Cap & Trade: The Wrong Prescription for a Dirty Planet

Given the fact that many of our readers may not be knowledgeable on the cap and trade bill, I will provide a short explanation of it. Cap and trade is a policy enacted by government (red flag number one: government program) in which a restriction, or cap, is placed on the amount of a certain pollutant that can be emitted. Companies and other groups are given allowances, in the form of credits, which represent the amount of that pollutant that they are allowed to emit. If a company needs to produce more goods, and therefore release more emissions, that company must buy extra credits from another company, which constitutes the trade aspect of cap and trade. Energy companies are the largest producers of carbon emissions and can expect to need the largest amount of carbon allowances. In our case, the cap and trade bill was introduced into the House of Representatives by Congressmen Waxman and Markey.

As anyone with a fundamental understanding of economics knows, our companies provide jobs for Americans, which provide American workers with income, which they reinvest in the products produced by the companies that employ Americans. It is really a beautiful, self-sustaining circle, when it is left alone to function without government interference. However, a basic understanding of economic principles should also trigger red flags with any person who reads the President’s plan for cap and trade. Of course, the bill is so long that few have even had the opportunity to read it. Due to the current state of the economy, companies have already been forced to initiate pay cuts and lay-offs in order to survive. It is safe to say that if a new program which places restrictions on companies is enacted, it will further depress the economy. At this point, companies cannot take on the added expense of carbon credits without raising prices, or making significant production cuts and additional layoffs, both of which would cause even more problems for the economy. With each year the program is in place, emissions standards will become stricter and stricter, and companies will not be able to keep up with production demands and afford to purchase additional credits at the same time. While this sounds like an absurd program to enact while we are in the throes of an economic crisis, it is exactly what President Obama and most of his fellow Democrats want. As stated by Obama himself, the intention of the cap and trade program is to put a clamp on American companies and production, which will no doubt crush innovation, employment, and our private sector: “What I’ve said is that we would put a cap and trade system in place that is as aggressive, if not more aggressive, than anybody else’s out there. I was the first to call for a 100% auction on the cap and trade system, which means that every unit of carbon or greenhouse gases emitted would be charged to the polluter. That will create a market in which whatever technologies are out there that are being presented, whatever power plants that are being built, that they would have to meet the rigors of that market and the ratcheted down caps that are being placed, imposed every year.”

The cap and trade bill is being auctioned off as a quick cure-all for our environmental woes. In reality, it is a program that is positioned to seize wealth from the means of production and bring the economy to a screeching halt. The sole purpose of the bill is to restrict Americans’ usage of energy. Energy companies, the largest producers of carbon, will almost undoubtedly be in need of additional carbon credits. When they are unable to afford the credits, they will have to raise prices, which will affect the American consumer. In order to afford their energy bills, people will begin to cut back on their usage. This will deal another blow to the energy companies, which are already struggling. As one can see, this vicious cycle will continue until prices skyrocket out of control and/or the energy companies begin to fail. At which point, the government will either plan a bailout or just seize control of the companies entirely, all at the taxpayers’ expense.

As an interesting aside, it should be noted that Goldman Sachs, a key player in the mortgage meltdown that perpetuated our current economic crisis, has invested heavily in the carbon emissions trading company, Chicago Climate Exchange. The company was created in anticipation of the gold rush that was expected to occur as a result of the Kyoto protocol, which implemented a worldwide cap and trade system. However, President Bush backed out of the program, leaving the Chicago Climate Exchange high and dry. At this time, Chicago’s Joyce Foundation came onto the scene to save the floundering company. The foundation, whose board members included Barack Obama, gave millions to keep bail out the CCE (a practice our President has grown quite fond of). Since the company’s recovery and subsequent name change to Climate Exchange Ltd., Goldman Sachs has taken an 18% stake in it. Another interesting shareholder of Climate Exchange stock is Generation Investment Management. This is another company involved with energy trading that was curiously co-founded and owned by Senator Al Gore, one of the largest supporters of cap and trade legislation, and Hank Paulson, who is a former US Treasury Secretary, as well as the former CEO of Goldman Sachs. The web of connections surrounding cap and trade cannot be ignored. The Chicago Joyce Foundation, chaired by Obama, saved the Chicago Climate Exchange from bankruptcy. Goldman Sachs bought up an 18% stake in the company, and Al Gore and Hank Paulson’s company purchased a 10% share. During the 2008 elections, Goldman Sachs was Obama’s largest private campaign contributor, and also donated 73% of their earnings to get other Democrats elected. These enormous donations explain Goldman’s need for bailout funds, given to them by Obama, to the tune of $12 billion taxpayer dollars. Can this all really be a coincidence?

The cap and trade bill will transfer power from capitalist companies into the greedy hands of the federal government. During the program’s first year, it is expected to earn a total of $78.7 billion dollars. That is money that would otherwise be used to pay employees or to develop new technology, but instead, Obama claims that it will be put towards funding the massive socialist healthcare overhaul that is being planned. According to the Heritage Foundation’s estimates, energy prices for the average family of four can be expected to rise 17% yearly from 2020 to 2035, resulting in a 263% total increase. During the first days following the bill’s introduction into the House Energy Committee, Republicans proposed three separate amendments to provide a type of safety net for American consumers. They asked that the program be suspended if one (or all) of the following three things were to occur: Gas reaching $5 per gallon, electricity prices rising 10% above 2009 prices, unemployment rate climbing to 15%. Not surprisingly, the Democrats voted down each of these economic safeguards. Add this fact on top of the abundant amount of evidence already presented, and it becomes clear that the sole purpose of this bill is to send our economy into a depression the likes of which this country has never before seen. Make no mistake, our government can and will rip the free market economy we know and love directly out from under us, if we but give them the chance. The stage is already set for them to transform us into a socialist state, and steps have already been taken to do so. If we allow this measure to be passed, health care will soon follow. And one by one, we will watch our freedoms slip away until we are reading by candlelight and growing our own food for survival. America: wake up.