Jeffrey Sachs, the harbinger of bad policy, has written his first post-election column in the Financial Times, “Obama has four years to transform America’s Economy” (FT, Nov 12, page 11, subscription required). No surprises here; his advice is to speed up the destruction of our residual free market economy. He concedes that macro-Keynesianism has proven “outdated and outmoded,” but nevertheless calls for moves to a micromanaged economy.
Here he departs from his predecessor John Kenneth Galbraith, who recognized the inability of centralized planners to micromanage a dispersed entrepreneurial economy, and thus favored the consolidation of business into mega-firms that could (perhaps) be directed politically. Sachs retains part of that tradition (“the US needs massive overhauls of its key economic sectors”), but recognizes that a focus on “aggregate demand” policies is inadequate. The president, he argues, must become “the conductor of deep-seated structural changes.”
If President Obama follows his advice, we may expect a much more interventionist government. The role of capitalism is to plant our always scarce seed corn in the most fertile, most economically productive, sectors. The role of politics is to place it where it will yield the greatest short-term political gains, such as more funds to clean energy (and, of course, a carbon tax).
Don’t expect any moves to liberalize the entrepreneurial creativity that means America will soon outproduce Saudi Arabia in oil production, that has greatly weakened the blackmail potential of Gazprom and of Arab governments — and, of course, nothing that would have encouraged the low-cost energy realities that the private sector has made possible.
In brief, whatever the election might have achieved, rest assured that Jeffrey Sachs is still Jeffrey Sachs.
Have a listen here.
Director of CEI’s Center for Energy and Environment Myron Ebell discusses his recent PBS Frontline appearance, and how the debate over global warming has shifted in the last few years. The issue has all but fallen off the radar as economic difficulties have supplanted environmental concerns in the public mind.
Is the Chevy Volt really new technology? General Motors justifies its profit losses on the automobile by claiming it’s a long-term investment in a brand new technology. But CEI’s Chris Horner says that while Volt’s 21st century styling may be new, the idea of a car that runs on electricity dates to the mid-19th century. Horner argues that’s just one more reason to abandon this heavily discounted, government-subsidized car.
As he told Chris Woodward of OneNewsNow:
“This is akin to subsidizing horses to create a market for the brand-new technology, the buggywhip. I suggest that electric car promoters, windmill touts and others hyping 19th-century failures as newly invented miracles opt for decidedly more careful language to avoid embarrassment, or even to fend off legal challenge.”
Watch for Horner’s new book, The Liberal War on Transparency, due out in early October.
Have a listen here.
The EPA has been stonewalling a Freedom of Information Act (FOIA) request from the Competitive Enterprise Institute since 2010. Since the EPA has no intention to comply with the law, CEI has sued the EPA in a case that could set a major precedent in government transparency. Energy Policy Analyst William Yeatman explains how agency officials have been using private email accounts to conduct official business, arguing that non-governmental email accounts are exempt from outside scrutiny. CEI argues that basic transparency demands that public information be made public.
The left-leaning, self-proclaimed “fact checker” PolitiFact ignored the most basic economic law, the law of supply and demand, in claiming that cap-and-trade legislation, which is designed to limit energy consumption and increase the price of energy from non-renewable sources, could actually result in “an average lower cost for consumers.” Even the supporters of such legislation, such as President Obama, have admitted that such legislation increases energy costs to consumers. In a January 17, 2008, interview with the San Francisco Chronicle, Obama said that “electricity rates would necessarily skyrocket” under his cap-and-trade plan to fight global warming. Similarly, a CBS analyst pointed out that a Treasury Department analysis estimated the cost of the Obama administration’s cap-and-trade plan at $1,761 per year for the average American household.
The steady stream of outright falsehoods coming from PolitiFact, and its blatant double standards and hypocrisy, are chronicled at a blog called PolitiFact Bias. Additional commentary on the bias of the head of PolitiFact in Virginia can be found here. A rebuttal to false claims made in defense of PolitiFact Virginia can be found here.
In a similar vein, Investor’s Business Daily and other publications have chronicled how widely-cited self-proclaimed fact checkers like the Washington Post’s Glenn Kessler have gotten “their own facts wrong” when writing about things like plant closings and foreign policy.
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Have a listen here.
Severe drought in the Midwest has driven corn prices to record levels. Policy Analyst Brian McGraw argues that ending the federal government’s ethanol mandate could help families who are struggling to pay their heightened grocery bills. Under the mandate, nearly 40 percent of this year’s corn crop will be used for fuel instead of food.
Have a listen here.
The Washington, D.C., area was recently hit by a rare derecho storm, which is essentially a land hurricane. Three million people were left without power, some for more than a week — during a record-breaking heatwave. Pepco, the electric utility that serves D.C. and parts of Maryland, quickly drew the public’s ire. Energy Policy Analyst William Yeatman thinks the jeering public should look in the mirror. A government-granted monopoly and rampant NIMBY-ism are not a recipe for success.
I wish all OpenMarket readers a Happy Fourth of July. Things are finally returning to normal here in most of the Washington, D.C., region, where many people have endured days of broiling heat without electricity or air conditioning, due to a violent storm that killed 22 people, and knocked out power to 3 million.
Initially, the huge storm hit the Virginia suburbs harder than the Maryland suburbs or Washington, D.C. But the vast majority of people who lost power in Virginia have now had it restored (by Dominion Virginia Power). But in Maryland, many of those who lost power still don’t have power and are suffering through enormous heat. As Gregg Easterbrook, who is not a conservative, notes in The Atlantic, liberal “Maryland Gov. Martin O’Malley . . . can’t even deal with a dismal power utility in his home state. . . . Montgomery County, Maryland, is one of the nation’s bluest and wealthiest counties; its perennially awful power service raises the question of whether liberals can make the trains run on time.” Right after the storm, most of the people without power in the region were in Virginia. Now, most of the people without power seem to be in Maryland.
Why? Maybe politics. There is a bigger political incentive to get the power back on in Virginia, versus a bigger incentive to make political donations to entrenched incumbents and political machines in Maryland. Virginia has a competitive, two-party political system. Maryland is effectively a one-party state. (Maryland recently raised taxes to pay for ever-increasing state spending.)
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It looks like it could begin a trade war — in airplanes. China has announced that it may impound European Union airplanes in retaliation if the EU seizes their planes because China won’t comply with the EU’s draconian carbon emissions data and trading system.
The EU has imposed a carbon tax on emissions including those from foreign airplanes that land or take off from the EU. What’s really astonishing is that the charges would be made on all emissions from the whole trip, that is, is a plane took off from Beijing and landed in Frankfurt, Germany, the airline would pay the tax for the emissions during the 4,863-mile journey.
According to the EU’s mandate, countries had until March 31 of this year to submit data on their carbon emissions. But Chinese airlines said they are not going to collect and hand over the data.
The news report quoted a Chinese official of their air transport association:
“Chinese airlines are unanimous on this. We won’t provide the data,” said Wei Zhenzhong, secretary general of the China Air Transport Association, on the sidelines of an International Air Transport Association (IATA) meeting in Beijing.
Wei said China “would try to avoid any trade war”, but is prepared to retaliate if its state carriers –?Air China, China Southern Airlines and China Eastern Airlines – are penalised.
CEI has covered this story here, here and here, and has noted that with airlines’ faltering in this stagnating economy, adding more taxes could bring some closer to the brink.
Have a listen here.
A new EPA regulation, the Utility MACT, is intended to cut mercury pollution from coal-fired power plants. According to the EPA’s own estimates, the rule is one of the most expensive in history. Are the costs worth it? Policy Analyst David Bier, co-author of a forthcoming CEI study, thinks the answer is no.
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