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.)

First a bit of background.

In December 2007, Congress passed and President Bush signed the Energy Independence and Security Act (EISA). Among other things, EISA boosted the existing (2005 Energy Policy Act) Renewable Fuel Standard (RFS) from 7.5 billion gallons a year by 2012 to 36 billion gallons a year by 2022. Of those 36 billion gallons, 21 billion gallons must come from “advanced biofuels.”

The RFS is essentially a Soviet-style production quota. Congress, prodded by campaign contributions from the corn lobby, and by presidential candidates jockeying for support in the Iowa Caucuses, decided that central planning of the nation’s motor fuel markets was an idea whose time had come.

To qualify as “advanced” under EISA, a biofuel must (1) be made from plant matter other than corn kernels and (2) achieve a 50% reduction in greenhouse gas (GHG) emissions compared to gasoline, based on a “life-cycle” (wells-to-wheels) analysis. EISA also allows 15 billion gallons a year by 2022 to come from plain old corn ethanol, although to qualify as a “renewable fuel,” corn ethanol from newer plants must achieve a 20% reduction in GHG emissions relative to gasoline — again, based on life-cycle analysis.

EISA mandates the sale of 100 million gallons of advanced biofuel in 2009 and 200 million gallons in 2010 (see p. 6 of this presentation). For years, biofuel lobbyists have been telling us that advanced biofuels are “just around the corner.” But, Matt Carr of the Biotechnology Industry Organization estimated last month that in 2010 volumes will, optimistically, reach only 12 million gallons, Leber reports.

In a sop to the corn lobby, the Waxman-Markey cap-and-trade bill would suspend for five years the EISA requirement for life-cycle analysis to determine whether biofuels qualify as “advanced” or even as “renewable.” Several life-cycle analyses indicate that corn ethanol produces more greenhouse gases than the gasoline it replaces, once emissions from land use changes are taken into account (for a summary, see pp. 4-6 of this report).

The Kerry-Boxer cap-and-trade bill does not contain the five-year hold on life-cycle analysis, and the uncertainty as to which biofuels will qualify under future EPA implementing rules ”chills the investment community,” Carr complains. I’d put the point differently: Strong evidence that corn ethanol is not “climate friendly” jeopardizes the political rents that corn growers and ethanol distillers hoped to extract from climate hysteria.

Leber also notes that, “the industry is also concerned about ambiguous language in both the Senate and House versions of the bill that does not clearly exempt the biofuels component of blended petroleum fuels, such as E10 and E85, from an economy-wide carbon cap.”

Did you get that? The corn-ethanol lobby invoked climate doom to sell biofuel mandates to Congress and the public. But now they say the centerpiece of regulatory climate policy — the cap in “cap and trade” — should not apply to biofuels, even though biofuels emit CO2, and even though several life-cycle analyses indicate that corn-ethanol is more carbon-intensive than gasoline. One law for me, another for thee!

Producers of “advanced” ethanol also complain that they must compete for climate-tech loan guarantees against companies developing solar, wind, and compressed natural gas technologies. The outrage! Why should ethanol producers have to share the greenhouse gravy train with anybody else?

This just in: Sens. Barbara Boxer (D-CA) and Susan Collins (R-ME) today released Biofuels: Potential Effects and Challenges of Required Increases in Production and Use, an August 2009 study by the Government Accountability Office (GAO). One of GAO’s conclusions is that the 45-cent/gallon tax credit that refiners receive for blending ethanol into motor gasoline “may no longer be needed to stimulate conventional corn-ethanol production because the domestic industry has matured, its processing is well understood, and its use capacity is already near the effective RFS limit of 15 billion gallons a year of conventional ethanol.”

The Renewable Fuels Association “panned” the GAO study, Leber reports. Well, what else did you expect? Without the blenders’ credit, a national market for ethanol would not exist. In their PR (if not in their own minds), corn ethanol will always be an infant industry in need of special tax breaks to compete with the big bad oil companies.

What happens if, as seems likely, the industry falls farther and farther behind the EISA ”advanced” biofuel requirements? Here’s my prediction: The Renewable Fuels Association will not lobby to scale back the overall 36-billion RFS; rather, they’ll lobby to raise up the 15 billion gallon ceiling on corn ethanol.

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

202-331-1010

In  his article “Cassandras of Science” he says, “What’s driving this new pessimism? Partly it’s the fact that some predicted changes, like a decline in Arctic Sea ice, are happening much faster than expected. Partly it’s growing evidence that feedback loops amplifying the effects of man-made greenhouse gas emissions are stronger than previously realized. For example, it has long been understood that global warming will cause the tundra to thaw, releasing carbon dioxide, which will cause even more warming, but new research shows far more carbon locked in the permafrost than previously thought, which means a much bigger feedback effect.”

He’s worried about the Arctic ice. Here’s the latest, though. Information from the National Snow and Ice Data Center shows that the Arctic has been rebounding for the past two years. (It hasn’t recovered yet, though.) The minimum sea ice extent in September of 2007 was 4.3 million square kilometers. In 2008, it was 4.7 mill sq km. And in 2009, it was 5.1 mill sq km. If the Arctic ice continues to rebound at this rate of 0.4 mill sq km per year, in two years it will be back to the level seen in 2006 of 5.9 mill sq km. And if it continues at this rate for three years? It will pass the Arctic sea ice minimum in 1995 of 6.1 mill sq km.

Krugman is also worried about the warming tundra releasing carbon dioxide and methane. But CO2Science .org says, “Another scare story came from a scientist who said the last IPCC report underestimated the vast amount of carbon contained in the world’s permafrost, which could be released to the air by rising temperatures. However, a detailed study of this phenomenon (Delisle, 2007) indicates that “permafrost will mostly prevail in this century in areas north of 70°N,” even for an unbelievable warming of 8°C, and that “permafrost will survive at depth in most areas between 60° to 70°N.” This scenario is also supported by the small amount of organic carbon released from permafrost during previous periods of warming, such as the Medieval Warm Period and Holocene Climatic Optimum, when no significant methane excursions were detected in ice core records of either Antarctica or Greenland.” If the Medieval Warm Period, which was warmer than today, didn’t have increased methane, then we won’t see it either.

If Mr Krugman is concerned about the sea bed deposits of methane called clathrates, he would be comforted reading about this six-year study by Petrenko at the University of Colorado, then. Petrenko says, “The results definitely help us to say that it doesn’t seem methane clathrates respond to warming by releasing lots of methane into the atmosphere, which is really good news for global warming.” Petrenko also said that temperatures in Greenland 12,000 years ago had increased about 10 degrees Celsius in 20 years. But it took 150 years for methane levels in the atmosphere to increase by 50 percent. Therefore, the methane did not contribute to that increase.

Arctic hockey stick graphs that claim that the Arctic is warmer now than in the past two thousand years such as this one, rely upon “previously published data from glacial ice and tree rings that were calibrated against the instrumental temperature record.” That tree ring data is now known to have been incorrect. When those graphs are corrected, they will  likely show that around 1000AD the Arctic was warmer but that runaway global warming obviously did not occur.

I can understand that Krugman hasn’t followed the science, but to make comments like this one, Krugman just looks very deceived: “And the industries of the past have armies of lobbyists in place right now; the industries of the future don’t.” The money behind “green” is actually enormous.

So, have you enjoyed the debate over health care reform? Have you been impressed by the civility of the discussion and the intellectual honesty of reform opponents?

If so, you’ll love the next big debate: the fight over climate change.

And Mr Krugman is about to demonstrate his level of civility and intellectual honesty in what only can be described as a pre-emptive strike.  Is this the Krugman Doctrine?

The House has already passed a fairly strong cap-and-trade climate bill, the Waxman-Markey act, which if it becomes law would eventually lead to sharp reductions in greenhouse gas emissions.

Sharp reductions? The Breakthrough Institute, which strongly champions action on global warming, says that the way the bill is structured “U.S. emissions in capped sectors could rise for much–if not all–of the next two decades.” Krugman protects himself against the accusation of outright lies by using the word “eventually,” but without disclosing the ineffectiveness of the bill over the next 20 years, Krugman is already being intellectually dishonest.

But on climate change, as on health care, the sticking point will be the Senate. And the usual suspects are doing their best to prevent action.

Some of them still claim that there’s no such thing as global warming, or at least that the evidence isn’t yet conclusive. But that argument is wearing thin - as thin as the Arctic pack ice, which has now diminished to the point that shipping companies are opening up new routes through the formerly impassable seas north of Siberia.

Krugman condenses a very complex argument over the nature of global warming into one statement and then dismisses it out of hand.  There are very few who deny the heat-trapping properties of greenhouse gases.  There are many who suggest that the influence of these gases on the climate as a whole has been significantly exaggerated.  For instance, I wonder what Mr. Krugman thinks of the recent research of Lindzen and Choi, published in August, which uses actual observations to find that climate sensitivity to greenhouse gases has been overestimated by a factor of six.

As for the Arctic, it has been melting since the end of the Little Ice Age two hundred years ago.  In fact, The Washington Post published a story on a government report that described “a radical change in climatic conditions,” “unheard-of temperatures in the Arctic zone,” and the melting of ice as long ago as November 2, 1922.  The fact that the North-East Passage, a holy grail for traders for hundreds of years, is now open might also warrant some balancing mention of its benefits.

Even corporations are losing patience with the deniers: earlier this week Pacific Gas and Electric canceled its membership in the U.S. Chamber of Commerce in protest over the chamber’s “disingenuous attempts to diminish or distort the reality” of climate change.

PG&E made an odd member of the Chamber of Commerce to begin with, as its profits come about not by commerce but by government regulation.  PG&E’s profits are “decoupled” from the amount of energy it sells.  There are suggestions, by the way, that companies are coming under pressure in the way of threats of activism directed against them if they continue to support the Chamber’s efforts to protect the interests of its members.

So the main argument against climate action probably won’t be the claim that global warming is a myth. It will, instead, be the argument that doing anything to limit global warming would destroy the economy. As the blog Climate Progress puts it, opponents of climate change legislation “keep raising their estimated cost of the clean energy and global warming pollution reduction programs like some out of control auctioneer.”

If the estimated costs rise, that is because people like the bloggers at Climate Progress keep persuading politicians to go for more ambitious programs, which of course cost more. Auctioneers only respond to bids, and it is the bidders who are out of control.

It’s important, then, to understand that claims of immense economic damage from climate legislation are as bogus, in their own way, as climate-change denial. Saving the planet won’t come free (although the early stages of conservation actually might). But it won’t cost all that much either.

Here we are getting to the nub.  Having succeeded in chilling the speech of those who are doubtful about the effect of greenhouse gases on the climate, Mr. Krugman now wants to make it unacceptable to say that policies designed to raise the cost of energy will have any detriment to the economy.

How do we know this? First, the evidence suggests that we’re wasting a lot of energy right now. That is, we’re burning large amounts of coal, oil and gas in ways that don’t actually enhance our standard of living - a phenomenon known in the research literature as the “energy-efficiency gap.” The existence of this gap suggests that policies promoting energy conservation could, up to a point, actually make consumers richer.

Well of course there is waste involved in generating energy.  If there wasn’t so much regulation of energy generation right now, which has the perverse effect of locking in old technology, then we’d actually be a lot more efficient than we are.  However, being more energy efficient does not mean we use less energy.  Mr. Krugman’s own newspaper just recently published an excellent story about the Jevons Paradox, first formulated in 1865, which states, “It is wholly a confusion of ideas to suppose that the economical use of fuel is equivalent to a diminished consumption. The very contrary is the truth.”  This really is Energy 101.

Second, the best available economic analyses suggest that even deep cuts in greenhouse gas emissions would impose only modest costs on the average family. Earlier this month, the Congressional Budget Office released an analysis of the effects of Waxman-Markey, concluding that in 2020 the bill would cost the average family only $160 a year, or 0.2 percent of income. That’s roughly the cost of a postage stamp a day.

Once again, Mr. Krugman is being economical with the truth.  The government studies most emphatically did not find that the bill will cost a postage stamp a day in 2020.  They can only arrive at that figure of $160 a year by discounting twice.  They took the nominal cost - the actual out-of-pocket cost - of the increases in energy prices and worked out what that would be in today’s dollars.  Then they discounted back to find the present value of that figure.  In other words, $160 a year is what you’d have to lock away in a bank account with a guaranteed interest rate today in order to pay your bills in 2020.  If you didn’t do that, the figure from the EPA’s study in today’s dollars (ie not accounting for inflation) is above $2700 a year for a family of four.  The CBO study, meanwhile, admits that it did not attempt a comprehensive study of lost income.

Mr. Krugman also ignores polling evidence that finds that only 10 percent of respondents would be willing to pay more than $100 a year to achieve the supposed benefits of the Waxman-Markey bill.  So even if the cost was just a postage stamp a day, people would still find that cost expensive.

By 2050, when the emissions limit would be much tighter, the burden would rise to 1.2 percent of income. But the budget office also predicts that real G.D.P. will be about two-and-a-half times larger in 2050 than it is today, so that G.D.P. per person will rise by about 80 percent. The cost of climate protection would barely make a dent in that growth. And all of this, of course, ignores the benefits of limiting global warming.

The same argument can be made about global warming itself.  Even with all the supposed dramatic effects of global warming, the United Nations Intergovernmental Panel on Climate Change finds that people all over the world - even in the poorest countries - will be many times richer than they are today as a result of the economic activity sustained by fossil fuels. This demonstrates that a warmer-but-richer world is better off than a cooler-but-poorer world, and we will in fact be best off in the warmest world.  Krugman’s argument here in fact suggests that we shouldn’t do anything about emissions at all.

So where do the apocalyptic warnings about the cost of climate-change policy come from?

Are the opponents of cap-and-trade relying on different studies that reach fundamentally different conclusions? No, not really. It’s true that last spring the Heritage Foundation put out a report claiming that Waxman-Markey would lead to huge job losses, but the study seems to have been so obviously absurd that I’ve hardly seen anyone cite it.

The Heritage Foundation has updated its report and recently defended its methodology in a panel of other modelers, who did not raise significant objections to it (so much for its obvious absurdity).  If Mr Krugman hasn’t seen it cited it is the same way that Pauline Kael didn’t know anyone who voted for Nixon.  But the Heritage Report is not the only one.  The American Council on Capital Formation found job losses of 1.8 to 2.4 million in 2030.  The research of the left-leaning Brookings Institution has found that “Achieving reductions in greenhouse gas emissions is a costly endeavor.”  Once one strips away the discounting tricks, even the government studies demonstrate the truth of this statement.

Instead, the campaign against saving the planet rests mainly on lies.

Thus, last week Glenn Beck - who seems to be challenging Rush Limbaugh for the role of de facto leader of the G.O.P. - informed his audience of a “buried” Obama administration study showing that Waxman-Markey would actually cost the average family $1,787 per year. Needless to say, no such study exists.

Once again, Mr. Krugman is being economical with the truth.  He is correct only in so far as the recently revealed documents simply summarize the real effects of the other studies that have been disguised using economic trickery.  Here is what the Treasury documents say will be the effect of the President’s policies:

Given the administration’s proposal to auction all emission allowances …a cap-and-trade program could generate federal receipts on the order of $100 to $200 billion annually. … Economic costs will likely be on the order of 1% of GDP, making them equal in scale to all existing environmental regulation. …One advantage of auctioning allowances is the potential for generating large revenues (perhaps $300 billion annually). … Domestic policies to address climate change and the related issues of energy security and affordability will involve significant costs and potential revenues, possibly up to several percentage points of annual GDP (i.e., equal in size to the corporate income tax).

These documents are available for viewing here.  The fact that the Treasury initially redacted the most embarrassing sentences suggests strongly that they wanted to hide this.  That sounds like burying the truth to me.

But we shouldn’t be too hard on Mr. Beck. Similar - and similarly false - claims about the cost of Waxman-Markey have been circulated by many supposed experts.

The claims are the claims of the US Treasury Department, available now for all to see.  We show, while Mr. Krugman tells.

A year ago I would have been shocked by this behavior. But as we’ve already seen in the health care debate, the polarization of our political discourse has forced self-proclaimed “centrists” to choose sides - and many of them have apparently decided that partisan opposition to President Obama trumps any concerns about intellectual honesty.

So here’s the bottom line: The claim that climate legislation will kill the economy deserves the same disdain as the claim that global warming is a hoax. The truth about the economics of climate change is that it’s relatively easy being green.

Mr. Krugman is hoist by his own petard.

CEI Weekly
September 25, 2009


>>CEI Makes Waves in Climate Change Debate
Last week CEI made available documents obtained from the Treasury Department that contained the Administration’s predictions on the costs of cap and trade. This week coverage of the costs continue, as recorded in ABC News and The Washington Times. Additionally, CEI’s Chris Horner has responded to rebuttals attempting to downplay the significance of the documents.

As climate change has become the focus of the United Nations, CEI’s Iain Murray has taken on the science presented at the UN. Also, CEI’s Myron Ebell has stated that climate change is a fantasy in numerous news sources such as in The New York Times, Foxnews.com, and The Pittsburgh Tribune Review.


>>[VIDEO] CEI’s Lee Doren on Glenn Beck
CEI’s Lee Doren was invited onto the Glenn Beck show to talk about his video response, “The Story of Stuff,” to a video being shown in elemantary schools across the country. See all of Lee’s responses on on his YouTube channel, How the World Works.


>>Shaping the Debate
Cap-and-Trade Will Depress Home Prices
Ryan Young’s op-ed in Politico

Car-Free Crusade is Absurd
Sam Kazman’s quotation in the Detroit News

Swift Response to Net Neutrality Proposals
Ryan Radia’s quotation in the San Francisco Chronicle


>>Best of the Blogs
“No Way” to San Jose
by Angela Logomasini
In recent years, the San Jose City Hall has led the way in stupid environmental environmental policies. Several years ago, they were among one of the first cities (along with San Francisco and Salt Lake City) to ban bottled water in government agencies based on questionable environmental claims. Now they are banning stores from giving away shopping bags of any kind. Plastic bags will be banned altogether and stores providing paper bags must charge a fee only provide bags made with 40 percent recycled material.

Gypsy Cabs Coming Soon to DC?
by Ivan Osorio
If you’ve ever been to Brooklyn, you’ve almost certainly seen firsthand the shortage of taxis that has been created by New York City’s licensing restrictions, known as the “medallion” system. Under this system, only a limited number of licensed cabs are allowed to run in the city. . . Taxicab medallion restrictions result in artificially high entry costs for new drivers and less lower quality service for passengers. Yet, two District of Columbia city council members, Jim Graham and Muriel Bowser, are trying to impose a similar system in the nation’s capital.

Rent-Seeking Utilities: You Reap What You Sow
by Marlo Lewis
Yesterday, in State of Connecticut et al. v. American Electric Power et al., the 2nd U.S. Court of Appeals decided that states and other plaintiffs have the right to sue five electric utilities – American Electric Power, Cinergy, Southern Co., Excel Energy, and the Tennessey Valley Authority – for creating a ”public nuisance” by emitting CO2 and, thus, contributing to global warming. . . These utilities for years have lobbied for carbon cap-and-trade schemes. Instead of opposing climate alarmism, they have helped promote it.


>>Liberty Week Podcast
Episode 61: How About FCC Neutrality?
We start with the FCC’s just-announced proposal for “net neutrality,” Treasury documents that reveal the true cost of cap-and-trade legislation and the plan for getting over California’s great depression. We then move on to the G20 Summit’s potential path to prosperity and the ever-expanding scandal that is ACORN.


>>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.

The Wall Street Journal criticizes Obama for seeking to force Honduras to accept the return of its ex-president and would-be dictator, Manuel Zelaya, a demand backed by left-wing Latin American dictators. “Mr. Zelaya was deposed and deported this summer after he agitated street protests to support a rewrite of the Honduran constitution so he could serve a second term. The constitution strictly prohibits a change in the term-limits provision. On multiple occasions he was warned to desist, and on June 28 the Supreme Court ordered his arrest. Every major Honduran institution supported the move, even members in Congress of his own political party, the Catholic Church and the country’s human rights ombudsman. To avoid violence the Honduran military escorted Mr. Zelaya out of the country. In other words, his removal from office was legal and constitutional, though his ejection from the country gave the false appearance of an old-fashioned Latin American coup. The U.S. has since come down solidly on the side of—Mr. Zelaya.”

The Weekly Standard criticizes Obama for blocking travel to the U.S. by Hondurans, even while inviting to the White House, and giving a visa to, an official of Burma’s genocidal government, which has used mass rape and massacres against ethnic minority groups, and used torture and murder against Buddhist monks protesting oppression. The Obama Administration earlier imposed travel sanctions on the people of Honduras to punish them for their Supreme Court’s ruling refusing to allow the return of Honduras’s ex-president dictator to office.  Michael Barone, the dean of American political commentators, chides Obama for undemocratically “opposing the elected Congress, courts and civil society of Honduras.”

The Washington Times calls it “the worst foreign policy ever.” It notes that Obama has bullied “Honduras, which is desperately trying to stave off a socialist takeover by an anti-American autocrat whom the State Department has concluded is worthy of full U.S. support. This has delighted Cuban dictators Raul and Fidel Castro and Venezuelan strongman Hugo Chavez, who are very willing to let the United States carry their water. Venezuela, meanwhile, has signed a major arms deal with Russia, continues to build the anti-Gringo “Bolivarian” bloc, bullies U.S. ally Colombia and plans to launch its own nuclear program.” (Obama’s actions have also emboldened Nicaragua’s corrupt, bullying President Daniel Ortega to behave dictatorially).

The Washington Times reports that “President Obama’s diversity czar at the Federal Communications Commission” has praised Venezuelan dictator Hugo Chavez and his crackdown on independent media, in remarks in which he “described Hugo Chavez’s rise to power in Venezuela as ‘an incredible revolution.’” (Chavez recently closed 240 radio stations in Venezuela, and his regime has shot unarmed demonstrators).  Other Obama appointees have Marxist roots or sympathies.   Obama’s green jobs czar was the race-baiter Van Jones, “a self-avowed communist” who remained in office for months, desite controversy, until revelations that he was a Truther who believed that George Bush may have been behind the 9/11 attacks. Obama’s nominee to be Assistant Secretary of State, Arturo Valenzuela, has a reputation as a loud defender of Venezuelan dictator Chavez’s terrible record on freedom of the press.

The Times also criticizes Obama’s congressional allies for moving to unionize airline security screeners and authorize collective bargaining at the TSA, making it more difficult for lazy or careless employees to be fired for incompetence.  The unions have “urged TSA Acting Administrator Gale D. Rossides to suspend use of the agency’s skills test for screeners. Failure rates this year reached more than 50 percent and were as high as 80 percent at some airports. The skills test shows that large numbers of airport screeners are failing at jobs that are intrinsic to keeping our airports and commercial airplanes secure, and the union’s response is to get rid of the test. The government employees union is also pushing to have failed screeners’ records cleared because pay and bonuses are tied to performance and unsatisfactory employee records prevent those who were fired for poor performance from being reinstated. So much for worker accountability.”

Obama also wants to introduce union-backed collective bargaining at the TSA. (A study found that the TSA is more than twice as likely to fail to detect a bomb as the private security firms it replaced. And TSA’s failure rate is three or four times as high as the few remaining private firms still allowed to handle airline security.)

The Obama administration is also undermining the security of railroad passengers by gutting an expert, highly-rated, anti-terror agency at Amtrak, which Amtrak’s unions hate, despite its efficiency, because it is not unionized.  Political cronyism is also playing a role in the gutting of Amtrak’s Office of Security Strategy and Special Operations (OSSSO).  Ultimately, OSSSO’s “highly-specialized officers” will likely be replaced by unionized employees with ”alarmingly low pass rates” in “basic” classes.

Earlier, the Obama administration ripped off taxpayers and retirees in the General Motors and Chrysler bailouts, in order to enrich the left-wing United Auto Workers union, in unnecessary bailouts that have cost at least $70 billion, drawing criticism even from the liberal Washington Post.  Many commentators argued that the auto bailouts were illegal, such as the Heritage Foundation and Clinton administration Labor Secretary Robert Reich.

In the Washington Post, George Will criticizes Obama for caving in to demands by left-wing unions for protectionist policies like tire tariffs that will harm consumers without saving jobs.   The stimulus package passed earlier this year contained protectionist provisions that backfired, destroying thousands of U.S. jobs by triggering massive retaliation against our export industry while doing little to reduce imports.

The Obama administration has now ordered a private provider of Medicare Advantage services to remain silent about how the Obama health-care plan would destroy the Medicare Advantage programs relied on by millions of seniors.  Eugene Volokh, a leading expert on First Amendment law, says that this violates the First Amendment.

Obama’s congressional allies have decided to conceal the exact language of their health-care bill until after it is voted on in committee, preventing the public from learning about controversial provisions buried in it.  (Earlier versions of ObamaCare have contained lots of provisions that do nothing to enhance health care, like racial preferences that were criticized as unconstitutional by the U.S. Commission on Civil Rights).

Obama’s Energy Secretary likens the American people to unruly “teenage kids” who don’t know what’s good for them, and need to be told what to do.  (The cap-and-trade bill he backs to fight global warming would be devastating for the economy and do nothing to protect the environment).

Obama’s health care plan would raise taxes, break promises, harm people with insurance, explode the budget deficit, destroy many inexpensive health-care plans, and take away important freedoms.