Cap and Trade: Another Nail in the Economy’s Coffin

In his latest column, Ron Paul attacks the cap and trade bill (HR 2454) as an unnecessary and wasteful effort to apply a big government solution to the disputed problem of “global warming”, while at the same time causing additional harm to the economy. As similar policies in Spain have shown over the past decade, such efforts lead to capital flight and job losses and made the country less competitive in the global economy.

Cap and Trade Will Lead to Capital Flight

by Ron Paul

In my last column, I joked that with public spending out of control and the piling on of the international bailout bill, economic collapse seems to be the goal of Congress. It is getting harder to joke about such a thing however, as the non-partisan General Accounting Office (GAO) has estimated that the administration’s health care plan would actually cost over a trillion dollars. This reality check may have given us a temporary reprieve on this particular disastrous policy, however an equally disastrous energy policy reared its ugly head on Capitol Hill last week.

The Cap and Trade Bill HR 2454 was voted on last Friday. Proponents claim this bill will help the environment, but what it really does is put another nail in the economy’s coffin. The idea is to establish a national level of carbon dioxide emissions, and sell pollution permits to industry as the Catholic Church used to sell indulgences to sinners. HR 2454 also gives federal bureaucrats new power to regulate a wide variety of household appliances, such as light bulbs and refrigerators, and further distorts the market by providing more of your tax money to auto companies.

The administration has pointed to Spain as a shining example of this type of progressive energy policy. Spain has been massively diverting capital from the private sector into politically favored environmental projects for the better part of a decade, and many in Washington apparently like what they see. However, under no circumstances should anyone serious about economic recovery emulate an economy that is now approaching 20 percent unemployment, where every green job created, eliminated 2.2 real jobs and cost around $800,000 each!

The real inconvenient truth is that the cost of government regulations, taxes, fees, red tape and bureaucracy is a considerable expense that has to be considered when companies decide where to do business and how many people they can afford to hire. Increasing governmental burden directly causes capital flight and job losses, as Spain has learned. In this global economy it is easy enough for businesses to relocate to countries that are more politically friendly to economic growth. If our government continues to kick the economy while it is down, it will be a long time before it gets back up. In fact, jobs are much more likely to go overseas, compounding our problems.

And for what? Contrary to claims repeated over and over, there is no consensus in the scientific community that global warming is getting worse or that it is manmade. In fact over 30,000 scientists signed a petition recently directly disputing the claims on which this policy is based. Legitimate environmental claims should instead be directed towards the public sector. The government, especially the military, is the most serious polluter in the country, and is exempt from most EPA regulations. Meanwhile Washington bureaucrats have classified the very air we exhale as a pollutant and have gone unchallenged in this incredible assertion. The logical consequence is that there will come a time when we will have to buy a government permit just to emit carbon dioxide into the atmosphere from our own lungs!

The events on Capitol Hill last week just demonstrate Washington’s audacity in manufacturing problems just so they can expand government power to solve them.


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  • Christine

    The Energy Non-Crisis by Lindsey Williams

    Lindsey Williams tell the real TRUTH about Alaskan oil and gas

  • Christine

    Gulf Oil ‘SPILL’ – What A Lie

    “Will it still be a spill when millions of people in Louisiana, Texas, Mississippi, Alabama, Georgia, and Florida are losing consciousness from the stench in the air, that will not dissipate?

    Will people have to convulse and hemorrhage from their internal organs and lungs before the corporate media will show at least a modicum of truthfulness?

    First, the stench will be overwhelming and it won’t go away. The air itself will kill because crude oil is composed of polynuclear aromatic hydrocarbons, hyrogensulfide, benzene, toluene, xylenes, ethlbenzene, and trimethylbenzene.

    According to the Federal Register and OSHA these are all extremely hazardous substances.

    Exposure can cause the following health effects: eye and skin irritation, narcoses, and/or chemical pneumonitis.

    High concentrations of hydrogen sulfide can cause headaches, dizziness, unconsciousness and/or death.

    More worrisome yet is hurricane season is coming. And a Gulf hurricane that hits any part of our Gulf Coast, this summer, could produce unheard of destruction, sickness, and death. ”

    …and will the cost of energy, transportation gas, cost of goods transported rise? Most assuredly part of the plan + cap and trade tax. Now who caused the pollution? We the people or government and corporations? Who should pay and be taxed? We the people or corporations? CORPORATIONS! …so the govt and corporations will stop creating poverty as well. And there is no man-made global warming causing pollution and poverty. Here’s a perfect example of who should pay the money they are trying to steal from “we the people” instead of the corporations. Cap n Trade = govt and corp BS. Just another bailout for corporations. They need to pay for their own mistakes. Maybe next time they won’t willingly make them!!

    For the love of money, power, control over others lives…and destroying the ecosystems of the earth in the process. How greed blinds.

  • Christine
  • henrylow

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  • VR

    Soros is sponsoring climbing expeditions?

  • Sean

    G8 activists hang 65 foot poster of Obama’s head on Mount Rushmore saying “Americans honor leaders, not politicians. Stop global warming.”

  • Christine

    Looking at our own economic problem through Britain’s attempts to improve their economy. Sound familiar?

    Recession and the taxpayer´s burden

  • longshotlouie

    “The federal picture is so bleak because the Obama administration is the most fiscally irresponsible in the history of the U.S. I would imagine that he would be the intergalactic champion as well, if we could gather the data on deficits on other worlds. Obama has taken George W. Bush’s inattention to deficits and elevated it to an art form.

    The Obama administration has no shame, and is willing to abandon reason altogether to achieve its short-term political goals. Ronald Reagan ran up big deficits in part because he believed that his tax cuts would produce economic growth, and ultimately pay for themselves. He may well have been excessively optimistic about the merits of tax cuts, but at least he had a story.

    Obama has no story. Nobody believes that his unprecedented expansion of the welfare state will lead to enough economic growth. Nobody believes that it will pay for itself. Everyone understands that higher spending today begets higher spending tomorrow. That means that his economic strategy simply doesn’t add up.”

  • Christine

    Britain echos our same economic problems and problem with its leader(s)

    I love this guy Daniel Hannan! I wish all of our congress and senate would talk like this, this straight, forceful and this pointed, to President Obama!

  • Christine
    Just 2 weeks left to sign up and read the book for free online.
    ..and speaking of the economy…here’s a quote from the book…

    “6. Unemployment rising. Every business in the world, big or small, is trying to reduce overhead. One of the quickest and easiest ways to do this is to reduce payroll liability by laying off employees.

    As of March 2009 the official unemployment rate is 8.5 percent. during the month, approximately 694,000 jobs were lost in the United States, according to the Bureau of Labor Statistics. However, that unemployment statistic does not count the unemployed people who haven’t looked for a job in thirty days, or those working part-time jobs while waiting for work. When you add those people into the official number,the real unemployment rate is 19.1 percent, according to During the Great Depression, unemployment reached 24 percent. At this rate, we will be there soon.”

  • longshotlouie
  • Christine

    This president seems to be bent on doing things that do not work well. Smooth talker though.

  • longshotlouie

    H.R. 2454 is a 1400-page promise to audit every aspect of your home and life under the guise of creating jobs, clean energy and a sustainable world.

    • Power Grab

      The bill states every home owner will receive an energy audit. What is a home energy audit? It is an intrusive visit made by the bureaucrats at the Home Energy Team or a similar group. They will examine and report the way you live your life directly to RESNET (Residential Energy Services Network) . Light fixtures, socket types, spas, hot tubs, windows, appliances, walls and roofs will all be under review. Energy tests will be conducted throughout your house. At the end of the visit you will receive a report and a rating. The report will focus on the changes you need to make and the rating is called a HERS rating (Home Energy Rating System). RESNET will perform the audits through authorized contractors. RESNET has adopted the Mortgage Industry National Home Energy Rating Standards. The standards set the national procedures for home energy ratings.

      • Bills are designed to be unclear and open to much interpertation, this is why they have such contempt for the constitution, so that they can bend or make new rules where they see fit.

        I can think of so many way the government can push the market with this sort of power, very scary!

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  • A few attempts at this have happened in Canada luckily they have been shot down. I am afraid the pressure will mount now that its happening with our greatest trading partner.

  • Jonathan (Spring, Tx)

    Green power generation is so far, an expensive proposition. But so was the car, the computer, the television and so on.

    If we want more green power, we need to incentivize green power generation, not penalize what we already have. Wind turbines, solar, any power generated through renewables should drive a transparent tax break in proportion to economic and environmental benefits. Smaller companies should be able to prosper, and the large power gen companies should not be able to drive them out, or be themselves disincented from producing green power.

    If carbon emissions are truly a pressing environmental problem, then fossil fuels should simply be taxed, as they are in Europe. This will lead to increased costs for power, increased consumer costs, more expensive gas, smaller cars but less environmental damage. The trade-offs should be clear, and the people allowed to vote on policies.

    What should NOT be done, is the enacting of a stupid and complex sheaf of laws that will benefit no one but Washington and Chicago cronies who will trade ‘carbon credits’ in a rising market, whilst regular Americans are bankrupted by exponentially increasing heat and A/C bills.

  • Stephen

    I am not sure if cap and trade is the right way to go, but global warming is REAL. If you don’t believe me, see the movies “The 11th Hour” and “An Inconvenient Truth”, and go to blogs by people like Earth Policy Institute,, Conservation International, Union of Concerned Scientists, Post Carbon Institute, Energy Bulletin,, etc. Both the public and the private sector need to work on reducing carbon emissions, both in this country and abroad. To solve this will require massive changes in the way in which we use energy, and reduce the amount of carbon emissions we are putting into the atmosphere.

    Also, there is a another energy issue that is even more important that you should care about, Ron Paul. That is “Peak Oil”. We may have peaked in world oil production back in 2005! If you don’t beleive me, read the blogs by people like James Howard Kunstler, The Oil Drum, Richard Heinberg, Life After The Oil Crash, Matthew Simmons, Colin Campbell, and others.

    • longshotlouie

      Are you pulling our collective leg?

    • Al Gore’s movie “An Inconvenient Truth” is as bogus as it gets!
      The experts are now saying the earth is cooling down until 2030!
      Stop believing the hype from these kind of people. We need
      (as a country) to wake up to this kind of BS.

      • Sean

        The experts? What about that report that was just written by 13 different government agencies? If we keep at the rate we are going, Texas is going to become a desert with 100 days over 100 degrees every year. It is a fact that precipitation is moving from the west to the east.. You must be one of those people who ignore droughts and hurricanes.

        • Results

          I luvz me some fear-mongering.

    • Results

      All the kings men could not change the weather cycle, permanently.

      • Sean

        The chinese know how to make it rain…

        • Results

          me too

          • Sean

            I’ve never seen a king ignore a problem that threatens all of his men’s life. They at least try.. They fight to the death, they don’t coward out because they think the job is too big.

      • Results

        Especially a manufactured problem

  • @transcript writer

    You need to delete “to solve them.” at the end. Ron Paul didn’t say that. The reason is that the government never solves problems.

  • VR

    You Cannot Multiply Wealth By Dividing It