Last week, the Obama administration rolled out new tariffs on Chinese solar manufacturers. These new taxes will make solar energy more expensive, which will make environmentalists’ clean energy dream even more difficult to obtain. In other words, this action shows conclusively that this industry exists to benefit Obama Inc., not the American public.

Obama’s excuse for this move is that China subsidizes their solar industry and sells the panels here at a loss. Forget the absurd hypocrisy for a moment—what this argument really amounts to is an admission that the solar panel industry exists, not for the sake of the American consumer—that is, society in general—but for solar panel producers themselves. President Obama sees the industry collapsing all around him and has chosen to use government force to save it, another sly-bailout for the Bailout King.

China has decided to sell America solar panels at a loss. That’s true, but imagine if McDonald’s decided to do that. Should the government step in and subsidize Burger King, or should Americans just take advantage of the stupidity? You would think that Obama would be happy that another government is subsidizing his clean energy economy, but again, his tariff decision shows that he’s not actually interested in “clean energy” per se. He’s interested in the votes and campaign cash that the clean energy industry brings.

As Peter Schweizer, Hoover Institute Fellow and Throw Them All Out author, points out seventy-five percent of the Department of Energy green energy subsidies went to Obama bundlers or campaign members. Of the $20 billion in grants and loans, $16 billion went to “Obama-related companies,” notes Schweizer. “By that I mean either the chief executive or leading investor was a member of his campaign finance committee or was a bundler for his campaign.”

The Obama administration has lost a subsidy war and has started a trade war, all for the benefit of one politically favored industry. As China officials quickly pointed out, this tariff “will hurt both countries because China imports a large amount of raw materials and equipment from the U.S. to produce solar panels, and it exports such goods to the U.S.” But these industries aren’t as politically connected as the many wannabe Solyndras.

Crony-capitalism dressed in green rhetoric is still crony capitalism. It’s one reason that Congress should adopt a “Gift Clause,” which would ban all corporate subsidies. Only then would we have a true “level playing field” that Obama has advocated so many times.

The Environmental Protection Agency concedes that its recently finalized Mercury and Air Toxics Standards rule, also known as the Utility MACT, would cost $10 billion annually. Industry estimates are much, much higher. Even EPA’s (likely lowball) figure makes the MATS rule one of the most expensive direct regulations ever.

Despite these evident costs, EPA claims that the regulation will not only save the environment, but also benefit the economy. EPA Deputy Administrator Robert Perciasepe testified, for example, “Our analysis shows, particularly on these utility rules, that it will create jobs.” Head Administrator Lisa Jackson has repeated the same claim. “Every model that we run,” she said last year, “shows… that it would actually create jobs.”

But these claims are entirely disingenuous. EPA analysis does not show that the Utility MACT will result in net job creation, only that it will create jobs in the coal industry and those industries that produce pollution abatement equipment. The wider economic implications are ignored. As EPA’s Regulatory Impacts Assessment (RIA) states, “the Agency has not quantified the rule’s effects on all labor in other sectors not regulated by the [mercury standard].” In other words, “every model” Jackson ran cooked the books in favor of EPA’s conclusion.

In economics, such analysis is known as a “broken-window fallacy,” which views only a narrow range of effects of a particular action. “There is only one difference between a bad economist and a good one,” wrote 19th century economist Frederic Bastiat. “The bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.” EPA focuses on the “seen”—the workers required to install pollution controls—while it ignores the unseen—the workers who lose their jobs or are forced to take pay cuts due to higher electricity prices.

Nevertheless, EPA continues to promulgate this myth that the Utility MACT will benefit the economy. But consider what it means to benefit the economy. As Bastiat writes, economic development “diminishes the ratio of effort to result… that is, [it] lessens the effort needed to have a given quantity.” EPA regulations do the opposite. The agency’s RIA notes, “regulation leads to more labor being used to produce a given amount of output.” In other words, it increases the ratio of effort to result—it increases the effort needed to have a given quality. In sum, unnecessary regulations do not develop an economy—they impoverish it.

The goal of a utility is not to create jobs but to create wealth in the form of electricity. Even if more jobs are created in the coal industry from this regulation, this is bad for all coal workers because the profits from each megawatt of production are divided among around 50,000 more workers. (according to EPA’s RIA). This makes each worker’s labor less valuable and therefore, causes wages to decline. Under all economic models, environmental regulations harm workers.

EPA’s focus on industry-level employment ignores downstream costs to consumers from increased electricity costs. These adverse impacts will fall disproportionately on industries like manufacturing that rely heavily on electricity. Darren MacDonald, Director of Energy at Gerdau Long Steel North America, recently testified, for example, that “the steel sector is concerned about increased electricity costs and reliability issues that may result from [the Utility MACT]. This is for the simple fact that all of the compliance costs and reliability risks will ultimately be passed on to us, the consumers.”

Economic research supports this position. American University professor Michael Hazilla and RFF’s Raymond Kopp note “a point often made by economists but largely ignored by regulators:  regulations affecting production sectors that supply important intermediate products can have significant secondary impacts.” They write that “while pollution control investments were required in only 13 sectors, the cost of production increased, and output and labor productivity fell, in all production sectors.” Lower labor productivity means lower wages for workers, which again means that by ignoring downstream costs, the EPA is really ignoring the welfare of the majority of workers in the economy.

EPA wants Americans to believe something we all intuitively know is false: that higher costs create jobs, that higher electricity prices are economic stimulus, that with a wave of hand, a regulator can create tens of thousands of more jobs than an entrepreneur. In a way, these claims are true. The Utility MACT will stimulate the phony, government-created markets, and it will create jobs for engineers, but they will be making useless equipment for illusory benefits rather than in productive but unfavored industries like manufacturing, and if this type of regulation continues, it will certainly create more jobs than entrepreneurs who will abandon the U.S. for freer-markets abroad. If Congress wants to create productive jobs and build this economy, it must stop EPA.

Read my analysis of EPA’s argument that coal regulations create coal jobs here.

The most absurd aspect of the Environmental Protection Agency’s War on Coal is their repeated denials that it’s happening. No matter how many onerous rules they release, each time they claim that the regulation will not only save the environment, but also create jobs in the industry. For example, EPA’s Regulatory Impacts Assessment (RIA) for their mercury regulation known as the Utility MACT—which was (until possibly this week) the most draconian of the coal regulations—argues that the regulation will create almost 10,000 coal jobs.

Specifically, EPA’s Utility MACT regulation requires plants to install “maximum achievable control technology” (MACT)—otherwise known as scrubbers—to remove mercury and other toxins from exhaust. The rule is one of the most expensive in history: EPA estimates it will cost almost $11 billion annually to implement. Already, these compliance costs have led to the shutdown of dozens of coal-fired power plants. Yet, EPA supporters parrot EPA’s claim that this regulation will create thousands of jobs as if it had scientific authority.

EPA’s science is based on a Resources for the Future (RFF) study (Morgenstern, et al) of environmental expenditures in four industries in the 1980s—pulp and paper, plastics, petroleum, and steel—which found “a net gain of 1.55 jobs per $1 million in additional environmental spending” in those industries. EPA then took this formula and just multiplied times the estimated cost of the Utility MACT—$10.9 billion adjusted for inflation—to get their result. They show their work in this footnote on page 9-8 of the RIA:

Highly scientific! In other words, EPA took someone else’s paper, which studied environmental expenditures over three decades old (1971-1991), and applied them to a totally unrelated sector of the economy, the coal industry, and then utilized the old “plug and chug” method. This work wouldn’t survive peer review in a kindergarten class.

Nonetheless, the proposition that industry employment might increase as the result of environmental regulation isn’t totally asinine. The Morgenstern RFF study notes two reasons why environmental regulation might increase employment. First, “environmental regulation raises production costs. As production costs rise, more input, including labor, is used to produce the same amount of output.” Second, “environmental activities may be more labor intensive than conventional production.”

There’s some truth in this analysis. The Utility MACT would require coal plants to hire new workers to install scrubbers and would increase total production costs, one of which will be labor. RFF notes that “less competitive industries with inelastic demand may be less concerned about cost increases associated with regulation.” But coal isn’t a “less competitive industry with inelastic demand.” It, in fact, isn’t an industry at all, as Morgernstern defines it. It is a subsection of an industry, the electricity-generation industry.

Coal is in constant competition with an immediately presentable substitute good in natural gas, while industries like petroleum, for example, have no substitute. Further, Morgenstern writes that “most plants should not be worried about losing business to other plants facing the same regulation,” yet natural gas generators aren’t included under the Utility MACT rule, which gives them an advantage. One study by Exxon Mobile Corp. has found that natural gas will have replaced coal as the leading electricity generator by 2025 due in part to environmental regulation.

Given these facts, it’s hard to see how the Morgenstern study is applicable to the coal industry, and anecdotal evidence about plant closures throughout the U.S. is already supporting the conclusion that RFF’s model doesn’t fit the facts at least in this case. American University professor Michael Hazilla and RFF’s Raymond Kopp have found that in at least some industries, environmental regulation can have a dramatic influence on employment. “All industries experienced declines in labor productivity,” they conclude, “and some sectors experienced declines in employment. These impacts can also be substantial; for example, employment falls 7.6 percent in the motor vehicle sector.”

All this analysis, of course, obscures the more important issue of what the employment and economic impact will be on the rest of the economy, and this, of course, ignores the most important issue of all, which is whether the Utility MACT is necessary at all. As my colleague William Yeatman has pointed out many times in the past, all these economic impacts have been imposed by EPA in order to protect pregnant subsistence-level fisherwomen who consume more than 300 lbs of self-caught fish from the most polluted streams in the United States.

Not only will the children of these theoretical women be saved, says EPA, but they will have jobs at coal plants twenty years from now. Not likely, I’m afraid.

“This was the moment,” candidate Obama proclaimed after winning his party’s nomination, “when the rise of the oceans began to slow and our planet began to heal.” When he assumed office, President Obama attempted to act on that promise and regulate greenhouse gas emissions. On June 26, 2009, the House of Representatives passed the American Clean Energy and Security Act (Waxman-Markey Bill). In the words of The New York Times, “The vote was the first time either house of Congress had approved a bill meant to curb the heat-trapping gases scientists have linked to climate change.”

But in June 2010, Senate Majority Leader Harry Reid announced the Senate would not vote on the bill. “We know where we are,” Reid said, “We know that we don’t have the votes.” President Obama’s bid to become the first president to directly limit greenhouse gas emissions failed—he didn’t have the votes, he couldn’t change the law, right? Wrong. On December 7, 2009 (yeah, yeah, “the day that will live in infamy”), the Environmental Protection Agency announced its intention to regulate GHGs anyway, even without a law that “either house of Congress had approved meant to curb” GHGs.

On that day, EPA found that GHGs endanger human health and welfare, and therefore, could be regulated under the Clean Air Act (CAA) of 1972. Sadly for EPA, this regulatory action leads to clearly absurd results. According to the letter of the law, EPA would have to process over 6 million operating permits for stationary sources each year—400 times the current amount. This inconvenient truth didn’t, however, make EPA reconsider whether the CAA was ever intended to regulate GHGs. Rather, EPA decided to simply “tailor” the Act on their own—that is, amend Congressional legislation without Congress’s approval—to target only those environmental “criminals” it wanted.

Today, EPA released its first GHG regulation for coal-fired power plants. As Politico reports, “The standard will generally require that new power plants emit CO2 at a rate no greater than that of a natural-gas-fired power plant. Such plants emit about 60 percent less greenhouse gases than coal plants. The only coal plant to break ground during the Obama administration is a carbon capture and sequestration plant — Southern Co.’s Kemper County plant in Mississippi.” And that’s federally-subsidized.

The Washington Post adds, “The move could end the construction of conventional coal-fired facilities in the United States… ‘This standard effectively bans new coal plants,’ said Joseph Stanko, who heads government relations at the law firm Hunton and Williams and represents several utility companies. “So I don’t see how that is an ‘all of the above’ energy policy.’”

This rule is part of a larger group of regulations (Utility MACT, Clean Water Act Standards, Coal Ash, and others) that target coal-fired power plants, and it’s causing the slow-death of coal in the United States. As the Post reports, “utility companies have announced that they plan to shut down more than 300 boilers, representing more than 42 gigawatts of electricity generation — nearly 13 percent of the nation’s coal-fired electricity— rather than upgrade them with pollution-control technology.”

While there’s no evidence that this was the moment that will slow the rise of the oceans—EPA Administrator Lisa Jackson has conceded that EPA’s climate regulations won’t actually have a discernible impact on the climate–there is plenty of evidence that this will be the moment when the president destroyed the coal industry.

The Supreme Court’s decision in Citizens United to allow corporations to spend money on political activities has become a primary target for liberals in Congress. Sen. Bernie Sanders (I-VT) wrote this year that “this spending will fundamentally distort our democracy, tilting the playing field to favor corporate interests, discouraging new candidates, chilling elected officials and shifting the overall policymaking debate even further in the direction of giant corporate interests and the super-wealthy.”

Sen. Sanders was seconded by Sen. Chuck Schumer (D-NY), who said, “At a time when the public’s fears about the influence of special interests were already high, the Court’s decision stacks the deck against the average American even more.” Liberals, you see, want to defend the average American from corporate interests. Liberals want to stop special interest deals that “distort our democracy.” Liberals want to stand up to the “giant corporate interests” and “level the playing field.”

This fiction sells copies, but after last week, the true story was made plain: Congressional liberals voted overwhelmingly to keep “tilting the playing field,” but rather than the playing field of democracy, it was the playing field of the market. These liberals might not like corporate political spending, but they certainly don’t have a problem giving them a reason to spend.

Last week,  Sen. Jim DeMint (R-SC) introduced an amendment to the highway bill that would have banned all energy subsidies—not just for some companies, but for all of them; not just for solar, wind, and other renewables, but for coal, oil, and natural gas. The amendment was defeated 72 to 26—all of those 26 who voted to stop “tilting the playing field to favor corporations” were conservatives, not liberals. Every single liberal who voted, including Bernie Sanders and Schumer, voted to continue subsidizing energy companies at the average American’s expense.

Not only did liberals not support “leveling the playing field,” they voted to tilt the playing field even further in favor of special interests the same day. 45 Democrats voted for T. Boone Pickens’ payoff plan—otherwise known as the NATGAS Act, which would provide tax subsidies to corporations who produce natural gas powered vehicles and fueling stations. Also on the same day, only four Democrats voted to end tax subsidies for wind energy corporations. In other words, liberals hate corporations—as long as they’re not corporations that they want to fund with taxpayer dollars.

Corporations “distort democracy,” but only so that they can distort the market. To oppose Citizens United and yet favor the very reason corporations spend so heavily on elections is extreme hypocrisy. The DeMint Amendment exposed the sad truth that for all the rhetoric about coal, oil, and gas subsidies creating an unfair energy market that benefits fossil fuels, progressives would prefer to continue to such distortions  in favor of their own special interests rather than protect the average American taxpayer. So can we please put their populist myth to rest once and for all?

Carl Sagan

Common sense teaches that the world would be a better place if people were more informed about it. Scientists with the fervor of corner preachers exhort anyone who will listen to take an interest in scientific matters. Astrophysicist Carl Sagan writes, for example, that:

the consequences of scientific illiteracy are far more dangerous in our time than in any that has come before. It’s perilous and foolhardy for the average citizen to remain ignorant about global warming, say, or ozone depletion, air pollution, toxic and radioactive wastes, acid rain, topsoil erosion, tropical deforestation, exponential growth….How can we affect national policy… if we don’t understand the underlying issues?

Certainly everyone wants to overcome ignorance in the world, but notice that Sagan does not just complain about ignorance. Rather, he says that it is “dangerous,” “perilous,” and “foolhardy” to be ignorant of environmental issues. Passages like these rarely create “average citizens” who become experts on environmental policy, particularly when these issues barely warrant a mention in the rest of the book. Instead they create average citizens who become experts on caring about environmental policy. They tell the reader that it’s “perilous and foolhardy”  to ignore these issues. After all, they’re scientific.

The Experts on Caring then go out and flood politicians and bureaucrats with questions about the environment. What will you do about this or that new catastrophe? Those who ignore such calls are labeled as “anti-science.” Anyone who disagrees just doesn’t understand science.

This weekend, one such Caring Expert told me that “all our wealth has a downside. Think about global warming. We are responsible for that. Hurricanes and floods kill people.” Statements like these encapsulate the major problem with Experts on Caring: Even if they’re right about a problem, their sense of proportion has been totally distorted by the Carl Sagans of the world who tell them it’s “dangerous” not to care.

But knowledge of a problem gives you no conception of the relative risk it poses. As Matt Ridley points out: ”The Four Horsemen of the human apocalypse, which cause the most premature and avoidable death in poor countries, are and will be for many years the same: hunger, dirty water, indoor smoke and malaria, which kill respectively about seven, three, three, and two people per minute.” The level of human suffering these problems cause is not slightly more significant, but rather several dozen orders of magnitude more significant than global warming.

Creating Experts on Caring does science a disservice–it emotionalizes the issues from the outset. Worse, it ranks these problems as more important a priori–that is, (ironically) without any empirical or scientific support. Yet these are the most important issues, we’re told, because they’re scientific. The things I care about on the other hand–energy prices, employment, human freedom–aren’t “scientific.” This artificial ranking inflates the importance of certain problems at the expense of other more pressing ones.

This blind caring about “scientific” issues has another perverse consequence. Since the Experts on Caring aren’t really experts, they simply demand action NOW (always in capitals) without any real understanding of the consequences. Let’s suppose for the sake of argument that the Intergovernmental Panel on Climate Change was correct to conclude based on their research that CO2 emissions will cause significant economic damage by 2100. Does that scientific finding demand immediate political action? Or does it demand immediate and continuous replication, as science requires?

Even if we conclude global warming is a problem, does that imply what the political solution might be? No, not at all. Rushing ahead with any and every policy, with CAFE Standards, Cap & Trade, Renewable Energy Standards, Feed-in Tariffs, Renewable Energy Subsidies, Carbon Energy Taxes, Coal Carbon Capture and Storage, and a host of other policies without the slightest idea if they will help globally, or what their effect will be in combination, or what the trade-offs are, isn’t scientific, but it’s exactly the sort of policy-making blind caring encourages. “Act NOW,” chant the Experts on Caring, “Not in proportion to the problem, but in proportion to my fear.”

I’m sure Sagan truly wants people to become informed, but the effect of his exhortations are quite different. Vague statements that environmental issues are critically important is a recipe for creating Experts on Caring. There’s no doubt that the world would be a better place if people knew more about it, but time and resources are scarce, and everyone faces choices. It’s one thing to care about climate change (or as most of his book is about, pseudoscience). It’s quite another to moralize the issue claiming that people should care about these particular issues without any clear understanding why these and not others.

Such over-the-top rhetorical exuberance biases the would-be environmental seeker from the outset. The Expert on Caring trying to become a real expert must overcome a huge psychological hurdle thrust on him by Sagan and many others—that these issues are of vital importance to the survival of our species. It’s no surprise then that the Experts on Caring only lend credence to alarming research. They care—that must mean the issue is important.

Politics is, well, political, and as such, few battles in Washington are fought over principles as much as over power and image. That’s why in many political debates both sides are wrong because they fight for goals no American should want—namely, for the power to control society in their own way. That both parties share the same underlying myths about government and its role in the economy has been on elaborate display during the current bickering over whether the president should release oil from the Strategic Petroleum Reserve (SPR).

As I pointed out in a previous blog, the President shouldn’t just release some oil from the SPR, as Congressional Democrats want—he should release all the oil and close the SPR permanently. The reserve’s origins and purposes are entirely based on myth—that the 1973-74 OPEC oil embargo decreased imports so dramatically that a massive oil shortage resulted (read why this is wrong here). The political benefits of this myth are plentiful. It outsources blame for the energy crisis to foreigners—in particular, Arabs. It also creates a climate of fear that showers extraordinary powers on politicians and bureaucrats. Finally, it permits political saviors to rescue us from high gas prices.

Once the myth is accepted by both sides, however, facts can be jettisoned, and arguments can proceed on purely political grounds. Should the reserve be used or not?  Economic-sounding arguments are discussed, but in the end, the question isn’t economic—it’s political.

Economics explains how people will act in a market under the forces of supply and demand that are represented in prices. In a market, an action is worth taking if output exceeds input—that is, if the sales price of the finished good is sufficiently greater than the prices of the materials required to make it. In this way, we know that consumers valued the final good more highly than its inputs, producing profit or wealth for society. On the other hand, if consumers value the inputs more than the final good, the result is a loss signaling to the business that society demands those resources elsewhere in the economy.

That’s economics, but the decision to release oil from the SPR isn’t based on the forces of supply, demand, profits, nor prices. Rather, it’s pure politics, and in politics, you can’t be wrong.

Republicans argue, as Rep. Jim Sensenbrenner (R-WI) did in Politico yesterday, that although “the president is authorized to tap into [the SPR] if an emergency of significant scope and duration threatens to cause a price increase that is likely to have a major adverse impact,” no such crisis exists. But how do Republicans know that? Democrats say that such a crisis does exist. In a world without prices, everyone can be right since no one can be proved wrong. In a market, reserve owners know whether to hold or release oil from reserves based on the prices of doing one or the other—without prices, the decision just becomes arbitrary. Would it make you feel good to release the oil now or later?

Republicans wouldn’t feel good about releasing the oil because it’s bad politics. “The President is using a national security instrument to address his domestic political problems,” writes House Speaker John Boehner. In other words, “I don’t want the president to benefit politically from this decision”—“even if consumers suffer,” I can almost hear Democratic Rep. Ed Markey add.  Of course, when the Republican-held-Congress authorized sales from the SPR in 1996 for deficit reduction, they sang a different political tune. Why? Because the SPR is about politics, not economics.

 Read here why the SPR isn’t a national security issue, how the market deals with price shocks better than government, and why the arguments for the SPR are built on fiction.

Reps. Peter King (D-NY), Ed Markey (D-MA), and Rosa DeLauro (D-CT)  have written President Obama urging him to release oil from the U.S. government’s Strategic Petroleum Reserve (SPR) in order to help drive down high gas prices. Congressional Republicans are opposing the effort “to politicize” the SPR. Who’s right in this latest political squabble?

Well, Democrats are maybe 10 percent right. Congress should release oil from the SPR, but not just some—all of it! The SPR was created in 1975 after the OPEC oil embargo, which was instituted as retaliation for the U.S. intervention in the Yom Kippur War. President Nixon responded to the embargo with oil price controls. These controls created artificial scarcity as investors withdrew oil from the market to sell at higher prices later, causing massive shortages and gas lines.

In other words, the energy crisis was of Nixon’s own creation. Supposedly, the OPEC oil embargo so rapidly decreased oil imports that it was necessary for the U.S. to create a national reserve to hedge against another embargo. Except oil imports did not go down in 1973, or 1974, or 1975, they went up. All the embargo did was shift OPEC’s U.S. oil to other countries, and other oil normally intended for those countries to the U.S. Moreover, investors created private reserves as soon as they saw that Middle East oil was compromised, which means we exported less and imported more.

The SPR was created to solve an oil shortage, but since this was caused by Nixon’s controls, it seems that the reserve was actually created as a hedge against future politicians’ economic illiteracy—not future embargoes.

Nonetheless, many have argued the SPR serves a national security purpose, but this is codswallop. The Energy Policy and Conservation Act of 1975 created the SPR to prevent “severe energy supply interruptions” and prohibited private “hoarding” during a shortage beyond one’s “reasonable needs.” Furthermore, to think that the U.S. government—the organization with a printing press in their basement and the unlimited power to confiscate wealth and property—will somehow run short on oil is absurd in the extreme.

A supply disruption in the Middle East—even one caused by terrorists—does not imply the need for government action, especially when investors and private markets have already shown they can handle this economic risk. Since 1973, an oil futures market has developed to insure against fuel supply shocks. Moreover, private firms since that time have developed massive stockpiles of their own—325 million barrels worth. The SPR actually diminishes this market, as economists Jerry Taylor and Peter Van Doren explain:

Oil economists of all stripes acknowledge that maintaining public stockpiles discourages the accumulation of private inventories and perhaps even public inventories abroad because foreign governments have an incentive to “free ride” off U.S. inventories given that a U.S. release would reduce oil prices everywhere in the world. How much oil is displaced by the SPR is unknown, but prominent oil economists such as Philip Verleger, Brian Wright, and Jeffrey Williams suspect that the displacement is quite large. This stands to reason. It’s very expensive to hold oil in storage, and market actors aren’t going to be so inclined to do it if the government is going to step in and flood the market with crude whenever a nice profit opportunity materializes.

The bottom line is this: the government took over private activity in response to economic problems it created, and now it’s using that power to play hero at our expense—an expense of well-over $50 billion—all in order to save us from other problems of its own invention. Politicians argue over it without anyone questioning the premise that government should have an SPR at all.

Nor is spending billions of dollars on a useless service “better safe than sorry”—it’s stupid. And spending billions of someone else’s dollars on a useless service is worse than stupid—it’s immoral.

The president’s phony green economy is collapsing, drip by drip. While the rest of country is frantically trying to turn off the tap, it’s like the president has turned up his environmental music so loud he can no longer hear the coming cascade.

Consider the president’s clean car initiative, which has already funneled $5 billion into the electric car industry. Ener1—an electric car manufacturer who received $118 million from the Obama Department of Energy—went bankrupt two weeks ago. Fisker Automotive is downsizing and firing workers because the stimulus money that supported their green jobs ran out. Its battery supplier and fellow stimulus recipient A123 will also be down-and-out if Fisker goes. Even while the industry continues to receive tax credits for electric car sales, electric car manufacturers Aptera and Think both went bankrupt this month.

Enter the Obama 2012 budget, which fulfills his promise to “double-down” on clean energy investments. The budget not only continues the failed clean car fiasco, but actually escalates it, raising the $7,500 tax credit by $2,500 to $10,000 and broadening eligibility, in what sure looks like another industry bailout. Didn’t the president say something about bailouts in his State of the Union Address? Oh right, “It’s time to apply the same rules from top to bottom,” he claimed. “No bailouts, no handouts, and no copouts. An America built to last insists on responsibility from everybody.” Except for my green energy allies, he apparently forgot to add.

The budget also calls for one million electric cars “on the road” by 2015—no matter how long, or how much it takes. So let’s do the math: $10,000 X 1,000,000 cars = $10,000,000,000: $10 billion to make 1/234th of the total light duty vehicles on the road electric, and to reduce oil consumption by less than 1 percent.  If only 10,000 are sold next year, which would be low, it’ll cost taxpayers $100 million. As Iain Murray and I pointed out in a Washington Examiner op-ed last month, these are subsidies for the rich: “The Volt sells for about $40,000, while the Fisker Karma sells for $100,000—well above most Americans’ price range. That means that the federal government is again working to benefit the rich so they can drive cars that ease their environmental conscience.”

“We can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules,” the president told the nation in his State of the Union Address. But consider the demographics of average electric car buyers who will receive the benefits from all these subsidies. According GM CEO Dan Akerson, average incomes for Chevy Volt owners are $170,000/year, only Mercedes-Benz drivers earn more, but just barely.  Nissan Leaf owners average $140,000/year.

How is this fair to the average American or those who cannot afford a car? Is it fair to place the tax burden for the rich on the poor? Is everyone really “playing by the same set of rules” here? President Obama’s budget and rhetoric simply do not mix. He may have buried these subsidies for failed capitalists and wealthy environmentally-conscious car buyers at the back of his budget, but he can’t hide the fact that he’s no champion of the 99 percent any longer.

Iain Murray and I today published an article in the American Spectator, which disputes many of President Obama’s State of the Union energy policy claims. As we wrote, “While the president spent more time on the topic than any other policy area, he distorted the facts, misrepresented his plans, and ignored his record.” It’s time to set the record straight:

Obama announced that “tonight, I’m directing my Administration to open more than 75 percent of our potential offshore oil and gas resources.” For those who favor energy production, this sounds great, but a close inspection reveals that this announcement was nothing new — the sale should have been scheduled last year, and the only reason the administration is planning it now is that it is required under the Outer Continental Shelf Lands Act. In fact, he didn’t direct his administration to do anything new — he just recycled a plan actually released in November 2011 that actually kept closed key areas for future oil and gas exploration in Alaska, the Gulf of Mexico, and the Atlantic coastline.

The president claimed that, “over the last three years, we’ve opened millions of new acres for oil and gas exploration…. Right now, American oil production is the highest that it’s been in eight years. That’s right — eight years.” But that’s no thanks to the federal government. The administration didn’t hold a single offshore lease sale in all of 2010 and canceled sales off the coast of Alaska and Virginia this year. It’s the oil boom in North Dakota on private lands that’s kept domestic oil production from falling — not the president’s policies.

Obama continued, “The easiest way to save money is to waste less energy. So here’s another proposal: Help manufacturers eliminate energy waste in their factories and give businesses incentives to upgrade their buildings.” But manufacturers already have huge incentives to reduce wasted energy. Airlines today, for example, use almost half as much energy per passenger mile as they did in 1979 and 24 percent less than in 2000. No one needed to tell them to do that. Energy is only “waste” if it cost less to save it than to not. Forcing taxpayers to pick up the tab for manufacturers’ energy costs isn’t eliminating energy waste — it’s creating government waste.

Obama has already been burned by his poor energy investments, but that hasn’t stopped him from promoting them in every speech. “In three years, our partnership with the private sector has already positioned America to be the world’s leading manufacturer of high-tech batteries,” he said in reference to stimulus grants to an electric car battery manufacturer. That manufacturer was Ener1. Two days later, it filed for Chapter 11 bankruptcy.

Read the rest here.