Paying the price

From The New York Times:

Obama Outlines Ambitious Plan to Cut Greenhouse Gases

By  and  | Published: June 25, 2013 421 Comments

WASHINGTON — President Obama, declaring that “Americans across the country are already paying the price of inaction” on climate change, on Tuesday announced sweeping measures to reduce greenhouse gas pollution and prepare the nation for a future of damaging weather aggravated by rising temperatures.

Embracing an issue that could define his legacy but also ignite new battles with Republicans, Mr. Obama said he would use his executive powers to require reductions in the amount of carbon dioxide emitted by the nation’s power plants.

That was the centerpiece of a three-part plan that includes new federal spending to advance renewable energy technology, as well as spending to protect cities and states from the ravages of storms and droughts that are exacerbated by a changing climate.

Much further down was this paragraph:

“These policies, rejected even by the last Democratic-controlled Congress, will shutter power plants, destroy good-paying American jobs and raise electricity bills for families that can scarcely afford it,” Speaker John A. Boehner said in a statement released before Mr. Obama spoke.

That, of course, is the crux of the matter. Our economy is growing at a rate which is too slow to make a significant impact in unemployment, and real wages are declining for those people who do have jobs. What President Obama wishes to do will impose significantly higher costs on energy producers, and those costs will be passed right down to the consumer, most noticeably in the form of higher electric bills.

But most noticeably doesn’t mean all. Everything produced or sold in the United States involves electricity at some point, and usually many points, of the production and distribution path. When Giant Food Mart on Blakeslee Boulevard in Lehighton sees their electricity bills increase, it will have to increase the prices it charges for the food it sells to pay for those higher electric bills. The end consumer will have to pay just a little bit more – with the Democrats, it seems like it’s always just a little bit more — for the food that they buy.

Now, higher prices do not always mean an economic disadvantage, if those higher prices lead to increased economic activity and a boost to the velocity of money. The trouble is that this won’t be the case with the President’s plan. There will be a quick spike in the purchasing of additional mechanical devices to reduce CO2 emissions from fossil fuel powered electric plants, but once those devices have been purchased, they become nothing more than a maintenance and production expense, an added cost which does not result in any greater production. We wind up paying more dollars for the same goods. Worse, since more dollars wind up going to buy no more goods, fewer dollars remain for the purchase of other things; this will be an actual drag on an economy that doesn’t need anything more holding it back.

Of course, our esteemed President, knowing that the democratically elected representatives of the people would never pass such additional costs into law — Mr Boehner noted that even Democrat-controlled Congresses rejected this stuff — is going to try to rule by decree on this, by instructing federal agencies under his control to issue federal regulations which would impose such costs without the consent of the Congress. Representative democracy seems to mean rather little to this honorable Democrat.

The Republicans cannot stop the President from having such regulations issued, but they do have the power to stop their enforcement: all that they have to do is to refuse to fund the Environmental Protection Agency in the upcoming budget, and all of the enforcement mechanisms that the Administration would need will fall away. We shouldn’t have to do this, but if that’s what it takes to stop Hugo Chavez Barack Obama, then that’s what should be done.
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