American Elephants

Is Green Regulation the Fabled Perpetural Motion Machine? by The Elephant's Child

California is an interesting case of a state slowly committing suicide. Businesses and citizens are leaving California in droves, there is a tsunami of red ink, and the California Assembly just passed a bill that will require state utilities to get a third of their energy from “renewable” sources by 2020.  It is one of the most aggressive standards anywhere.

The usual suspects are delighted.  The NRDC  says in just nine years renewable energy generation in California will be roughly equal to total current U.S. renewable generation, and supply enough “clean energy” to power nearly 9 million homes, or according to the Union of Concerned Scientists, to drive 3 million cars.  A spectacular case of wishful thinking.

Can you think of any case when an agency set up to regulate to control a problem, has quietly disbanded when the problem disappears?  Me neither.

The California Air resources Board (CARB) was founded in the wake of terrible smog in Los Angeles.  Anyone who lived there in the smoggiest years has unpleasant memories.  On the very rare days when wind blew the smog out of the basin, you were always astounded to see the mountains in the distance.  I had the distinct misfortune to live there at the time.  CARB found that the regulations they made for California had national repercussions, since California was such a large market.  Car companies and other manufacturers hastened to adjust their products to fit CARB’s requirements.  Power corrupts, and absolute power corrupts a whole bunch.

In California, as on the national scene, the urge  to regulate is focused on ever finer particulates, and the case for regulation becomes more ephemeral.  There are always consequences,  One of the  unintended consequences is driving Dwayne Whitney’s trucking company out of business.  But it also appears that the regulations were imposed because of a study by Dr. Hien Tran that linked the emission of particulates from diesel exhaust to 2000 “premature deaths” in California each year.

Another researcher who found no connection between diesel emissions and ” premature deaths” decided to check on Dr.Tran’s credentials, and found that his PhD had come from a diploma mill, purchased for $1,000.  That researcher, UCLA’s Dr. James Enstrom, blew the whistle on Tran and insisted that CARB needed to consider his work before passing the new regulation.  After 35 years at UCLA the university suddenly fired Enstrom. Two powerful CARB commissioners are also professors at UCLA.

“The environmental regulation machine is powerful in California,” says Adam Kissel of The Foundation for Individual Rights in Education (FIRE), which is defending Enstrom in the fight to keep his job.  “When Dr. Enstrom went up against that machine, he was retaliated against. If Dr. Enstrom loses his job because he exercised his academic freedom, then it’s a message to other researchers that you’d better not rock the boat because you might be next.”

There are always consequences. Some of them are unintended, some are just the usual result of the unthinking grasp for power.

Obama Claims 216,000 New Jobs: Only 7 Million More to Go! by The Elephant's Child

The Labor Department reported 216,000 net  new jobs for March, and the unemployment rate ticked down slightly to 8.8%.  Government employment dropped by 14,000 which suggests that states and cities are repairing their budgets. This is progress in the right direction, but a very weak jobs recovery. There were roughly 100,000 fewer discouraged workers which means that as more Americans see their neighbors finding work, they will look harder themselves.

Wages are flat, the average wage of $22.97 didn’t budge in March, but that is usual in the early stages of a recovery when there are many idle workers.

The problem is that consumer prices are rising: 0.4% in January, 0.5% in February, and March will probably see a further increase. Gas prices continue to creep up to more than $4 in some places. This doesn’t count in the inflation statistics, though it hits family budgets hard.

President Obama and Fed Chairman Ben Bernanke have made a bet on inflation to revive the economy. The Fed has kept interest rates near zero, but the official inflation numbers  do not include consumer prices or gas prices.  The Fed says food and energy prices don’t matter because they are not part of “core” inflation, but that doesn’t help the family budget.

Investors says that  it is really government that causes inflation:

  • The Fed has created $2 trillion in new money—an unprecedented shot of liquidity pumped directly into the economy.
  • The government has added $5.5 trillion in new debt, nearly a 60% rise in just 3 years.
  • The EPA has moved to regulate all stationary producers of carbon dioxide, putting enormous costs on business causing them to put off investments.
  • The increase in regulation and red tape at all levels of government has added to business uncertainty and reduced hiring.
  • The record 29% jump in federal spending in President Obama’s first three years has crowded out private spending and business investment.
  • Spending on “Stimulus” and TARP which could total nearly $2 trillion.

So when you are horrified by the rise in prices at the grocery store, for clothes, or at the rise in prices at the gas pump, don’t blame the gas station, the grocery or the retailer, it is Big Government that is at fault. Liberals only know how to create government jobs. The private sector kind remain a mystery.  If Obama could just stop destroying private sector jobs with his big government regulation, it would help.

The Obama administration is dead set on repeating all the same errors from the stagflation of the 1970s.  That’s what the liberal rule book says to do, and they are certainly not going to imitate Reagan.

ADDENDUM: I should add that the 7 million figure refers to those who are actively looking for work.  Add in discouraged workers, and it’s closer to 15 million.

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