Cap and Trade: The Stealth Tax

Candidate Obama famously promised a tax cut for 95% of the people. But President Obama is pushing a plan with the devious name of Cap and Trade which even he has acknowledged would mean increased energy costs.

Cap and Trade is a tax on carbon emissions. Everyone including The One knows that energy producers will have to pass this tax on to consumers in order to stay in business. On November 3, 2008, while campaigning in Iowa, he said, “Power plants are going to have to adjust how they generate power. They will pass those costs on to consumers…”

Not only does everyone use electricity, heat and/or air-conditioning, but the price of everything we buy includes an energy component for mining, farming, manufacturing and transportation.

Query: if a law raises taxes on energy producers that inevitably must be passed on to consumers, isn’t that the same as a tax on 100% of consumers? Democrat Rep. John Dingell said, “Cap and Trade is a tax and a big one.”

And for what? Over 700 scientists worldwide have now added their names to a document expressing skepticism about anthropogenic (man made) global warming. That is 13 times the number who signed on to the media-hyped IPCC 2007 “Summary for Policy Makers.”

UK Lord Christopher Monckton, former science advisor to Margaret Thatcher, was just advised, after his arrival in the US to testify at a Congressional hearing alongside the eminent climatologist Al Gore, that he would not be allowed to do so.

If the Chicken Littles are so sure of their science, why do they silence dissent? Why have they dropped the Global Warming lingo in favor of the new mantra, “climate change.” It might have something to do with an April 2008 report by the dependably pro-global warming BBC. It revealed that Michel Jarraud, Secretary-General of the World Meteorological Organization admitted, “…temperatures have not risen globally since 1998…”

Big-government proponents are always looking for new crises to scare us into surrendering more of our money and freedom to them. During the 20th century they had plenty: two world wars and a depression. Then came the Cold War and the fear of a nuclear conflagration. But after the fall of the USSR and the emergence of the US as the sole super-power, they needed something new. Hello global warming……er, climate change……oh, whatever.

Homeland Insanity

Yesterday we saw what happens when you put Homeland Security in the hands of the anti-war, blame-America-first crowd. This new government department was created in the aftermath of 9/11 to protect our Country from Islamic Terrorists.

Now the lefties who run DHS have turned their guns inward against the same group whose members they spit on when returning from Viet Nam. Yes, according to DHS our National security is threatened by US military veterans.

Some of these dangerous right-wingers even own guns. And don’t forget that Timothy McVeigh of Oklahoma City bombing fame was one of them.

Can’t you see a group of guys in Kabul all named Mohammad taking a wife-beating break to yuck it up and fire off a few AK-47 bursts over this bit of insanity?

I knew it was a bad omen when Obama put in charge of DHS former Arizona governor Janet Napolitano, who had absolutely no credentials for the job, but I never could have dreamed that the organization’s focus would quickly shift from protecting us from outside terrorists to targeting the very people who risk their lives to defend us.

Do you feel safer yet?

P.S.: Your comments, pro or con, are always welcome. Please feel free to forward Red, Right and Lou to your friends.

The Role of Incentives

The last posting started a little mini-series on Wealth Creation with a piece on Supply and Demand. Today we continue with The Role of Incentives. This is something we all know and is so basic that it requires little elaboration: you get more of what you reward and less of what you punish.

Therefore, the wealth of a society is heavily influenced by the incentives and disincentives that it adopts. If it rewards idleness and destructive behavior
(think unemployment and illegitimacy), it’ll get more. If it punishes work (excessive taxation), innovation and risk-taking (regulation and litigation), it’ll get less.

This rule is the short explanation of why socialism doesn’t work. Socialism rewards indolence and failure. It punishes work, innovation and risk-taking.

Maybe you’ve seen the story about the college professor who, on the first day of class, asks his students how many favor socialism. A majority of hands go up. So he announces that he will use a socialist grading system for that class. Instead of giving each student the grade she earns, he will average the grades and everyone will get the same grade.

On the first test, each student performed as usual, some A’s, lots of C’s, a couple of F’s (assuming anyone actually gets an F anymore). After averaging the grades, everybody got a B. Now the people who studied hard earning an A figured, what the hell, why should I work so hard if I’m going to get the same grade as everyone else. You can see where this goes: on successive tests the average grade keeps dropping until, on the final exam, everyone gets an F.

In a recent nationwide poll only 53% of respondents said that capitalism is a better system than socialism. If there is a bright side, it is that only 20% favored socialism. Twenty-seven percent didn’t even have an opinion. (These are the people we need to reach, if indeed they interested and capable of forming an opinion.)

If those polls results concern you (and they should), consider that, according to economist Gary Schilling, 52.6% of Americans now receive “significant income” from the government in the form of paychecks, Social Security and various welfare programs. Surprised? You ain’t seen nothin’ yet!

So, next time you read about a new government program or legislation, ask yourself, How will this affect people’s behavior and what effect will that have on wealth creation.