Making 2011 the Year of Economic Growth

by WILLIAM R. HAWKINS December 30, 2010
The liberal media has been heralding all the grand achievements of the 111th Congress, especially the legislation pushed through during the lame duck session. The Congress which took its last vote on Dec. 22 added $3.2 trillion to the national debt, setting a record for red ink that exceeded the $2.0 trillion in deficits run up during the 110th Congress.  Since the Democrats took control of both houses after the 2006 election, the national debt has grown by $5.2 trillion, or by 30 percent. The deficits are mainly the result of the 2008 recession, which reduced revenue and spurred the use of stimulus spending to speed recovery. Yet, with unemployment at 9.8 percent, it would seem that the fiscal programs were poorly devised and accomplished little for the huge sums spent.
The best anti-recession policy was something Congress did not do. It did not enact the so-called "cap and trade" initiative to limit greenhouse gas (GHG) emissions by raising costs for energy production and use. Had such legislation been implemented, there would have been no chance for an economic recovery. The new burdens envisioned for the core activities of America's modern, affluent society would have made the lapse of the Bush tax cuts pale in comparison. The misnamed American Clean Energy and Security Act of 2009 (H.R. 2454) just barely passed in the House or Representatives by a vote of 219 to 212. Only eight Republicans voted in favor and 44 Democrats opposed it. The bill then stalled in the Senate in the face of a bipartisan coalition worried about the recession. GOP gains in the 112th Congress should render its re-introduction futile.
Yet, sending the United States not just into another Great Depression, but turning the clock back several generations in living standards is the aim of the Left-wing Green movement. Groups like Climate Justice Action want to “ensure that large-scale, destructive corporate-controlled false solutions to climate change are eliminated. This includes so-called ‘clean coal,’ agrofuels (industrial scale biofuels), nuclear power, and large-scale hydropower.” And “we should not build electric cars or trucks running on biofuels but massively reduce their numbers through the radical development of public transportation." To them, there is no way forward, only backwards.
Economic stagnation or decline is vital to the sustainability of socialism. Marxists have always assumed they would be taking over a capitalist system that had already solved the economic problem of producing all that society needed. Their mission was simply to run the system more "fairly" by eliminating "profits" and "the wealthy" who had more than their proper share. There was no understanding that the modern age was only dawning when the core doctrines of the Left were being formulated in the 19th century. Without a capitalist system with its financial incentives for material advancement, economic progress comes to an end. For many on the Left, this is an acceptable outcome, but it cannot be sold to the general public which expects living standards to continually rise. The fear that their children may not be better off than they are is driving middle class angst.
The solution for the Left is to convince the public that economic progress is bad. Several attempts have been made to sell this idea since it was spawned by the New Left in the 1960s. The early "tree hugger" approach extolling the "simple life" never got beyond the hippie communes, where its application was quickly found to be appalling. Then came the "limits to growth" argument that there aren't enough "resources" to maintain middle class standards as populations increase. Capitalism and technology, however, keep finding new ways to do things, using resources more efficiently and finding new resources. The Greens have had to devote time to denying access to resources to starve progress (such as restrictions on oil drilling and mining, and even to building wind mills and dams) so they could artificially create shortages.
Finally, unable to persuade people to go backward, the Greens invoked their own version of the "voice of god" to command regression on pain of universal death.  Hence, the birth of the "global warming" notion. Progress is not good, for it will kill us all. That socialism cannot create progress ceases to be a failing; it becomes the movement's central platform plank. Material advancement will be "capped" and what benefits are available will be "traded" under socialist administration to assure "fairness" and a minimum standard for all---but not more than a minimum or the planet's future will be in peril. Nature requires socialism, end of the debate.
This argument has reached further than the hippie communes, but not much further. The vast majority of the world's people and their governments have not bought it, as evidenced by the continued failure of the UN climate conferences to find any general support for imposing restrictions on national economies (as opposed to the purely political battle by some groups of states to impose limits on rival states). The "right to develop" which has been at the core of human nature since before recorded history continues to be the rallying cry of those who live in the real world. The embrace of retrogression is a sickness unique to the cloistered halls of Western liberalism.
Unfortunately, the death of "cap and trade" legislation does not mean the battle is over.  The race in domestic policy will continue between those who are pushing expanded energy production from nuclear, wind, solar, natural gas and domestic oil against those who are trying to close down energy sources like coal, oil (from anywhere) and nuclear. Securing funding for one side while denying it to the other will decide the contest.
On Dec. 23, the Environmental Protection Agency issued its plan for establishing GHG standards in 2011. Its press release said, "The agency looked at a number of sectors and is moving forward on GHG standards for fossil fuel power plants and petroleum refineries—two of the largest industrial sources, representing nearly 40 percent of the GHG pollution in the United States. EPA will propose standards for power plants in July 2011 and for refineries in December 2011 and will issue final standards in May 2012 and November 2012, respectively." The EPA claimed it would hold "listening sessions with the business community, states and other stakeholders in early 2011, well before the rulemaking process begins."
Among the "other stakeholders" are all Americans who want to keep their country moving forward, which cannot happen if energy costs are driven upward by EPA fiat. As one Greenwebsite put it, "the ultimate regulations, which will apply to factories, oil refineries, and power plants, including many of the oldest, dirtiest coal plants, is a huge deal." Concerned citizens and their representatives in the new Congress must make sure the "deal" works in the national interest, which is assuredly won't if the Green Luddites stack the deck.  
Meanwhile, California's Air Resources Board approved its own state-wide cap-and-trade system on Dec. 16. After 2015, refiners and distributors of gasoline, diesel, natural gas and other fuels will be required to buy emissions permits at auctions or purchase them from other companies. Gradually, the state will reduce the number of permits available, squeezing companies that do not reduce their GHG emissions. Again, the cost of producing or using energy will go up. The California authorities seem bent on blasting holes in a ship that has already run aground to make sure it can never be refloated to sail again as the vanguard of American affluence.   
California's impending bankruptcy is rooted in the same liberal doctrines that triggered the national rebuke of the 111th Congress. Too much spending on non-productive programs while the foundations of the economy are being undermined; making any spending for any purpose (even on the basic duties of government) impossible to sustain.  Society requires growth, end of the debate. Contributing Editor William R. Hawkins is a consultant specializing in international economic and national security issues. He is a former economics professor and Republican Congressional staff member.

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