June 2009

A recent report by New York University school of Law’s Institute for Policy Integrity suggests as much. See my commentary on Masterresource.Org.

As if using the EPA to browbeat and frighten corporate America and its investors isn’t enough, environmentalist thugs now want other government regulators to get into the act, even though they have no authority to do so:

The groups that released the studies called on the U.S. Securities and Exchange Commission to respond to investor requests for guidance on climate-related disclosures for companies to put in securities filings. The SEC did not immediately respond (why should they?) to questions about the studies.

“As the nation responds to the challenges of global warming, investors have a right to know which businesses are forging innovative solutions for the 21st century and which are lagging behind,” Environmental Defense Fund President Fred Krupp said in a release.

The U.S. Environmental Protection Agency tracks emissions of carbon dioxide from industry, but investors say they want to know more about corporate strategies to reduce pollution from other planet-warming gasses as well as carbon dioxide.

“I want to tell you what’s going to happen from this point forward in my opinion. First of all, the House will pass anything. Nancy Pelosi has the votes to pass anything. Don’t be distressed when you see the House passes some kind of cap-and-trade bill. And you know it could be worse [than the proposed bill] and she could still pass it, so it’ll pass there….

“The EPA has threatened to regulate this through the Clean Air Act. That isn’t going to work in my opinion because we can stall that until we get a new president – that shouldn’t be a problem….

“While the House will pass the bill … in the Senate, they’re not going to be able to pass it. You guys – it’s just not going to happen. Now we have a history of what’s happened in the Senate. We had the 1997 Kyoto Protocol. Remember that’s where we passed by a 94-1, I think it was, saying we don’t want to ratify any treaty – the Senate doesn’t – that doesn’t include developing nations with developed nations. Well, that stuck with us.”

The federal government is spending more than $50 billion to bail out General Motors, with no end in sight. But the UAW union refused to sacrifice its privileged position to save the company, demanding excessive wages and benefits that are much higher than most Americans get. The Obama Administration caved in to its demands, saddling GM with high labor costs that may doom the company in the long run.

As the Washington Post notes today, the “concessions” that Obama obtained from the UAW were merely cosmetic: “Union concessions were ‘painful’ only by the peculiar standards of Big Three labor relations: At a time when some American workers are facing stiff pay cuts, UAW workers gave up their customary paid holiday on Easter Monday and their right to overtime pay after less than 40 hours per week. They still get health benefits that are far better than those received by many American families upon whose tax money GM jobs now depend. Ditto for UAW hourly wages . . . . Cumbersome UAW work rules have only been tweaked.” Earlier, the Post lamented the “preferential treatment of the autoworkers’ union at the expense” of other company stakeholders and creditors, noting that “the union can boast that it has been promised no loss in ‘base hourly pay, no reduction in . . . health care, and no reduction in pensions,’” even though excessive union wages and benefits helped sink the company. Small wonder that even the liberal Post, which backed Obama’s bailout of GM in March, now has soured on it.

If GM had rejected a federal bailout, and filed for bankruptcy in December, it would be recovering right now, since it could have used bankruptcy proceedings to tear up the collective bargaining agreements with the United Auto Workers that saddle it with excessive wages and benefits and rigid work rules, and it would also be benefiting from the fall in gas prices from $4 last year to $2.50 now. By avoiding a federal takeover, it would also have greater freedom to oppose costly regulations proposed by the Obama Administration, such as CAFE and global warming regulations, which will destroy tens of thousands of autoworker jobs).

The bailout is neither necessary nor likely to be successful in the long run. In its auto bailout in the 1970s, England did the same things that Obama is doing now, like propping up high union wages and promoting the production of little “green” cars consumers may not want. Its bailout failed miserably, destroying the British auto industry’s chance of survival.

Even more wasteful than the GM bailout is Obama’s wasteful $800 billion stimulus package, which has destroyed tens of thousands of jobs.

Even as it engages in costly, unauthorized auto bailouts that have no legal basis, the Administration is abdicating core federal responsibilities like enforcing the voting-rights laws. Political appointees in the Obama Justice Department recently blocked action against a racist, anti-semitic hate group (whose members included an Obama poll-watcher and city democratic official) that used nightsticks and racial epithets to drive white voters away from a polling place in Philadelphia last year. The Obama Justice Department has also rubberstamped unconstitutional legislation, failed to protect the voting rights of American servicemen, and been deafeningly silent about a liberal black political boss in Mississippi who prevented voters from casting ballots and engaged in vote fraud.

The federal government is giving another $30 billion in taxpayer money to General Motors to allow it to operate without having to cut excessive union wages. The Obama Administration is “gambling” on its ability to turn around the company under government control.

The Obama Administration has said it will now interfere not just with the “selection of the company’s board of directors,” but also in “fundamental corporate decisions,” and “major corporate events and transactions.” For example, Obama recently pressured GM to keep its headquarters in crime-ridden, economically-collapsing Detroit.

The $30 billion is excessive even if the Administration’s wildest hopes come true. Even if federal money were the only way to keep GM afloat (which it isn’t — GM could be made competitive simply by cutting its excessively high employee wages to lower levels that still exceed average American wages), and even if the bailout saved not only GM jobs but also the jobs of “related suppliers and dealers,” “the price of the U.S. government bailout comes to about $125,000 per employee, including those working for related suppliers and dealers,” according to the Washington Post.

If GM had rejected a federal bailout and takeover, and simply filed for bankruptcy in December, it would be recovering on its own right now, since it could have used bankruptcy proceedings to tear up the collective bargaining agreements with the United Auto Workers that saddle it with excessive wage and benefits and rigid work rules, and it would also be benefiting from the recent collapse of oil prices. It was record-high gas prices that forced consumers to buy smaller cars last year, battering GM’s finances, which were based around selling big cars. But gas prices have fallen from over $4 a gallon last year to $2.50 now. So the bailout is saving no jobs, it’s just allowing GM to keep union wages high at taxpayer expense, while keeping it from becoming competitive in the long run. (The recent drop in gas prices will also mask the effects of incompetent management of GM by the Obama Administration. On the other hand, the Administration’s CAFE and global warming regulations, which GM opposed before it was taken over by the Administration, will destroy tens of thousands of autoworker jobs).

The bailout is neither necessary nor likely to be successful in the long run. In its failed auto bailout in the 1970s, Britain did the same things that Obama is doing, like propping up high union wages and promoting the production of little “green” cars consumers may not want. Its bailout failed miserably, destroying the British auto industry’s chance of survival.

“‘Countries . . . protect ailing auto companies on the theory that they need to protect jobs,’ said Maryann N. Keller, an independent auto analyst. ‘But it’s not clear that protecting companies leads to the revival of those companies.’ As for the jobs, Keller said ‘a lot of that is bunk’ because Americans would buy the same number of cars no matter who the maker is. ‘Somebody would still make the parts,’ she said. ‘They would just be made for a different customer.’”

Why is the Obama Administration doing something so wasteful? Politics. The UAW is one of the biggest sources of money and manpower for the Democratic Party and Obama, and the UAW is now calling the shots. (The UAW spent millions electing Obama).

While taxpayers have spent tens of billions of dollars bailing out the Detroit automakers, the UAW has made little in the way of sacrifices, refusing to accept cuts in pay that could keep the automakers able to compete with lower-cost competitors. As even the liberal Washington Post lamented, “the union can boast that it has been promised no loss in ‘base hourly pay, no reduction in . . . health care, and no reduction in pensions,’” even though excessive union wages and benefits helped sink the company. Meanwhile, the government has ripped off pension funds and bondholders who loaned the car companies money.

The bailouts aren’t the only outrageous waste of taxpayer money taking place right now. Even bigger is the wasteful $800 billion stimulus package, which is harming the economy, both by triggering foolish trade wars that have backfired and cost at least 40,000 jobs, and by driving up interest rates for businesses that need to borrow money to expand or create jobs. (The government is keeping down interest rates on its own debt by printing vast sums of money to buy its own bonds, in order to finance the exploding national debt, which will result in massively higher taxes).

In conjunction with today’s Third International Conference on Climate Change in Washington, the Heartland Institute (my organization and conference host) is releasing “Climate Change Reconsidered: A Report of the Nongovernmental International Panel on Climate Change.” The 880-page book (posted entirely online at the Web site) challenges the scientific basis for concerns that global warming is man-made or is a cause for concern.

The report rebuts the several manifestations of findings by the United Nations Intergovernmental (I would say Pro-Governmental or Governmentalovin’) Panel on Climate Change, which serves as the foundation for several policies favored by President Obama and Congressional Democrats to limit greenhouse gas emissions. From the NIPCC site:

The scholarship in this book demonstrates overwhelming scientific support for the position that the warming of the twentieth century was moderate and not unprecedented, that its impact on human health and wildlife was positive, and that carbon dioxide probably is not the driving factor behind climate change.

The authors cite thousands of peer-reviewed research papers and books that were ignored by the IPCC, plus additional scientific research that became available after the IPCC’s self-imposed deadline of May 2006.

The Nongovernmental International Panel on Climate Change (NIPCC) is an international panel of nongovernment scientists and scholars who have come together to understand the causes and consequences of climate change. Because it is not a government agency, and because its members are not predisposed to believe climate change is caused by human greenhouse gas emissions, NIPCC is able to offer an independent “second opinion” of the evidence reviewed by the Intergovernmental Panel on Climate Change (IPCC).

The report addresses several scientific areas, including global climate models, temperature record observations, solar variability, climate cycles, species extinction, glaciers, sea level, and more. In announcing the release of the book, Heartland President Joseph Bast said:

“I think it is fair to say that this is the largest independent compilation of research on climate change ever published, and I think it marks a real turning point in the national and international debates on climate….

“Whereas the IPCC pretends it has absolute confidence in its findings, and puts forward projections that might be predictions, but maybe they’re not predictions, this book doesn’t do that. It’s much more intellectually modest and I think honest.”

I, for one, am glad to finally see a major resource in this area that is not paid for and owned by government. Let them do things they are good at like running postal delivery, banks, and automobile companies.