On Tuesday, President Obama delivered a speech where he took aim at greenhouse gases and ordered U.S. automakers to make more fuel-efficient cars that will supposedly cut emissions and increase mileage. These standards, Obama proclaims, will reduce our foreign dependence on foreign oil. Not to be outdone, Congressmen Henry Waxman (D-Calif.) and Edward Markey (D-Mass.) are proposing a new “cap-and-trade” bill, the American Clean Energy and Security Act (ACES).
The bill, all 1,000 pages of it, looks to reduce U.S. greenhouse gas emissions by 20 percent by 2020, 42 percent by 2030, and 83 percent by 2050. Obama proposes to impose a minimum 35 miles-per-gallon on all new cars by 2016.
It is making its way through the House, and the liberal Center for American Progress is already voicing its approval, claiming that the “bill will create jobs by spurring investment in renewables and efficiency.”
I’m not so optimistic.
Meeting Obama’s standard will add $1,300 to the price of every new car by 2016, and that doesn’t even count for the inevitable price inflation that will result from Obama’s $1 trillion printing-press stimulus binge.
Producing low-carbon electricity, as ACES suggests we do, also costs more money. A lot more money. But don’t worry, our government is going to subsidize these higher costs, which will have the illusion of being “cheap” since they will be paid with money that is taken out of our paychecks before they are even handed to us.
Even Obama’s closest cronies admit that these proposals will be incredibly expensive, wasteful, and will make Americans much poorer (that really could be said for any and every government program). Peter Orzag, Obama’s Director of the Office of Management and Budget, admits that a 15 percent reduction in green-house gas emissions will reduce American incomes, hurting the poor and middle-class specifically; just imagine what an 83 percent decrease would do. Christina Romer, the head of Obama’s Council of Economic Advisors, says that every 1 percent increase in taxes reduces economic output by 2 to 3 percent. The ACES is predicted to steal $80 billion a year from Americans every year, which is about a 4 percent tax increase. You do the math.
Of course, it’s not Obama or any Congressmen who will feel the sting of these taxes, since most of them have never held down a real job in their entire lives (and by real, I mean a private, market job that actually produces something of value and doesn’t rob people of their wealth).
American car companies are collapsing under the weight of the heavy load of government coercion, like protectionist tariffs that made them immune to competition (and allowed them to mass-produce bland tank cars), UAW parasites, and Obama’s Mussolini-esque takeover of GM. Unfortunately, the Japanese are also shooting themselves in the foot with the release of their new, green Insight. All that needs to be said about this car is in Jeremy Clarkson’s Times Online article:
“Much has been written about the Insight, Honda’s new low-priced hybrid. We’ve been told how much carbon dioxide it produces, how its dashboard encourages frugal driving by glowing green when you’re easy on the throttle and how it is the dawn of all things. The beginning of days.
So far, though, you have not been told what it’s like as a car; as a tool for moving you, your friends and your things from place to place.
So here goes. It’s terrible. Biblically terrible. Possibly the worst new car money can buy. It’s the first car I’ve ever considered crashing into a tree, on purpose, so I didn’t have to drive it any more.”
“Cap-and-trade” proponents need to stop pretending that it will cost little and give a boost to the economy; it won’t, it’ll have the exact opposite effect. Real economic growth is created by private capital in a free market, not by some arrogant central planner in the halls of Congress. There are already numerous private-sector attempts to build fuel-efficient cars, but most of them can’t get off the ground or are too expensive to make due to burdensome government regulations, taxes, fines, and penalties.
The government has tried again and again to subsidize, protect, dictate to, and bail out American car companies, and they continue to lose money and make awful cars. It’s time for the drunks, adulterers, and extortionists in Congress, and the empty suit in the White House, to stop destroying our auto industry.