Inside the Beltway

CEI’s Myron Ebell
Obama Scores Zero on Econ 101

In his first address to Congress on Tuesday night, President Obama said that the “stimulus” legislation and other short-term economic policies were necessary to prevent a decade-long recession. He then went on to advocate energy and global warming policies that will foster a perpetual recession. First, he promised that federal funding and mandates will make the United States the world leader in renewable energy technologies. As an article that might have been published in the Onion but actually appeared in the Los Angeles Times last week noted, the only thing holding renewable energy technologies back is a number of necessary technological breakthroughs that will make them work. Apparently, our President is too young to have learned that the federal government has been throwing taxpayer money at renewables since the 1970s.

The President then called on the Congress to send him cap-and-trade legislation that would make renewable energy profitable by raising the price of conventional energy produced from burning coal, oil, and natural gas. Yes, renewable energy will become profitable, many jobs will be created, and we’ll have to settle for a significantly lower standard of living as a result. On Wednesday, the Administration sent their budget proposals to Congress for FY 2010. Included were revenue projections from auctioning rationing coupons under a cap-and-trade scheme to reduce greenhouse gas emissions. The Office of Management and Budget assumes that $78.7 billion will be raised in 2012 and a total of $645.7 billion by 2019. My colleague Iain Murray has some comments here. My comment is that it’s a sad fact that the new Administration has some highly-regarded establishment Democratic economists in it, but is for some reason pursuing economically illiterate and consequently disastrous policies.
Stars Come Out for House and Senate Hearings

Last week I reported that the Senate Environment and Public Works Committee would hold a hearing featuring the Chairman of the UN Intergovernmental Panel on Climate Change, Dr. Rajendra K. Pachauri. I didn’t know at the time that the House was planning a hearing this week as well with a prominent witness. As it turned out, the House and the Senate held competing A-list hearings on global warming on Wednesday at 10AM. Testifying before the House Ways and Means Committee was Dr. James E. Hansen, whom the committee described as an Adjunct Professor at Columbia University’s Earth Institute. He is of course also Director of NASA’s Goddard Institute for Space Studies. I tried to watch both hearings on the internet and thereby undoubtedly missed a lot of good stuff as I switched back and forth. Interestingly, Pachauri, an economist and engineer, talked mostly about global warming science, while Hansen, an astronomer, talked mostly about economics. Pachauri was utterly dreary. Hansen was an interesting mix. He inveighed against cap-and-trade as an ineffective scam designed to pay off big business. He instead endorsed a stiff carbon tax with 100% of revenues rebated to consumers.

When asked by Rep. Earl Pomeroy (D-ND) about what would happen to North Dakota and its near-total reliance on lignite (brown coal) for producing electricity, Hansen said that employment in the lignite industry would go down, but that North Dakota had lots of potential for wind power and potentially for growing well-designed bio-fuels. He observed that these new industries might create more jobs than would be lost in the coal industry. That is true. One of the ways to create jobs is to make production and use of capital less efficient. For example, there would be tens of millions, probably even hundreds of millions, of new jobs in North Dakota and throughout rural America if mechanized agriculture were banned.

The Republican witnesses-Professor William Happer at the Senate hearing and Professor John Christy at the House hearing-were articulate, intelligent, and scientifically accurate. Christy made a strong case against energy poverty. Naturally, most Senators and Representatives were unimpressed and unhappy with them.

Around the States
Kansas

The Kansas House of Representatives passed a bill today that allows Sunflower Electric Power Company to build two coal-fired power plants. Governor Kathleen Sibelius will veto the bill after it passes the Senate, but House Speaker Mike O’Neal believes he will be able to get the five more votes necessary for an override. Forrest Knox, the Republican who led the House debate, explained, “This is about doing business in Kansas…. The bottom line is our energy needs will not be met without conventional energy production.”

Across the World
Australia

Bushfires in the Victoria region of Australia have now killed over 200 people and have released over 550 million tons of carbon dioxide. In 2003, Australia reported that bushfires had released 190 million tons of CO2-equivalent, roughly a third of the nation’s total greenhouse gas emissions for the year. And yet, it was green policies that kept many Australians from being able to clear the brush amd trees around their homes that posed a fire risk.

From http://www.globalwarming.org/