Hans Bader

People aren’t willing to pay much to reduce the emission of greenhouse gases to fight global warming, according to a Washington Post-ABC News Poll. 52 percent said they would support a law that “significantly lowered greenhouse gas emissions” — but only if it cost them less than $10 a month. Only 39 percent said they would support such a law if it cost them $25 a month — which is vastly less than it would actually cost.

In the name of cutting greenhouse gases, the House passed a cap-and-trade carbon tax scheme backed by the Obama Administration in June. But the bill won’t significantly lower greenhouse gas emissions even in the U.S. One reason is that the bill was larded up with corporate welfare. 85 percent of its carbon allowances were given away to special interests free of charge, thanks to lobbying that turned the bill into an orgy of corporate welfare.

The bill also contains environmentally-harmful provisions, such as massive ethanol subsidies, which will result in “damage to water supplies, soil health and air quality.” Ethanol subsidies have resulted in forests being destroyed in the Third World, and caused famines that have killed countless people in places like Haiti.

Worse, the cap-and-trade tax will cost much, much more than $25 a month — with politically connected businesses like GE profiting at the expense of the taxpayer, as the Washington Examiner’s Tim Carney has chronicled in story after story. Carney calls the bill a “hidden bailout” for GE and other well-connected businesses.

Capping emissions through taxes and regulations isn’t cheap — Obama himself told the San Francisco Chronicle that under his cap-and-trade tax to fight global warming, Americans’ electricity bills would “skyrocket,” and coal power plants that now provide much of the nation’s energy would go “bankrupt.” There’s no free lunch (except for the politically-connected businesses that are backing the bill, and will be able to hike consumer prices as a result).

Under the bill, the average household will pay about $248 more a month, say economists, about ten times more than voters said they were unwilling to pay in the Post-ABC News poll. Electricity bills alone will rise by more than $30 a month, utilities will rise by $69 a month, and other consumer goods will also become more expensive, because energy is part of the cost of almost everything we buy.

Even the researchers backing the bill say it will have a tiny effect on global warming by the year 2050 — “much less than one degree.” But it will cost the economy $7.4 trillion, destroying much of our industrial base.

So it’s all pain and no gain, something reinforced by the bill’s poor drafting and politically-motivated giveaways — and the fact that most greenhouse gas emissions occur outside the U.S. and beyond the reach of U.S. cap-and-trade taxes. In fact, the bill could actually increase pollution by driving smokestack industries overseas to places like India and China, where they would avoid not only costly greenhouse gas regulations, but also American law’s restrictions on traditional pollutants like sulfur dioxide that were restricted because of their dangerousness long before global warming even became an issue. (China has restrictions on auto emissions, but its restrictions on industrial pollution are minimal and poorly unenforced, leading to vast amounts of smog and acid rain).

Meanwhile, the Administration is undermining alternative energy, which doesn’t give off greenhouse gases. Obama is killing a state-of-the-art nuclear waste facility at Yucca Mountain after billions of taxpayer dollars had already been spent preparing it for use. Doing that foolishly puts taxpayers on the hook for up to $100 billion in payments to nuclear power plant owners under government contracts. The killing of the facility will make it more difficult to dispose of nuclear waste from existing power plants, and harder to construct new nuclear power plants to generate badly-needed energy.

The Obama Administration is also doing nothing to use federal law to preempt state and local barriers to alternative energy. Wind and solar power continue to be blocked by people who say “Not in My Backyard.” California’s liberal Senators oppose developing solar power in the barren Mohave Desert, where virtually no one lives, wanting to keep it in its pristine state. But if solar panels can’t be put there, where plants and animals are sparse, where on Earth can they be put? The Kennedy family long blocked a wind power facility near Cape Code, worrying that it would interfere with their view of the oceean.

Rather than doing anything constructive about this, the Obama Administration is opposing preemption that would reduce the arbitrary power and prerogatives of local bureaucrats and trial lawyers. For ideological reasons, it issued an “anti-preemption” rule on May 20 that will undercut federal policies like developing alternative energy. The federal government should be using its power under the Commerce Clause to override parochial regulations that interfere with alternative energy projects and refineries.

One of Obama’s own advisers admits that the cap-and-trade energy-rationing scheme backed by the “Obama Administration and Congressional Democrats” would “have a trivially small effect on global warming while imposing substantial costs on all American households. And to get political support in key states, the legislation would abandon the auctioning of permits in favor of giving permits to selected corporations.”

Obama adviser Martin Feldstein notes that “the Congressional Budget Office recently estimated that the resulting increases in consumer prices” from capping the amount of carbon dioxide energy users can emit “would raise the cost of living of a typical household by $1,600 a year,” a figure that “would rise significantly” from year to year.

Congress plans to spend $200 million on luxury jets for liberal House leaders, even though it earlier denounced the automakers for having corporate jets, and even though the luxury jets the House plans to buy emit vast amounts of pollution and greenhouse gases. Now they’ll be able to go on foreign junkets and hob-nob with wealthy lobbyists in style.

As Victor Davis Hanson notes, this excess and hypocrisy is typical of a House Speaker “Pelosi who rails about carbon footprints, but wants the biggest private-use jet she can get,” tax-raising liberal Congressmen like “Dodd and Rangel, who skip out on their own taxes, and find all sorts of immoral ways to finance and maintain second and third” homes, and Obama Administration nominees like Treasury Secretary Tim Geithner and HHS nominee Daschle “who favor more taxes — if they can avoid taxes, or have tax-free limo service.”

The know-nothings in Congress are poised to waste billions more on the cash-for-clunkers program, even though most Americans oppose it. It will have no overall environmental benefit, note CBS News and Fox News commentaries, even though its sponsors falsely claimed it would.

The clunkers program was slated to cost a billion dollars for the entire year, but it ended up running out of money after just 5 days. (Now, these same geniuses claim they can overhaul the health-care system for just a trillion dollars in increased federal spending. Don’t believe them: it will raise taxes and harm the insured. Health care bills always cost more than predicted.).

The cash-for-clunkers program is monumentally wasteful and stupid, destroying perfectly good automobiles, cutting off the supply of cheap used cars needed by poor people, and rewarding people who bought gas guzzlers rather than fuel-efficient vehicles.

It also provides surprisingly little benefit to the Detroit automakers that it was intended to bail out, who have already received more than $70 billion from taxpayers, and it wipes out jobs at used-car and parts businesses.

Congressional leaders and Obama also back a huge cap-and-trade carbon tax that would do little to protect the environment, while costing the economy trillions. The cap-and-trade tax was pushed through the House before the text of the bill even became available. The bill was over 1090 pages long and contained special interest giveaways to a legion of big corporations and their lobbyists. At the last minute, 300 more pages were added to the bill that few in Congress had even read, and had to be manually inserted into the existing 1000 pages after the bill was passed, based on guesses about where those pages would fit in. Thus, the bill did not even really exist at the time it was passed.

In 2008, Obama privately admitted to a San Francisco Chronicle reporter that his cap-and-trade carbon tax would cause people’s electric bills to “skyrocket.” The cap-and-trade tax will do little to cut greenhouse gas emissions, since it contains so many special interest giveaways and environmentally-destructive provisions like protections for ethanol, which promotes soil erosion and deforestation. Meanwhile, Obama has thwarted more use of nuclear energy, which reduces greenhouse gas emissions, by blocking use of the Yucca Mountain nuclear-waste disposal site after billions of dollars in taxpayer money had already been spent developing it.

The House has already passed $2 billion in additional spending on the wasteful cash-for-clunkers program, adding to more than $70 billion in wasteful auto bailouts. Senate Majority Leader Harry Reid (D-NV) wants to ram more spending on clunkers through the Senate before rising public opposition makes that possible — the same way Congressional leaders rammed through the $800 billion stimulus package before the public learned what was in it.

Buried in the stimulus package were provisions that ended welfare reform. The stimulus package is now projected to cut the size of the economy “in the long run.” The Administration claimed it would deliver a short-run “jolt” that would quickly lift the economy, but unemployment rose rapidly after its passage, and the package has actually destroyed thousands of jobs in America’s export sector, as well as subsidizing welfare and waste.

CNN notes that there are “5 freedoms you’d lose in health care reform” as promoted by the Obama Administration: the freedom to choose your doctors, the freedom to choose what’s in your plan, the freedom to keep your existing plan, the freedom to be rewarded for healthy living, and the freedom to choose high-deductible coverage.

Earlier, we described how Obama’s health-care plan would destroy many affordable health-care plans, raise taxes on the middle class, and break Obama’s campaign promises, as well as his recent pledge that “if you like your health care plan, you can keep it.”

As CNN notes, “the Obama platform would mandate extremely full, expensive, and highly subsidized coverage — including a lot of benefits people would never pay for with their own money — but deliver it through a highly restrictive, HMO-style plan that will determine what care and tests you can and can’t have.” “If you prize choosing your own cardiologist or urologist under your company’s Preferred Provider Organization plan (PPO), if your employer rewards your non-smoking, healthy lifestyle with reduced premiums, if you love the bargain Health Savings Account (HSA) that insures you just for the essentials, or if you simply take comfort in the freedom to spend your own money for a policy that covers the newest drugs and diagnostic tests — you may be shocked to learn that you could lose all of those good things under the rules proposed in the two bills” that Congressional leaders have drafted to implement Obama’s plan.

House Speaker Nancy Pelosi wants to rush the health-care bill through Congress before most people can even figure out what’s in the bill. That’s how she pushed through Congress the $800 billion stimulus package, which contained hidden provisions that ended welfare reform, and which is now projected to cut the size of the economy “in the long run.” (The stimulus package was supposed to deliver a short-run “jolt” that would quickly lift the economy, but unemployment rose rapidly after its passage, and the package has actually destroyed thousands of jobs in America’s export sector, as well as subsidizing welfare and waste.)

The bill may be rewritten at the last moment to provide more giveaways to special interests, like the huge cap-and-trade energy tax that Pelosi recently strong-armed through the House. (As Obama once noted, his version of that tax would make people’s electric bills “skyrocket.”) The energy tax was pushed through before the text of the bill even became available. The bill was over 1090 pages long and contained special interest giveaways to a legion of big corporations and their lobbyists. At the last minute, 300 more pages were added to the bill that few in Congress had even read, and had to be manually inserted into the existing 1000 pages after the bill was passed, based on guesses about where those pages would fit in. Thus, the bill did not even really exist at the time it was passed.

These tax increases are part of a long line of broken promises, such as Obama’s pledge to enact a “net spending cut,” which he flouted with proposed budgets that will explode the national debt through $9.3 trillion in massively increased deficit spending.

Obamacare would also apparently restrict resources for end-of-life care for the elderly, and mandate wasteful end-of-life counseling for the elderly (such as lecturing them about the right to hasten their own death by refusing nutrition).

Earlier, the non-partisan Congressional Budget Office gave an honest but “devastating assessment” of the incredibly high cost of the health-care plans backed by Obama, which would cost well over a trillion dollars, to cover just a fraction of the uninsured.

Obama is angry about that truthful conclusion, as well as the CBO’s finding that his wasteful stimulus package will actually reduce the size of the economy “in the long run.” (Obama had claimed that only his stimulus package could save America from “disaster” and “irreversible decline“).

So Obama recently invited CBO Director Douglas Elmendorf, a “Democratic appointee,” to the White House to pressure him to reduce his cost estimates.

It is doubtful that Obamacare would live up to any of Obama’s claims. His other legislation hasn’t. His stimulus package has been a fiasco, as much of the public now realizes: just 25% say it has helped the economy.

And his cap-and-trade energy tax, if passed by the Senate, would cost the economy trillions, while doing little to cut greenhouse gas emissions, since it contains so many special interest giveaways and environmentally-destructive provisions like protections for ethanol subsidies, which harm the environment, destroy forests, and cause world hunger. Meanwhile, Obama has undermined nuclear energy, which reduces greenhouse gas emissions, by wastefully blocking use of the Yucca Mountain nuclear-waste disposal site after billions of dollars in taxpayer money had already been spent creating it.

In 2008, Obama promised not to raise taxes on anyone making less than $250,000 a year. But he is now breaking that promise by proposing to tax some middle-class families to pay for health care. Obama has also falsely pledged that if you like your health insurance, you will be able to keep it under his plan. But the Congressional health-care bills he backs would destroy countless inexpensive health-care plans by gutting a federal law called ERISA that makes it possible for employers to offer them. Obama’s plan does nothing to curb the main drivers of health-care costs, even as it raises the specter of rationing and social engineering. It will not cover as much of the population as the health-insurance systems in France or Switzerland, but it will cost much more.

As CNN notes, Obama’s plan would take away “5 freedoms,” including the freedom to choose your doctors, the freedom to choose what’s in your plan, the freedom to keep your existing plan, the freedom to be rewarded for healthy living, and the freedom to choose high-deductible coverage.

Obama’s health-care plan is drawing criticism from one of his own advisers, Harvard University’s Martin Feldstein. In the Washington Post, Feldstein warns that “For the 85 percent of Americans who already have health insurance, the Obama health plan is bad news. It means higher taxes, less health care and no protection if they lose their current insurance because of unemployment or early retirement.” Obama’s plan would “cost more than $1 trillion,” and raise the top federal “income-tax rate from 35 percent today to more than 45 percent,” he notes.

Its increase in health-care costs is so obvious that even Democratic governors openly worry that it will explode their states’ Medicaid costs. Conservatives are concerned that it would single out illegal aliens for preferential treatment, because it permits illegal aliens, but not American citizens, to avoid buying health insurance, even though illegal aliens could access government-sponsored health insurance through the so-called “public option,” thanks to its lack of eligibility verification safeguards. Supporters of universal health care coverage like Mickey Kaus worry that it will lead to arbitrary restrictions on health care for people who now have decent health-care coverage.

In 2008, Obama promised not to impose any kind of tax increase on people making less than $250,000 a year: “I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.” (Barack Obama, September 12, 2008, Dover, NH). But millions of people now face direct or indirect tax increases under his plan.

Obama’s plan so obviously would increase the deficit that its supporters are now crafting a tax on health insurance provided to non-union workers. Never mind that Obama’s campaign spent millions of dollars on campaign ads attacking the very idea of taxing health-insurance benefits.

It’s not the first breach of Obama’s campaign pledges to the middle class. Obama earlier broke his promise by signing into law an excise tax increase (the SCHIP tax) paid mainly by the poor, and advocating income tax increases on households that make thousands of dollars less than $250,000 a year. These tax increases are part of a long line of broken promises, such as Obama’s pledge to enact a “net spending cut,” which he flouted with proposed budgets that will explode the national debt through $9.3 trillion in massively increased deficit spending.

Obama also backs a huge cap-and-trade carbon tax that would be borne disproportionately by low-income households. (The cap-and-trade tax was pushed through the House before the text of the bill even became available. The bill was over 1090 pages long and contained special interest giveaways to a legion of big corporations and their lobbyists. At the last minute, 300 more pages were added to the bill that few in Congress had even read, and had to be manually inserted into the existing 1000 pages after the bill was passed, based on guesses about where those pages would fit in. Thus, the bill did not even really exist at the time it was passed). In 2008, Obama privately admitted to San Francisco Chronicle reporter that his cap-and-trade carbon tax would cause people’s electric bills to “skyrocket.” The cap-and-trade bill will cost the economy trillions, while doing little to cut greenhouse gas emissions, since it contains so many special interest giveaways and environmentally-destructive provisions like protections for ethanol, which promotes soil erosion and deforestation. Meanwhile, Obama sabotaged nuclear power, which reduces greenhouse gas emissions, by blocking use of the Yucca Mountain nuclear-waste disposal site after billions of dollars in taxpayer money had already been spent developing it.

The Wall Street Journal explains how the health-care bills backed by Obama would destroy many cheap employer health-care plans by gutting key provisions of the federal ERISA law, which slices through red tape and allows employers to provide economical health-insurance plans on a nationwide basis. The bills would open the floodgates to costly lawsuits against employers that provide health insurance to their employees, and require bureaucratic approval of health-insurance plans before they could go into effect on a national basis. In the absence of ERISA, health insurance plans provided by a national company have to satisfy a bewildering array of conflicting regulations and mandates that differ from state to state, add cost, complexity, and delay to medical care, and balkanize the health-care sector.

Other countries that have cheaper health care do not have local health-insurance regulations, preferring one national regulatory scheme for everyone. My French father-in-law is a communist trade unionist, but it was obvious even to him that he needed private supplemental health insurance to fill the gaps in France’s national health-care system. So he bought a private health insurance policy on the free market that came in handy when he needed continuing care after his quadruple bypass surgery. Supposedly socialist France actually has much less regulation of health insurance than supposedly capitalist America, where insurance is terribly costly in states like New York and New Jersey because of all the regulations and government mandates.

Economists and insurance experts have long proposed ending the federal regulation that allows states to block consumers from buying health-insurance across state lines. Almost every other product can be bought across state lines. But the Obama Administration is rigidly opposed to this reform. In a debate with Sarah Palin, Joe Biden championed this harmful regulation that impoverishes American consumers to reinforce the power of state bureaucrats and the profits of expensive health-insurance providers that benefit by thwarting competition from cheaper out-of-state rivals. So much for fixing what’s wrong with the status quo.

Without the reforms opposed by Obama, we will never get our health care costs down to the levels of other countries, which have enormous cost advantages over the U.S. through things like lower doctor and nurse salaries, less defensive medicine from costly and unwarranted malpractice suits (America uses virtually unguided juries to decide malpractice cases, even though juries are not experts either at seeing through unfounded claims, or at recognizing genuine ones where the doctor was really negligent), and lower drug costs (mostly from those countries’ artificial caps on drug costs, which effectively forces U.S. consumers to pay for the entire world’s R&D costs, and partly from other factors like lower products-liability costs, since the U.S. refuses to preempt even lawsuits against FDA-approved drugs). Liberal lawmakers are seeking to make Obama’s plan even worse and more costly by turning it into a “trial lawyer bonanza.”

Earlier, the non-partisan Congressional Budget Office gave an honest but “devastating assessment” of the incredibly high cost of the health-care plans backed by Obama, which would cost well over a trillion dollars, to cover just 16 million of the more than 40 million uninsured Americans.

Obama is angry about that truthful conclusion, as well as the CBO’s finding that his wasteful stimulus package will actually reduce the size of the economy “in the long run.” (The stimulus package also destroyed thousands of jobs in America’s export sector, and ended welfare reform).

So Obama recently invited CBO Director Douglas Elmendorf, a “Democratic appointee,” to the White House to pressure him to reduce his cost estimates. Earlier, Democratic Senator Majority Leader Harry Reid earlier attacked Elmendorf for reporting the truth about the Administration’s costly health care plans, suggesting that Elmendorf should “run for Congress.” To Reid and Obama, politics comes before truth. But the last thing we need is Enron-style accounting from government accountants.

Obamacare would also restrict resources for end-of-life care for the elderly, and mandate the provision of wasteful end-of-life counseling for the elderly (such as lecturing them about the right to hasten their own death by refusing nutrition).

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).

One of Obama’s own advisers admits that the cap-and-trade energy-rationing scheme backed by the “Obama Administration and Congressional Democrats” would “have a trivially small effect on global warming while imposing substantial costs on all American households. And to get political support in key states, the legislation would abandon the auctioning of permits in favor of giving permits to selected corporations.”

Obama adviser Martin Feldstein notes that “the Congressional Budget Office recently estimated that the resulting increases in consumer prices” from capping the amount of carbon dioxide energy users can emit “would raise the cost of living of a typical household by $1,600 a year,” a figure that “would rise significantly” from year to year.

Meanwhile, politically-connected corporations would make a bundle, since the “bill would give away some 85 percent of the permits” to emit carbon dioxide to favored “businesses instead of selling them at auction.”

Feldstein, a Harvard economist who has advised Obama, earlier warned that “the barrage of tax increases proposed in President Barack Obama’s budget could, if enacted by Congress, kill any chance of an early and sustained recovery.” He compared Obama’s tax increases to the ones that contributed to the Great Depression and the “Lost Decade” of economic stagnation and decay in Japan.

Feldstein, who serves on Obama’s economic advisory board, has also “warned of serious inflation and higher taxes down the road” as a result of Obama’s policies.

Feldstein earlier noted that President “Obama’s biggest proposed tax increase is the cap-and-trade system of requiring businesses to buy carbon dioxide emission permits. . .CBO Director Douglas Elmendorf testified before the Senate Finance Committee on May 7 that the cap-and-trade price increases . . . would cost the average household roughly $1,600 a year, ranging from $700 in the lowest-income quintile to $2,200 in the highest-income quintile.”

That’s a highly regressive tax increase, since lowest-income earners don’t make a third of what highest-income earners make, but they would incur a third as much cost. It’s regressive in the same way as the 1932 excise tax increase by Herbert Hoover that deepened the misery of the Great Depression.

During the Great Depression, Herbert Hoover damaged the economy, and impoverished the American people, with costly, artificial attempts to stimulate the economy through increased government spending, financed by heavy taxes like the Revenue Act of 1932.

Obama earlier admitted that “under my plan of a cap and trade system, electricity rates would necessarily skyrocket.” As Obama admitted, that cost would be directly passed “on to consumers” — just the way Herbert Hoover’s regressive excise taxes were in 1932. Although the tax’s supporters claim it will cut greenhouse gas emissions, it may perversely increase them and also result in dirtier air.

In reality, Obama’s proposed “cap-and-trade” tax is likely to raise $2 trillion over the next decade, far more than even Feldstein anticipates. That’s far more than the $646 billion the Administration earlier estimated — amounting to at least $3,100 per family per year. And that figure may be dwarfed by the amount of money siphoned from consumers to well-connected corporations that have learned how to game “cap-and-trade” schemes.

In the Great Depression, President Herbert Hoover raised marginal tax rates to 63%, and went on a deficit spending binge. Similarly, Obama has proposed higher marginal tax rates, which will produce another $1.9 trillion in tax increases.

In spite of its massive size, Obama’s carbon tax won’t begin to pay for all his spending increases, such as a budget that will generate $4.8 trillion in increased deficits, Obama’s trillion-dollar toxic-asset program, and his $800 billion, economy-shrinking “stimulus” package, all of which contradict Obama’s campaign pledge of a “net spending cut.”

These tax increases are breaches of Obama’s campaign promise not to raise taxes on people making less than $250,000 a year, which he earlier broke by signing into law the regressive SCHIP excise tax increase.

It’s part of a long line of broken promises, such as Obama’s pledge to enact a “net spending cut,” which he discarded by offering mind-bogglingly large budgets that will explode the national debt through $9.3 trillion in massively increased deficit spending.

Obama has spent on an unprecedented scale, such as for a stimulus package that has actually shrunk the economy and destroyed thousands of jobs, and an auto bailout that forces cash-strapped taxpayers to bail out high-paid union auto workers, whose pay remains much higher than that of the typical taxpayer, while saddling the car companies with politically-correct mandates that may kill their chance of survival.

Even the liberal Washington Post, which endorsed Obama and has not backed a Republican for president since 1952, is getting fed up with the Obama Administration’s wasteful and politicized bailouts of General Motors and Chrysler. Today, it laments the
“imminent transformation of General Motors into a government-owned company, infused with upward of $50 billion in federal money.” “It doesn’t take much imagination to forecast the political pressures that will buffet the government-as-auto-executive. We’ve seen one effect already in the preferential treatment of the autoworkers’ union at the expense of private creditors. . . . 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. And politics will now divert the company’s attention away from making cars consumers actually want. “Influential members of Congress will insist on jobs in their districts; environmentalists will want electric cars; overseas sourcing will be frowned upon. How such decisions affect profits could become secondary.”

That’s what happened in Britain in the 1970s. The government took over and attempted to bail out the country’s auto industry, and ruined it in the process, destroying whatever chance it had left to survive. The British auto industry ended up being run mainly to benefit the unions, and produced politically-correct cars drivers didn’t want.

Earlier the Post argued that Obama “should stop bullying the company’s bondholders”: “While the Obama administration has been playing hardball with bondholders, it has been more than happy to play nice with the United Auto Workers. How else to explain why a retiree health-care fund controlled by the UAW is slated to get a 39 percent equity stake in GM for its remaining $10 billion in claims while bondholders are being pressured to take a 10 percent stake for their $27 billion?” “If this were a typical bankruptcy, the company would be allowed by law to tear up its UAW collective bargaining agreement and negotiate for drastically reduced wages and benefits. That’s not going happen. Phrased another way: The government won’t let that happen.” Instead, the government is moving towards “financial engineering that ignores basic principles of fairness and economic realities to further political goals.”

The automakers would have been better off simply filing for bankruptcy last fall rather than seeking a taxpayer-funded bailout. The bailouts have cost taxpayers tens of billions, but made it harder to fix the root causes of the crisis facing the Detroit automakers, such as excessive labor costs.

The federal government poured billions of dollars into Chrysler, which then went bankrupt and now is in the process of merging with Fiat. But Chrysler may never revive, thanks to absurdly generous compensation for the company’s union employees. The Obama Administration has refused to cut union wages substantially, though it had no compunction about ripping off the pension funds and other lenders who loaned money to Chrysler to try to keep it afloat. Even union members seem surprised by how little they were asked to sacrifice. (The Administration is also seeking to rip off GM bondholders to benefit the union).

Moderate Democrat Mickey Kaus, who reluctantly voted for Obama, notes that the federal bailout may yet fail because of Obama’s failure to reduce excessive labor costs:

“Before the deal, Chrysler’s UAW workers made $28 an hour. After the deal, they’ll make $28 an hour. They gave up a scheduled increase in wages, plus a couple of scheduled bonuses. That explains why Chrysler’s Belvidere, Illinois workers told TV station WIFR that ‘the plan is not nearly as drastic as they expected.’ …As for Chrysler’s ‘chance for long-term success,’ it appears vanishingly small. Italian manufacturer FIAT is supposed to save Chrysler with new products, but according to a recent Automotive News article, ‘four of the six new vehicles from Fiat will enter the small-car segment,’ which is highly competitive but ‘covers only 14 percent of the entire U.S. light-vehicle market.’ . . . Pathetically, Chrysler hopes that even if they don’t save the company the new small cars will ‘[b]urnish the environmental image of Chrysler brands,’ says Automotive News. Unfortunately, the pipeline for those brands’ other, larger, products–burnished or not–is pretty much empty. If Chrysler workers were paid, say, not $28 an hour instead of $24–still not bad–the firm might actually have a ‘chance for long term success’ through charging lower prices. But that wasn’t a sacrifice Obama was ready to ask (even if Belvidere workers were apparently willing).”

In addition to leaving General Motors and Chrysler saddled with excessive costs and union ownership, Obama harmed them by radically ratcheting up federal CAFE fuel-economy standards, which affect them more than their foreign competitors. 50,000 jobs could be lost. And his global-warming regulations will destroy countless jobs and cut “household purchasing power,” reducing auto sales and Chrysler’s chances of survival.

The federal government poured billions of dollars into Chrysler, which then went bankrupt and merged with Fiat. But Chrysler may never revive, thanks to absurdly generous compensation for the company’s union employees. The Obama Administration has refused to cut union wages substantially, though it had no compunction about ripping off the pension funds and other lenders who loaned money to Chrysler to try to keep it afloat. Even union members seem surprised by how little they were asked to sacrifice.

Moderate Democrat Mickey Kaus, who reluctantly voted for Obama, notes that the federal bailout may yet fail:

“Before the deal, Chrysler’s UAW workers made $28 an hour. After the deal, they’ll make $28 an hour. They gave up a scheduled increase in wages, plus a couple of scheduled bonuses. That explains why Chrysler’s Belvidere, Illinois workers told TV station WIFR that ‘the plan is not nearly as drastic as they expected.’ …

“As for Chrysler’s ‘chance for long-term success,’ it appears vanishingly small. Italian manufacturer FIAT is supposed to save Chrysler with new products, but according to a recent Automotive News article, ‘four of the six new vehicles from Fiat will enter the small-car segment,’ which is highly competitive but ‘covers only 14 percent of the entire U.S. light-vehicle market.’ ‘The volumes need to be big for Chrysler to survive,’ [market analyst Tracy Handler] said. ‘Will they be? I have doubts about that.’

“See also this BBC article (”it’s madness”). Pathetically, Chrysler hopes that even if they don’t save the company the new small cars will ‘[b]urnish the environmental image of Chrysler brands,” says Automotive News. Unfortunately, the pipeline for those brands’ other, larger, products–burnished or not–is pretty much empty.

“If Chrysler workers were paid, say, not $28 an hour instead of $24–still not bad–the firm might actually have a ‘chance for long term success’ through charging lower prices. But that wasn’t a sacrifice Obama was ready to ask (even if Belvidere workers were apparently willing).”

While saddling Chrysler with excessive compensation costs and union ownership, the Obama Administration has inflicted a body blow to its ability to sell its traditional lines of large vehicles by radically ratcheting up federal CAFE fuel-economy standards, which harm the Detroit automakers more than their foreign competitors. 50,000 jobs could be destroyed as a result. Meanwhile, the global-warming regulations backed by the Administration will destroy millions of jobs and “decrease average household purchasing power,” thus cutting auto sales and further hurting automakers like Chrysler.

One of Obama’s own advisers now says that “the barrage of tax increases proposed in President Barack Obama’s budget could, if enacted by Congress, kill any chance of an early and sustained recovery.” He compares Obama’s tax increases to those that deepened the Great Depression.

In the Depression, President Hoover imposed regressive excise taxes that burdened consumers. Obama is now doing the same thing through his proposed $2 trillion cap-and-trade carbon tax. Obama privately admitted to the San Francisco Chronicle (which didn’t report it) that under his “plan of a cap and trade system, electricity rates would necessarily skyrocket.” As Obama admitted, that cost would be directly passed “on to consumers” — just the way Herbert Hoover’s 1932 excise tax increase was. Although the tax’s supporters claim it will cut greenhouse gas emissions, it may perversely increase them and also result in dirtier air. It is also chock full of corporate welfare, regional favoritism, political pay-offs, and give-aways to special interests.

The $800 billion stimulus package pushed through by Obama has ignited a trade war with Canada, reports the Washington Post. In response to vague “buy American” provisions in the stimulus, “A number of Ontario towns, with a collective population of nearly 500,000, retaliated with measures effectively barring U.S. companies from their municipal contracts — the first shot in a larger campaign that could shut U.S. companies out of billions of dollars worth of Canadian projects.”

A trade war is also underway with Mexico, thanks to a provision in the stimulus package that blocked a measley 97 Mexican truckers from U.S. roads. That minor NAFTA violation “caused Mexico to retaliate with tariffs on 90 goods affecting $2.4 billion in U.S. trade,” destroying 40,000 American jobs.

Obama’s protectionism echoes Herbert Hoover’s protectionism, which helped spawn the Great Depression. President Hoover signed the Smoot-Hawley tariff, which helped turn a recession into the Great Depression by triggering a trade war with other countries.

Unemployment is now even higher than what Obama predicted it would be without the stimulus. The White House now admits that there will be no job growth until 2010. The Congressional Budget Office repeatedly predicted that the stimulus would shrink the economy “in the long run,” but increase it in the short run, i.e., by the next election.

But so little of the stimulus money has gone into sectors of the economy where unemployment is high (like construction and transportation) that it seems to be doing nothing for the economy even in the short run. The $100 billion it pours into education — a sector where unemployment is very low, and where the U.S. also spends more per capita than almost every other country — appears likely to be wasted. Only 5.9 percent of the stimulus will go to transportation, a small amount compared to the amount of money it showers on state governments, which are using it to continue to provide lucrative pension and health benefits for state employees, whose wages continue to rise much faster than private sector workers.

Obama is following in Herbert Hoover’s footsteps on taxes and spending. In the Great Depression, Hoover raised marginal tax rates to 63%, and went on a deficit spending binge. Similarly, Obama has proposed higher marginal tax rates, which will produce another $1.9 trillion in tax increases. One of Obama’s own advisers now says that “the barrage of tax increases proposed in President Barack Obama’s budget could, if enacted by Congress, kill any chance of an early and sustained recovery.” He compares Obama’s tax increases to those that deepened the Great Depression.

Hoover imposed regressive taxes that burdened consumers, like the Revenue Act of 1932. Obama is now doing the same thing through his proposed $2 trillion cap-and-trade carbon tax. Obama privately admitted to the San Francisco Chronicle (which didn’t report it) that under his “plan of a cap and trade system, electricity rates would necessarily skyrocket.” As Obama admitted, that cost would be directly passed “on to consumers” — just the way Herbert Hoover’s 1932 excise tax increase was. Although the tax’s supporters claim it will cut greenhouse gas emissions, it may perversely increase them and also result in dirtier air. It is also chock full of corporate welfare, regional favoritism, political pay-offs, and give-aways to special interests.