The decision by Congress to go with a “cap and trade” system over a more straightforward carbon tax, attempts to delude the American people into thinking that this is a “market-based approach.” When really it is an aristocratic-based approach.
Cap and trade would allow the industries that produce pollution to have a government-granted cartel over their respective industries. Just like other infamous cartels, including OPEC on oil and the AMA on doctors, this is bad news for the American people since it all drastically increases the cost of energy. This means that new companies that want to enter the market will have to buy credits that have already been auctioned off.
Each of these cartels creates high barriers to entry for new competitors. For example, “if somebody wants to build a coal-powered plant, they can; it’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted,” as Obama stated on the campaign trail.
Even though it will be hard for a new company to set up shop in the energy industry, after this, the profits from this exclusive cartel will be given to Congress and not to the companies to reinvest into possible innovative efficiencies. This will only add more money to the congressional budget that will undoubtedly be handed out to special interests, undoubtedly in the form of ever-burgeoning “entitlements.”
For the average American, that means higher prices on energy, higher unemployment due to increased costs upon these companies, and even reduced economic output for the whole country causing a decrease in the average American’s income. [source]
Obama even admits, at the 40 second mark, that electricity rates will skyrocket, yet he still advocates this bill which will concentrate more wealth in the hands of a select few while hurting the business climate overall.
Posted in Economy, National, Nutshell Series, Obamamania | 3 Comments »