Some Free Market Thinking ...

ViRedd · #1 06-02-2008, 09:20 AM

May 27, 2008, 1:32 p.m.

Coal-Cap Disaster
For McCain, bad carbon economics could lead to even worse carbon politics.

By Larry Kudlow

Tuesday’s Wall Street Journal strongly editorializes against the Warner-Lieberman cap-and-trade plan that allegedly will solve our alleged problem with global warming — now called climate change. This plan is very similar to the one Sen. John McCain announced two weeks ago. The Journal argues that cap-and-trade “would impose the most extensive government reorganization of the American economy since the 1930s,” including a huge tax increase, higher prices across-the-board, and significant losses to economic growth in the decades ahead.

But why do we need a planned economy for energy or anything else? Why not a fully deregulated free market for energy where prices allocate production and consumption?

And why not allow the current $130-a-barrel oil price to open the door to a full portfolio of energy resources, including offshore drilling, Alaska, nuclear power, oil shale, conversion of coal and natural gas to liquid fuel, and the development of so-called alternative-energy sources such as solar, wind, and various cellulosic investments (although this latter group may never contribute more than 10 percent to our energy needs)? A true free-market approach wouldn’t pick winners and losers with heavy subsidies or penalties.

Incidentally, market forces also will curb energy consumption. The rising price of crude oil and gas at the pump has already cut demand sharply. Michigan professor Mark Perry, at his great Carpe Diem blog, reports that Americans in March 2008 drove 11 billion fewer miles than they did in March 2007 — a drop of 4.3 percent. This marks the first traffic decline since 1979 while the month-to-month percentage drop is the biggest since record keeping began in 1942. It’s also the fifth straight monthly falloff in miles driven on a year-on-year basis.

Perry correctly bemoans the fact that the U.S. is the only country in the world where policies actually limit energy supply. And it’s my contention that Gosplan-type cap-and-trade regulatory planning will sharply limit our energy resources and our economy in the decades ahead.

The Wall Street Journal notes that under Warner-Lieberman existing coal-fired power plants that currently provide about one-half of U.S. electric power will be shut down, to be replaced by new nuclear-power facilities and other alternative technologies yet to be developed. Let that idea sink in. By pulling the plug on half of our current electricity production, cap-and-trade will risk a massive undermining of the American economy, as well as our future economic and national security.

The coal story is so important simply because the U.S. has massively undeveloped coal resources. With 27 percent of the world’s coal reserves estimated at 270 billion tons, the U.S. is the Saudi Arabia of coal. And yet cap-and-trade would destroy this critical sector.

New coal technologies being developed right now wouldn’t even be allowed to flourish under cap-and-trade. Synthetic-fuel-developed coal, through the Fisher-Tropsch technology, is a proven gas-to-liquid process that sequesters coal carbon. It could power the American economy for generations. Rentech Corp. is already using this process to create an ultra-low carbon and sulfur liquid that can be easily adapted to all our transportation needs. According to the ESS Environmental company, other chemical-based technologies that produce virtually no carbon emissions also could be used.

But the great risk is that cap-and-trade will stop these technologies dead in the water, right in their tracks. That would be a tragedy.

Sen. McCain, who favors cap-and-trade, has not yet spoken directly to the coal issue, or for that matter to the various ways that coal and natural gas can be liquefied and turned into clean fuel. But this could be an important political point for McCain.

Economist Jerry Bowyer has circulated a map of U.S. coal deposits that shows a proliferation of coal in key swing states such as Kentucky, West Virginia, Ohio, and Pennsylvania. Much has been written about Hillary Clinton’s ability to attract white, culturally conservative, working-class voters who have massively rejected Barack Obama. Various polls strongly suggest that McCain can capture as much as 20 or even 25 percent of these votes and thereby defeat Obama in November. But the Appalachian coal people may have a hard time swallowing cap-and-trade, which in effect would cap coal, their jobs, and their livelihoods.

To be sure, Obama also favors cap-and-trade, so McCain could win the vote anyway on the cultural grounds of traditional family values, religious faith, pro-war patriotism, and pro-gun individualism. But unless Sen. McCain can address clean-coal development and somehow carve out allowances for it, he may have a much tougher time moving the carbon working class into his column this November.

For McCain, bad carbon economics could lead to even worse carbon politics.

— Larry Kudlow, NRO’s Economics Editor, is host of CNBC’s Kudlow & Company and author of the daily web blog, Kudlow’s Money Politic$.

National Review Online - Larry Kudlow on Cap-and-Trade and Coal on NRO Financial

Dankdude · #2 06-02-2008, 12:30 PM

Pam Martens: The Free Market Myth Dissolves into Chaos

HRC:Theory:The Myth of the 'Free Market'

Dankdude · #3 06-02-2008, 12:39 PM

http://www.la-articles.org.uk/FL-6-3-4.pdf

The Journal of the Libertarian Alliance

Vol. 6 : No. 3- Article 4 of 9

The Myth of the Free-Market Conservatives
by Matthew O'Keeffe

Sver since the timely demise of
Edward Heath as party leader,
members of the Conservative Party
have taken more and more to describing
themselves as 'free market' conservatives, all
the more so after Mrs Thatcher's victory in
1979. But while one cannot but applaud her
attempts to reduce the state sector, and such
policies as sale of council houses, some of
her other so-called 'market' achievements
remain more dubious. Of these, most notable
have been the removal of Trade Union
privileges, and the denationalisation of
certain state industries. The opposition, for
its part, has no qualms about denouncing
policies as 'free market'; but is the rhetoric of
either side really justified?
Of course the legal privileges and violent excesses
of the unions in the 1970s demanded
redress, but nothing in market theory
warranted the extent of the government's
subsequent policies. From the GCHQ
episode, to Mr Tebbit's plans to make the
unions democratic, to the question of the
closed shop, the attack on the unions has
been hysterical. A free market approach, by
contrast, would require, that Trade Unions be
free to constitute themselves as they wished,
'democratically' or un 'democratically'. It
would also require that employers be free to
hire exclusively unionised or non-unionised
labour, thus setting up a 'closed' or 'open'
shop as they saw fit. The policies which the
government chose, in the event, would be
better described as union-bashing than as
'free market'.
Ironically, there is another realm of
organised labour and restrictive practices
where the state has not even ventured. The
lawyers (with their many representatives on
the Conservative back benches) continue to
run the most rigidly state-enforced closed
shop there is. The logic of far too many selfstyled
'free marketeers' in the Tory Party
seems to be that the marketplace is fitting for
miners or dockworkers, but somehow a place
that does not become lawyers or doctors.

Only now is the government even daring to
consider deregulation of either law or
medicine. The professions as a whole remain
little more than middle-class trade unions
and have largely escaped the wrath of the
Thatcher administration.
And if one can doubt the reality of the
government's 'market' reforms in the realm of
organised labour, its policy with regard to
organised capital is also suspect. The
corporations remain as state-privileged as
ever the trade unions were. Corporations -
and in particular those corporations which
finance Conservative election expenses -
continue to enjoy special tax privileges,
limited liability, and even occasional
subsidies and protection from foreign competitors.
After a decade of market rhetoric,
denationalisation of the Bank of England,
removal of the privileges of the Central
Bankers, and any sort of return to free
banking all remain unthinkable. The
industries which have been denationalised
are hardly models of market theory (this is to
say nothing of the ridiculous and publiclyfunded
advertising extravaganzas that have
surrounded the sale of state industries);
neither Telecom nor Gas were deregulated or
sold in little pieces in accordance with the
dictates of perfect competition; instead both
were sold intact as giant monopolies, largely
to please the world of finance. The policy of
gigantism, in addition, has entailed a whole
plethora of New Dealesque regulatory
bodies.
Perhaps an inherently 'coalition' party like
the Conservatives cannot be expected to go
over to one ideology; perhaps the adoption of
more free market policies might nonetheless
be most effective for the goals which
conservatives pursue. Either way, there, are a
number of difficulties in the way of the
Conservatives if they do decide to become a
real free market party. Many of these come
from the preponderance of upper class and
upper middle class representation in their
ranks. Too many of the landowners in the
Cabinet are quite happy to see continued
farm subsidies, too many party members
have a vested interest in their particular
professions, and the Party as a whole relies
perhaps too heavily on corporate
sponsorship.

Meanwhile the government continues to
boast about how much it spends on the
welfare state, and state spending as a
proportion of GNP has fallen only slightly.
The free, market conservatives, if they exist,
will have to steer their party as surely away
from corporate capitalism as they have
steered it from state socialism.

Dankdude · #4 06-02-2008, 12:46 PM

YouTube - The Myth Of Free Markets - Corporate Lie Behind It (1/2)

YouTube - The Myth Of Free Markets - Corporate Lie Behind It (2/2)

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