Obamanomics: Ideology over Common Sense?

Member Group : Reflections

"So if somebody wants to build a coal-powered plant, they can," Barack Obama said during a January 2008 interview with the San Francisco Chronicle. "It’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted."

And it’ll bankrupt the rest of us? Has Obama bought the idea that politically correct windmills and solar panels can replace dirty old coal in meeting our growing energy needs?

There’s plenty to question about Obama’s economic agenda. And a lot for Obama to learn, given his zero experience in business, near-zero executive experience, and his paltry record of20legislative accomplishments during his hurried jaunts through the Illinois Senate and the United States Senate.

As Hillary Clinton stated during the primaries: "I have a lifetime of experience that I will bring to the White House. I know Senator McCain has a lifetime of experience that he will bring to the White House. And Senator Obama has a speech that he gave in 2002."
And it wasn’t even a good speech. Clinton was referring to the short anti-war speech that Obama delivered in Chicago on October 2, 2002, six months before the U.S. invasion of Iraq, at a rally organized by Chicagoans Against the War in Iraq.

Delivering the standard leftist litany, Obama criticized Mobil, Exxon and "the arms merchants in our own country" and declared that the battles we need to fight are "the battles against ignorance and intolerance, corruption and greed, poverty and despair."

Obama also told the crowd that we have to "fight to wean ourselves off Middle East oil." He didn’t explain how increasing taxes on Exxon would help in the weaning process, or how putting more restrictions on domestic oil drilling would make us less dependent on Middle East oil.

Today, six and a half years after the Chicago speech, Obama’s budget proposal includes a tax increase on energy, a carbon tax, by way of a cap-and-trade system that’s designed to reduce carbon dioxide emissions in order to do battle with global warming, even though global temperatures have been cooling for the last 10 years.
"No business will be allowed to emit any greenhouses gases for free," explains Obama. "Businesses don’t own the sky."

Obama is projecting that $646 billion over 10 years under the cap-and-trade scheme will be transferred from the business sector to federal coffers. The end result of this huge extraction of capital from the private sector and the corresponding expansion of government will somehow be an America that’s less reliant on, according to Obama, "oil that’s controlled by foreign dictators."

The Obama budget also calls for a multi-billion dollar excise tax to be imposed on oil and gas companies operating in the Gulf of Mexico, in addition to an increase in user fees for oil and gas companies operating on federal lands.

Similarly, these higher costs on oil and gas companies are somehow supposed to decrease our dependence on foreign oil.

And for the nation’s already-troubled consumers, Treasury Secretary Timothy Geithner acknowledges that the cap-and-trade system will produce higher energy bills.

As Obama explained in th e San Francisco Chronicle interview: "Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket, even regardless of what I say about whether coal is good or bad, because I’m capping greenhouse gases, coal power plants, you know, natural gas, you name it, whatever the plants were, whatever the industry was, they would have to retrofit their operations. That costs money. They will pass that money on to consumers. You can already see what the arguments are going to be during the general election. People will say Obama and Al Gore, these folks, they’re going to destroy the economy, this is going to cost us $8 trillion, or whatever the number is."

And what about the campaign promise of "a tax cut for 95 percent of Americans." More than eaten up by this one Obama proposal in the form of higher energy prices.

Obama explained that under his plan "every unit of carbon or greenhouses emitted would be charged to the polluter." And regarding "whatever technologies are out there" in the market, "whatever power plants that are being b uilt, that they would have to meet the rigors of that market and the ratcheted down caps that are being imposed every year."

Every year, in short, it will get harder to meet the centrally planned objectives, the tougher "ratcheted down" caps, that are intended to reverse the alleged warming of a planet that’s already been cooling for a decade.

And if a company can’t jump through the hoops? Like with coal, bankruptcy via the central plan? Less jobs, delivered by an administration that’s promising to "save or create" four million new jobs?

Anyone getting the idea that this guy doesn’t know what he’s doing, that we’re all going to be sitting in the dark before it’s over?

Ralph R. Reiland is an associate professor of economics at Robert Morris University in Pittsburgh.
Ralph R. Reiland
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E-mail: rrr [email protected]