The American Spectator

The Public Policy

Obama's Assault on the Middle Class

By Peter Ferrara from the May 2009 issue

(Page 2 of 2)

Also, You Lose Your Job

IN ADDITION TO HIGHER PRICES for traditional energy and the lower standard of living are the negative effects on the general economy. The higher costs on the economy due to cap and trade result in fewer jobs and slower economic growth. Higher costs for energy in the U.S. will, in particular, drive even more manufacturing overseas. Lower GDP means the loss of products and consumption beyond those involving CO2.

A thorough study on the effects of cap and trade conducted by a leading economics firm, Science Applications International Corporation (SAIC), concluded that cap and trade would result in job losses of between 1.2 million and 1.8 million by 2020, and 3 to 4 million by 2030. This is roughly the amount of jobs Obama claims will be produced by his economic stimulus package. Slower growth results in a loss of GDP for the American people of nearly $700 billion per year by 2030, which translates into lost household income of $4,000 to $6,750 per year by then.

It Could Be Worse

THE INCREASED COSTS, decreased consumption, and negative overall economic effects resulting from cap and trade will be more severe to the extent that now-hoped-for alternative energy sources, which are built into the cost estimates, do not develop. During the campaign, Obama said repeatedly that he was not opposed to nuclear energy, which involves no CO2 emissions, as long as the nuclear waste issue could be addressed. But already, the Obama administration has shut down the Yucca Mountain nuclear waste disposal facility, which was the way the federal government was addressing the nuclear waste issue. Nuclear power in any event is not acceptable under the liberal/left environmentalist catechism, so don’t expect any further nuclear development while Obama or congressional Democrats are in power.

Biofuels require removing vast stretches of arable land from food production to make a dent in traditional energy use. Scandalously, this is already sharply raising world food prices, resulting in hunger and even starvation in poor countries, along with food riots. Yet recent scientific studies suggest that growing and using biofuels actually produces more greenhouse gases than burning fossil fuels, increasing global warming. Removing even greater empires of land from food production for biofuels is not a promising alternative for future energy production. There is much talk of “clean coal technology” that will enable America to use its vast coal reserves without contributing to supposed global warming. But as recent environmentalist ads have claimed quite rightly, such technology does not yet exist. More likely, as Obama suggested in a little-noted San Francisco Chronicle interview during the campaign, his cap and trade policy will just drive the coal industry out of business.

Sun and wind currently account for less than 1 per cent of our energy. They also require vast amounts of land, and because wind and sunlight come and go, they can’t maintain the constant flow energy grids require. There seems to be no prospect that they could become the dominant energy source for our economy.

Finally, let’s pretend that any of these alternative energy sources could become technologically feasible. To the extent they are more costly, including subsidies, than traditional energy sources such as oil, coal, and natural gas, they will only further add to the problem, leaving the American economy suffering permanently with the crippling disadvantage of relying on high-cost energy.

In other words, Obama’s cap and trade plan commits us as a nation to phasing out over the next 40 years the energy sources that have powered the Industrial Revolution, with no alternative technology in sight at this time that can seriously take up the slack. Under Obama’s policies, therefore, we are headed to an economy powered by the same energy sources as in George Washington’s day.

Worst of all, this sacrifice and suffering is not going to accomplish anything, even if human-caused global warming were real (which it is not). China, India, and Japan have all indicated that they are not going to commit national suicide for this false god. Russia only stands to benefit, and no one in Africa or Latin America has the interest or the means to do anything serious either. Even Europe, which talks a good game, granted so many exemptions to its cap and trade plan over the past decade that it too has accomplished nothing. Trashing only the American economy will produce no meaningful results, even according to the environmental extremists themselves, unless that was the goal all along.  

Letter to the Editor