The Leviathan is a transformational creature. It consumes good ideas and defecates ridiculous laws.
A generation ago, Milton Freidman proposed a system of tradable pollution credits that would allow noxious industries to compensate other firms, and ultimately, everyone else, for the messes they made. The proceeds generated by trade in the credits could be used to clean up pollution or to pay people for living with its effects. This was an intriguing idea for using market mechanics to address the externality of a clean environment. Policymakers gradually embraced the concept; but their embrace changed it into what we know today as “cap- and-trade” regulation.
In June, the House of Representatives narrowly passed H.R. 2998, a bad piece of cap-and-trade legislation that – rather than using market mechanics – would place various regulatory constraints on industrial activity in the United States. President Obama supported the bill, which passed the House by a vote of 219 to 212. Despite the narrow margin (or, as seen from a bureaucratic perspective, because of it), the bill’s passage was described as a political “win” for the wretched Nancy Pelosi. After the vote, she muttered: “We passed transformational legislation which takes us into the future.”
Like much of this madwoman’s political agenda, H.R. 2998 is unpopular with most Americans. Proof of this: some 44 Democrat congressmen voted against their transformational leaders. The bill’s main sponsors, California’s Henry Waxman and Massachusetts’ Edward Markey, are two of the most reflexive statists in Congress. They don’t deliberate on legislation; like pigs at the trough, they simply consume anything of value that comes before them.
Six months before, President-elect Obama had made catechistic pledges to create just such misguided law. The only challenge came in changing the old buzzword (“global warming” legislation) for a new one (“climate change” legislation). Seems the globe wasn’t cooperating with the hysterical agenda of Beltway fanatics. It wasn’t warming as drastically as their earlier flim-flam had threatened.
Still, passing this crap did involve some parliamentary drama. The original bill had come out of the House Energy and Commerce Committee, but a week before the House vote, that bill was replaced by H.R. 2998 – which would be voted on as an “amendment in the form of a substitute.” Then, just hours before the vote, Waxman’s House Rules Committee released a report that added a 300-page amendment to H.R. 2998’s existing 1,200 pages – another cynical “win” for a career pol. This meant that the peons in the House were voting on a 1,500-page bill they hadn’t read. Neither had their staffs. In this way, H.R. 2998 emerged from the same statist cesspool as the Patriot Act and last year’s main economic stimulus package.
What does the bill do? It mandates a 17% cut in “greenhouse gas emissions” by 2020 and an 80% cut by 2050, unlikely goals that are supposed to be made more likely by prices set on various forms of pollution by a “modified” cap-and-trade system. It also decrees that, by 2020, at least 20% of U.S. electricity will come from “renewable” sources and increased “energy efficiency.” No market mechanics to finesse that – just government edict. Over the coming decade, lobbyists and lawyers will keep busy determining what all the phrases in quotation marks mean.
Yet another triumph of politics. And a far cry from what Friedman had in mind.