluminum, chemical, and cement manufacturing jobs.”  (Obama earlier admitted that “under my plan of a cap and trade system, electricity rates would necessarily skyrocket.”)

Although cap-and-trade backers claim it will cut greenhouse gas emissions, it may perversely increase them and also result in dirtier air, as well as harming forests and water supplies.   It would enrich politically-connected corporations, and result in massive destruction of the world’s forests.   By expanding ethanol subsidies and mandates, it would cause enormous “damage to water supplies, soil health and air quality.” Ethanol subsidies have already resulted in forests being destroyed in the Third World, and by diverting cropland to fuel production away from food production, they have already caused famines that have killed countless people in the world’s poorest countries.

Over and over again, Obama has broken his campaign promise to give the public five days of notice before signing bills into law, including his very first law, the trial-lawyer backed Lilly Ledbetter Fair Pay Act. Obama also repeatedly made false claims about the Supreme Court decision that the Ledbetter law overruled, misstating the facts of that case and how long it gives employees to sue over pay discrimination (the Court did NOT say that employees have to sue even before discovering discrimination).

Obama broke seven campaign promises dealing with transparency and clean government in signing the $800 billion stimulus package, much of whose contents were secret until shortly before Congress voted on it, and whose 1400 pages went unread by most Congressmen who voted on it.  (It repealed welfare reform and contained loads of welfare, pork, and waste, while wiping out jobs in the export sector.)

Obama’s broken promises are part of a larger pattern of dishonesty. Obama claimed his $800 billion stimulus package was needed to avert “irreversible decline.” But the Congressional Budget Office concluded before and after its passage that the stimulus package will actually cut the size of the economy in the long run. Obama’s budgets don’t add up, either, piling up $9.3 trillion in red ink, according to the Congressional Budget Office, a staggering $2.3 trillion more than Obama claimed.

The Washington Examiner explains how the bill will lead to deforestation, and thus increase greenhouse gas emissions in the long run.

The bill, which is loaded with pork for special interests, is backed by Obama, who once admitted that under his cap-and-trade scheme, electricity and utility bills would “skyrocket” and coal-fed power plants would go “bankrupt.”  Treasury Department analysts estimated it could increase taxes on the average American household by $1,761 per year.

The bill also contains environmentally harmful provisions, such as massive ethanol subsidies, which will result in “damage to water supplies, soil health and air quality.” Ethanol subsidies have resulted in forests being destroyed in the Third World, and caused famines that have killed countless people in the world’s poorest countries.

Sure, Just What We Need: Yet Another Regulatory Government Agency
Jonathan Moore’s Letter to the Editor in the Boston Globe


>>Best of the Blogs
My Power Company Wants to Sell Me Climate Indulgences
by Ivan Osorio
The scheme appears simple enough. The mailer says, “When you sign up for Dominion Green Power, you add a little extra to your monthly bill which Dominion will use to purchase certified renewable energy certificates on your behalf.” And what does the consumer get in return? Well, that’s a good question. Dominion’s Green Power Web page features a video that features a family that “pays an extra 1.5 cents per kilowatt hour, and the money is used to purchase renewable energy certificates to support green energy development through a vendor called 3 Degrees.” And what does 3 Degrees actually do?

“Saving” Jobs Isn’t Always Good
by Michelle Minton
The Obama administration is patting itself on the back for saving the jobs of thousands of educators by doling out stimulus funds earlier in the year. . . When it comes to your child’s education, does that really seem like such a bad thing-should every teacher good or bad continue to teach? That is what the White House and the Dept. of Education assert when they pat themselves on the back for “creating” and saving 250,000 education jobs. Not only are they retaining many school-workers who, perhaps, deserve to be let go, but they are also preventing the emergence of a private market for education.

Reps. Maloney and Adler Push True Bipartisan Stimulus - Sarbanes Oxley Relief
by John Berlau
Led by Democratic Reps. Carolyn Maloney of New York and John Adler of New Jersey, two amendments will likely be introduced to the Investor Protection Act that would truly stimulate the economy by partially liberating investors, entrepreneurs and innovators from the shackles of a seven-year-old “investor protection” law that has added billions in costs while providing little if any benefits to investors and doing nothing to prevent the recent financial crisis: the Sarbanes-Oxley Act of 2002.


>>Liberty Week Podcast
Episode 66: The War on Commerce
We start with the lobbying war over net neutrality rules, Sen. Kerry’s search for a cap-and-trade legacy and a campaign finance scandal from Japan. We then move on to the White House’s War on Commerce and the allegedly immoral profits in the healthcare insurance industry.


>>Support CEI
Like what you read?

The Competitive Enterprise Institute’s 25-year record of success is made possible by our over 3,000 supporters. Make sure to stop by www.cei.org/support and make a donation to continue your support or become a supporter. Curious about all the possible ways to donate to CEI? Contact Al Canata at acanata@cei.org or 202-331-2280 to find out more.

Charles Huang

Web and Media Associate

Competitive Enterprise Institute

chuang@cei.org

http://www.cei.org

http://www.openmarket.org

202-331-1010

The scheme appears simple enough. The mailer says, “When you sign up for Dominion Green Power, you add a little extra to your monthly bill which Dominion will use to purchase certified renewable energy certificates on your behalf.”

And what does the consumer get in return? Well, that’s a good question. Dominion’s Green Power Web page features a video that features a family that “pays an extra 1.5 cents per kilowatt hour, and the money is used to purchase renewable energy certificates to support green energy development through a vendor called 3 Degrees.”

And what does 3 Degrees actually do? According to its website:

3Degrees enables businesses and individuals to advance their climate needs and strategies We do this by originating and providing Green-e Energy Certified Renewable Energy Certificates and third-party certified Verified Emission Reductions (aka, carbon offsets) from around the world to help our partners reduce their environmental footprint. We also provide customized consulting services to help businesses address their climate- and energy-related challenges.

This is precisely the kind of climate policy rent-seeking that cap-and-trade policies are designed to encourage. As CEI’s Marlo Lewis has warned, this kind of “certificate” can only have value under a cap-and-trade scheme. In light of the difficulty that the Obama administration and Congressional Democrats are having in pushing through climate legislation, 3 Degrees’ business model may be riskier than its founders had envisioned.

But whatever the future of climate policy, one thing is for certain: Private subsidy schemes like this net the consumer nothing tangible. And for those who do go in for that sort of thing, the warm, fuzzy feeling of feeling less guilty about helping to warm the planet must wear off fairly quickly.

Now, Brand has written a new book, called Whole Earth Discipline: An Ecopragmatist Manifesto, in which he takes on these environmental shibboleths in a more concerted fashion.  On American Public Radio’s Marketplace program yesterday, host Kai Ryssdal discussed the new book with Brand.  Asked what prompted him to write the book, Brand said that,

“My fellow environmentalists have been wrong about a couple of issues and were getting in the way of important things we should be doing, both with biotechnology and with nuclear technology, and in terms of how we think about cities, and in terms of how I know we’re going to think about geoengineering–that is, direct intervention in the climate.”

Ryssdal contrasted Brand’s earlier support for the back to the land movement with his current belief that big cities are better for the environment.

“Not only big cities, but big slums … that’s how [poor people in the developing world] are getting out of poverty.  They’re emptying out a lot of the subsistence farms that have been tough on the landscape all over the world, moving into towns for opportunity, building jobs for each other.  They’re also moving up what’s called the energy ladder, toward more and better grid electricity.  By and large the cities are probably the greenest thing that humans do.”

On his support for biotech crops, Brand said,

“Already, the crops we have now, the herbicide-tolerant and the insect-resistant crops … [are] getting what amounts to higher yields. You can raise more food on less land, and all of that is good for ecology in general and the climate particularly.”

Challenged that critics call them Frankenfoods, Brand replied,

“The idea there was that Dr. Frankenstein was doing something against nature, and that somehow the genetically engineered food crops are against nature.  And as a biologist, I’m just baffled by that line of argument because agriculture has been in that sense against nature for 10,000 years. That we’re finally able to do more precise tuning of the crops is a huge gain, not a loss.”

Data Deflates Threat-Multiplier Hype
by Marlo Lewis
“Climate change is a threat multiplier” is the new trendy rationale for Kyoto-style energy rationing. One hears little these days about Al Gore’s nightmare vision of death and destruction from ever more powerful and frequent hurricanes, catastrophic sea-level rise, or a warming-induced climate shift into a new ice age. This story line is too implausible for most grownups to swallow or patronize, no matter how desperate they are to look green.

FTC Sets its Sights on Bloggers
by Elizabeth Jacobson
The blogosphere has been up in arms over the last two weeks, ever since the Federal Trade Commission issued an update to its “Guides Concerning the Use of Endorsements and Testimonials in Advertising.” In the past, these guidelines have determined the kinds of research claims companies or celebrity endorsers can make about products in advertising. With the recent update, though, the FTC has chosen to extend its reach onto the Internet, applying its regulations to blogs, Facebook pages, even Twitter feeds



>>Liberty Week Podcast
Episode 65: Your TV Violates State Law
This week, host Richard Morrison and guest-host Jeremy Lott interview CEI Senior Fellow Gregory Conko about Congress’ health care debacles, er, uh, bills. Energy Policy Analyst William Yeatman joins in to discuss avoiding another housing crisis, California’s proposed ban on big screen TVs, the Abramoff scandal’s latest jailing, and the FTC’s war against free speech.


>>Support CEI

Like what you read?
The Competitive Enterprise Institute’s 25-year record of success is made possible by our over 3,000 supporters. Make sure to stop by www.cei.org/support and make a donation to continue your support or become a supporter. Curious about all the possible ways to donate to CEI? Contact Al Canata at acanata@cei.org or 202-331-2280 to find out more.

Charles Huang

Web and Media Associate

Competitive Enterprise Institute

chuang@cei.org

http://www.cei.org

http://www.openmarket.org

202-331-1010

The heat was generated by Chapter 5 of the book, which deals with global warming and mitigation techniques, such as geoengineering.  Since the chapter is no longer available for perusal on Amazon, it’s hard to take part in the debate.  But here’s one of the co-authors, Dubner, defending the chapter:

Our global-warming chapter has several sections. We discuss how it’s a very hard problem to solve since pollution is an externality - that is, the people who generate pollution generally don’t pay the cost of their actions and therefore don’t have strong incentives to pollute less. We discuss how even the most sophisticated climate models are limited in their ability to predict the future, and we discuss the large measure of uncertainty in this realm, given that global climate is such a complex and dynamic system. We discuss some of the commonly held misperceptions about climate and energy, including the fact that the historic relationship between global temperature and atmospheric carbon dioxide is more complicated than is generally thought.

The real purpose of the chapter is figuring out how to cool the Earth if indeed it becomes catastrophically warmer.

Here’s how Krugman, with his usual understatement, puts down the authors:

. . .they didn’t even look into the debate sufficiently to realize what company they were placing themselves in.

And that’s not acceptable. This is a serious issue. We’re not talking about the ethics of sumo wrestling here; we’re talking, quite possibly, about the fate of civilization. It’s not a place to play snarky, contrarian games.

Here’s a review of the whole book in the Financial Times this past weekend.

Charles Huang
Web and Media Associate
Competitive Enterprise Institute
chuang@cei.org
http://www.cei.org
http://www.openmarket.org
202-331-1010

Commissioner Julia Levin claims the ban “will actually save consumers money and help the California economy grow and create new clean, sustainable jobs.”

It is easy to imagine the ban costing tv manufacturing jobs; less so the jobs that would take their place.

Fortunately, the ban isn’t terribly enforceable. Consumers can just drive to Arizona, Nevada, or Oregon to get the kind of tv they want.

A final point on semantics: what does “sustainable” even mean, anyway? It is a meaningless buzz term, right up there with “synergy” and “paradigm.” This decade’s equivalent of “social justice.”

If anything, use of the word “sustainable” signals that a person knows not of what they speak. If you’re unable to defend a proposal on the merits, just use fashionable buzz words that poll well.

But even a glance at their article shows how little substance there is to any of these promises.   No new nuclear power plants will be built unless there is somewhere to store the waste.  Here’s what Kerry and Graham say about that: “We must also do more to encourage serious investment in research and development to find solutions to our nuclear waste problem.”  In other words, not finish the Yucca Mountain site in Nevada that the federal government has already spent billions on, but which Majority Leader Harry Reid (D-Nev.) and President Obama oppose.  Carbon capture and storage technology is more than a decade away from being commercially available.  Even if it works and is affordable, environmental pressure groups will sue to block permits for the pipelines and underground storage sites necessary to transport and store the pressurized carbon dioxide.  Here’s what Kerry and Graham say: “…we need to provide new financial incentives for companies to develop carbon capture and sequestration technology. “  Not a word about limiting lawsuits that would block projects.

Kerry and Graham support a border tax to protect American jobs from products produced in countries that don’t commit to reducing their emissions.  That is an admission that energy prices are going to go up and so are the prices of goods and services that are produced with or use energy.  Consumers will be poorer as a result and hence will be able to afford fewer goods and services.  Bye-bye manufacturing jobs.  They also claim that their as-yet-to-be-written bill will reduce our imports of foreign oil.  That’s plausible, but not exactly correct.  As our economy declines, we will need less oil.  But it will reduce U. S. and Canadian production first because the production costs are much higher here than in Saudi Arabia.

But is it?

The article concerns three windmills that some fear will obstruct the view of the awesome Mont St. Michelle Abby on the French coast, which becomes an island at high tides. Yet the article also points out that France is very accepting of nuclear power, which provides about 80% of the nation’s energy needs. Another 10% comes from hydro. And the number of windmills in question, three, provide less energy than the smallest nuclear plant made - which is to say those on naval warships.

No, this isn’t really about energy. It’s about politics. It’s making a statement. And quite literally, an ugly one.

Cool Cash to be Made on Warming Mania
Christopher C. Horner’s Quote in the Orange County Register

Curbs on Bonuses Would Simply be an Overreaction
Alex Nowrasteh’s Letter to the Editor in the Financial Times


>>Best of the Blogs
Obamacare’s Provisions Have Already Been Tried, and Failed, at the State Level
by Hans Bader
When the Senate Finance Committee votes on President Obama’s health care plan, it won’t even have the text of the bill in existence. It will just be voting on a summary of what the bill will supposedly contain. . . The desire of Obamacare’s supporters to avoid any scrutiny or review of their bill is understandable, because its provisions have already been tried, and failed, at the state level.

Regulation of the Day 56: Kahlua in Ohio
by Ryan Young
Kahlua contains 20% alcohol in 49 states. But in Ohio, it is 21.5%. Weird, huh? Turns out regulations are the reason. My friend Jacob Grier pointed me to an article showing that Ohio groups alcoholic beverages into two categories: wine/beer and spirits. Any beverage below 20% alcohol is in the wine/beer category and can be sold in grocery stores. Anything above 20% is classed as a spirit and can only be sold in state-run liquor stores.

Eminent Domain Abuse in New York (Upstate Edition)
by Marc Scribner
Yesterday, U.S. District Court Judge Frederick Scullin dismissed the majority of a lawsuit filed by J.C. Penney against the owner of the mall where it leases retail space. In its complaint, J.C. Penney alleged that the mall owner violated the terms of its lease agreement, including provisions that required the retailer’s consent before any significant alteration to the mall was allowed to take place.  The court found that the mall was not liable because the Syracuse Industrial Development Agency had condemned the property through eminent domain, which stripped all rights J.C. Penney had to its retail space per the original lease agreement.


>>Liberty Week Podcast
Episode 63: Suing the Government Into Honesty
We start with CEI’s FOIA fight with the U.S. Treasury, 7-Eleven’s attempt to give consumers a big gulp of government and the solution to a jobless recovery. We then move on to union pension politics, Ireland’s regrettable embrace of EU hegemony and some scantily-clad Olympic News.


>>Support CEI
Like what you read?
The Competitive Enterprise Institute’s 25-year record of success is made possible by our over 3,000 supporters. Make sure to stop by www.cei.org/support and make a donation to continue your support or become a supporter. Curious about all the possible ways to donate to CEI? Contact Al Canata at acanata@cei.org or 202-331-2280 to find out more.

Charles Huang

Web and Media Associate

Competitive Enterprise Institute

chuang@cei.org

http://www.cei.org

http://www.openmarket.org

202-331-1010

Florida Governor Charlie Crist is running for US Senate in 2010–and darned if he’s going to let power utilities’ need for capital during a recession stand in his way.On Thursday, Crist effectively fired two long-standing members of the Sunshine State’s Public Service Commission, replacing them with wholly inexperienced former editorial page editor David Klement and Benjamin Stevens, the chief financial officer for the Pensacola Sheriffs’ Office.

It doesn’t take PhD in political science to get the message here: Florida utility regulators will, in Crist’s words, “put consumers first”–i.e., reject the pending rate hike requests from FPL Group (NYSE: FPL) for $1.3 billion and Progress Energy (NYSE: PGN) for $500 million or else.

[...]

Crist’s move will almost certainly make rate cases more contentious in Florida, and by extension make it more difficult for companies to recover regulated utility investment.

[...]

Ultimately, Florida consumers will suffer most if Crist’s moves really signal a shift to so-called pro-consumer regulation in what’s historically been a model state for utility/regulator relations. Long-term planning for power needs will become problematic, and utilities will pull back capital spending rather than see their balance sheets weakened.

What is surprising is that this upheaval isn’t taking place in an historically contentious state like Missouri or New York. Rather, this is happening in Florida, heretofore a state with very constructive utility/regulator relations.

Crist’s moves are indeed galling in light of Florida’s past history of relatively sound governance at the state level. Now the state’s residents will need to worry about blackouts — in addition to the state being able to shoulder insurance payments — the next time a large storm hits. (Thanks to Margaret Griffis for the Seeking Alpha link.)