The House just passed the Waxman-Markey cap-and-trade carbon emissions control act. If it passes the Senate, expect the president — the bill’s pusher-in-chief — to sign it at first opportunity.
I have not read the bill, so I should not comment on it at length. But then, neither has any congressman read the now 1000-pages-and-plus wonder. So they should not have passed it.
We are supposed to believe it is a good bill because we must trust the congressional assistants who wrote it. If anything is a testament to “the power of belief” it's the enthusiasm for a bill that has not been read, much less understood.
One thing is certain: The cap-and-trade program will increase the cost of energy in the United States. It is essentially a big, fat tax increase on businesses and consumers . . . in the face of which, businesses and consumers will decrease activity, depressing the economy.
The White House and congressional leaders say the bill will create new “green” jobs. But increasing the cost of doing business does not spur employment in general. It will likely increase pressure to build plants and factories outside the U.S., and even the specific jobs created by such mandates tend to come at the expense of other jobs.
The most astute commentary on the bill, so far, rests on a comparison between today's darkening days and the darker days of the Great Depression, when that day's Congress and president rushed through the Smoot-Hawley Tariff . . . thereby digging the depression deeper, marching America into a scary, institution-threatening poverty that only ended in the aftermath of World War II.
Back in 1930, general political wisdom had it that protectionism protected the whole economy. There was scant evidence for this. From Adam Smith on, the studied understanding of protectionism was that it helped some (generally richer) people at the expense of other (generally poorer) folks.
But protectionism did make a plausible surface sense, like the minimum wage does to so many, today. And remember, in those days of yore, economists had not yet been bought off by the lure of state power and the allure of political prestige, so, almost to a man, they opposed the bill.
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