Oh Lookie, Cap and Trade Is Back!

Look what's being resurrected from the dead, thanks to the Gulf oil spill debacle: Crap and Trap, aka Cap and Trade. Even Al Gore is back in the spotlight!

Have you seen the movie "Groundhog Day"?

Senators Lieberman and Kerry excoriate us the non-believers in Crap and Trap that if we are unwilling to shell out less than a dollar a day every single day for the rest of our lives to save the planet (and developing nations in particular) from the good old man-made global warming, we are bad, we are selfish, we are demagogues. Probably we are terrorists, too, in their eyes, if we dare insist on using oil and gas.

The "less than a dollar a day" figure comes from the EPA, an executive-branch agency (i.e. Obama's tool). That's on top of the added tax per family of over $2000 per year (calculated by none other than the Obama administration).

This is right back to one year ago, when Obama and his underlings kept pushing for agenda after agenda after agenda. No wonder the stock market is rising again, just like last year. It will keep rising for another 12 months, for sure. It was exactly one year ago that the House passed the climate bill.

(Here's the link to this blog's June 2009 archive. There I was, blogging about carbon emission allowance as new bubble. Just look through the headlines. Hardly anything has changed. Cap and trade, financial reform bill, fear of hyperinflation, ECB pouring $600 billion to prop up money market funds... This is indeed "Groundhog Day"...)

Just like Goldman Sachs gives thumbs up for the financial "reform" bill, the cap and trade climate bill is supported by three oil majors. That alone would tell you that they are the ones who will profit handsomely at the expense of, as usual, taxpayers. And also remember the nice joint venture by Goldman Sachs and Al Gore on carbon trading exchange.

There is a name for the type of government run by technocrats in bed with large corporate interests. It starts with "f".

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GAO's Sting Operation Against EPA and DOE "Energy Star" Program

ROTFLOL, LOL, LOL...

I did, for the first time in a long time. This is from Lewrockwell.com, and the article was taken from CNS News:

Obama’s EPA Gave Energy Star Certification to ‘Gas-Powered Clock Radio’ and 14 Other Phony Products, GAO Says (Matt Cover, 4/30/2010 CNS News)

"The Environmental Protection Agency certified that a “gas-powered clock radio” was an energy-efficient product under the government’s Energy Star program, despite the fact that neither the clock nor its manufacturer ever existed.

"The clock and 14 other phony products were part of an investigation into the Energy Star program conducted by the Government Accountability Office, which submitted 20 fraudulent Energy Star applications from four fake companies. The EPA evaluated 16 of those products while the Department of Energy (DOE) evaluated four.

"Fifteen of the phony products – including the gas-powered alarm clock – and all four of the fake companies were certified by EPA/DOE under the Energy Star program.

"GAO conducted the investigation between June 2009 to March 2010, setting up fake Web sites and using rented post office boxes and cell phones to make it look like its fake companies were real. (See fake companies’ Web sites: Cool Rapport, Futurizon Solar Innovations, Spartan Digital Electronics, and Tropical Thunder.)" [The article continues.]


I just had to find the gas-powered clock radio. So I visited all of the fake sites, checking out tongue-in-cheek product descriptions and corporate philosophies. Cool Rapport has a catchy message: "Welcome to Cool Rapport online - relax, put your feet up and stay a while". Futurizon Solar Innovation has a picture of daffodils for its geothermal heat pumps that are "cut above the rest". They seem to have made a liberal use of photos from residential real estate listings (particularly Tropical Thunder).

I finally found the clock at Spartan Digital Electronics.

Here's how the company describes the product:

Gas-Powered Alarm Clock
Spartan Digital Electronics is proud to announce its latest line of home electronics. The gas-powered Black-Gold model clock radio is sleek, durable, easy on your electric bill and surprisingly quiet. The newly Energy Star-qualified product is safe for indoor use and easy on the environment. This product approximates the size of a small portable generator for increased ease while traveling.

Hahahahaha I love this. And EPA/DOE issued Energy Star certification. (Here's the full report from GAO.) I highly approve of such sting operations. GAO's conclusion: "Energy Star is for the most part a self-certification program vulnerable to fraud and abuse." What a surprise. Now we know what travesty this government certification process is. Wait till all these "eco" "green" "clean energy" certifications get unleashed on us if the cap and crap bill passes the Senate.

I love to have the GAO do the full audit of the Federal Reserve, too.

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What's in Store for the Rest of Us after Health Care "Reform"

It just makes me sick to the stomach to see the stock market keeps going up after the passage of the health care insurance "reform" bill whose various programs will be paid for by reduced Medicare benefits, a whole bunch of new taxes for individuals and businesses on anything from tanning to prescription drugs to medical devices, and insurance premiums which are set to drastically increase (I've already seen the numbers like 40 to 50% increase). National ID cards, vastly expanded IRS power, national computerized database for everything about you including financial information (part of that was passed in the stimulus bill of February 2009, by the way), and who knows what else. They may have revived the "Q-tip tax".

All for covering, supposedly, uninsured Americans, though the number I've heard varies from 40-plus million to mere 8 million. In other words, no one knows for sure. But the government wants to extract $1 trillion from the economy anyway - that's over $3000 for every single American.

This particular government appears hell-bent to extinguish any feeble attempt by what remains of a free market economy to recover. Now that they dump this health care "reform" on the back of the productive segment of the economy, they are eyeing to cause further damage by passing the climate bill to fight the so-called "global warming" which may or may not be happening and which may not be anthropogenic at all.

As this blog reported in the past, the additional tax burden on an average family with the climate bill alone would amount to $1761, by the administration's own admission. (GOP puts the number much higher at $3000.)

CNN's latest poll shows Obama's approval rate hit the lowest. 46% approve his job performance, while 51% disapprove. But that's not all. On health care policy, 58% disapprove, and on federal deficit, 62% disapprove, according to the same CNN poll.

Alas, poll numbers mean nothing to the administration or Congress. They just keep on doing what they've been doing - to inflict pain and suffering.

After the climate bill, it will be immigration, then financial so-called "reform" which would put the Federal Reserve in charge of "protecting" the consumers (fox in a hen house is an understatement). Ducks are lining up.

Nullification, anyone?

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Climategate: Gore Falsifies the Record

or he misspoke. (Ooo I hate that word.)

This from Andrew Bolt of Australia's Herald Sun, regarding Slate magazine's Q&A with Al Gore over global warming, those pesky leaked emails, and his new book (what a surprise). Andrew Bolt has other excellent posts on global warming and the "Climategate".

(Remember that Australia's Senate voted down the government's bill on carbon trading recently, partly thanks to the "Climategate" emails.)

Climategate: Gore falsifies the record (12/9/09, Herald Sun, Australia)
[emphasis is original]

"Al Gore has studied the Climategate emails with his typically rigorous eye and dismissed them as mere piffle:

Q: How damaging to your argument was the disclosure of e-mails from the Climate Research Unit at East Anglia University?

A: To paraphrase Shakespeare, it’s sound and fury signifying nothing. I haven’t read all the e-mails, but the most recent one is more than 10 years old. These private exchanges between these scientists do not in any way cause any question about the scientific consensus.

" And in case you think that was a mere slip of the tongue:

Q: There is a sense in these e-mails, though, that data was hidden and hoarded, which is the opposite of the case you make [in your book] about having an open and fair debate.

A: I think it’s been taken wildly out of context. The discussion you’re referring to was about two papers that two of these scientists felt shouldn’t be accepted as part of the IPCC report. Both of them, in fact, were included, referenced, and discussed. So an e-mail exchange more than 10 years ago including somebody’s opinion that a particular study isn’t any good is one thing, but the fact that the study ended up being included and discussed anyway is a more powerful comment on what the result of the scientific process really is.

"In fact, thrice denied:

These people are examining what they can or should do to deal with the P.R.
dimensions of this, but where the scientific consensus is concerned, it’s completely unchanged. What we’re seeing is a set of changes worldwide that just make this discussion over 10-year-old e-mails kind of silly.

"In fact, as Watts Up With That shows, one Climategate email was from just two months ago. The most recent was sent on November 12 - just a month ago. The emails which have Tom Wigley seeming (to me) to choke on the deceit are all from this year. Phil Jones’ infamous email urging other Climategate scientists to delete emails is from last year.

"How closely did Gore read these emails? Did he actually read any at all? Was he lying or just terribly mistaken? What else has he got wrong?"


It's Newspeak, Mr. Bolt. "One month ago" means "10-years ago", and "two months ago" means "more than 10 years ago", by imperious Al Gore's decree. Well, Mr. Gore has a lot depending on the global consensus on global warming and implementation of cap and trade globally.

What I want to ask in addition is this: Since when is the validity of science determined by consensus?

If the age of the planet earth had been determined by the consensus, it would have stayed at 100 million years, the number mathematically derived by the very influential and brilliant physicist (Lord Kelvin). For the next three decades, it stayed that way during which scientists tried their best to come up with the evidence that would justify Lord Kelvin's conclusion. Sounds familiar, doesn't it?

This brilliant conclusion about the age of the planet, agreed upon by most scientists, was rudely overturned by empirical evidence: Discovery of radioactivity that threw a monkey wrench into Lord Kelvin's meticulous calculation on thermodynamics. (For more, please read the article by David Deming, titled "Global Warming and the Age of the Earth: A Lesson on the Nature of Scientific Knowledge", 12/3/09 Lewrockwell.com)

But the age of the planet didn't affect nation's GDP or welfare of the nation's inhabitants the way this idea of global warming is going to affect.

Mr. Gore, himself a non-scientist, seems to have decided science should be run like politics - compromise, consensus, arm-twisting, silencing the opponent, outspending the opponent to win the race. And partly thanks to people like Mr. Gore, science, particularly climate science, has become exactly that: a branch of politics.

Another thing I want to ask is about Slate: Were they also unaware that the emails were as recent as a month ago? Or are they taking part in perpetuating this new myth created by Al Gore that those emails were "more than 10 years ago"?

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Carbon Emissions Fall By Steepest in 40 Years

said Reuters, although hardly anyone seems to have paid attention.

Carbon emissions fall by steepest in 40 years (9/21/09 Reuters)

Despite the cold wave sweeping through the country, people pushing the climate change legislation (domestic and international) are upbeat as ever. Cold weather, hot weather, as long as it is "extreme", they can call it "the result of global warming".

Former Vice President Al Gore, who is set to profit tremendously from so-called green business once the climate bill passes, is naturally the lead proponent for the cap and trade that would potentially raise the income tax for most Americans by 15%. His Generation Investment Management, nicknamed "blood and gore", and co-founded by ex-Treasury Secretary Hank Paulson, owns 10% of Chicago Climate Exchange.

But did you know that the carbon emission in the U.S. dropped 9% in the past two years and is set to drop even further (6% drop)? You don't hear about it much, do you?

What did it? Recession.

Proponents for the climate legislation want to attribute the decline to the clean energy initiatives (see the Washington Post article from September 20, 2009). I am sure solar, wind, and other forms of alternative energy generation must have helped, but the main reason is global recession that has caused the global tumbling of factory output, as Reuters put it.

If the Senate passes its climate bill and this cap and trade tax is forced on the populace, the carbon emission is set to decrease for a foreseeable future. Not because of cap and trade, but because of prolonged recession/depression thanks to the added tax burden on productive citizens and private businesses. Unless those businesses of course are Mr. Gore's companies.

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Cap and Trade = 15% Income Tax Hike

so says the Obama administration, it turns out.

Remember Cap and Trade? The House passed this controversial climate change bill H.R. 2454 (what isn't controversial these days?) back in June, with an extremely close vote (219-212).

Declan McCullagh of CBS News, who has recently written probing articles on health care "reform" and cyberspace regulation, reports that Cap and Trade would cost families $1761 a year, equivalent of 15% increase in personal income tax.

The information comes from the previously undisclosed documents by the Obama administration and Treasury, which were obtained under the Freedom of Information Act by the Competitive Enterprise Institute and released on Tuesday, according to McCullagh.

Obama Admin: Cap And Trade Could Cost Families $1,761 A Year
(Declan McCullagh, 9/15/09 CBS News)

"The Obama administration has privately concluded that a cap and trade law would cost American taxpayers up to $200 billion a year, the equivalent of hiking personal income taxes by about 15 percent.

"A previously unreleased analysis prepared by the U.S. Department of Treasury says the total in new taxes would be between $100 billion to $200 billion a year. At the upper end of the administration's estimate, the cost per American household would be an extra $1,761 a year.

"A second memorandum, which was prepared for Obama's transition team after the November election, says this about climate change policies: "Economic costs will likely be on the order of 1 percent of GDP, making them equal in scale to all existing environmental regulation." "

The article has a link to the documents obtained under FOIA, which I link here also.

GOP's estimate is about $3100 per family a year, or $366 billion a year. Democrats' number is $800 per family, or less than $100 billion a year. The Heritage Foundation says it will be $1500 per family a year by 2035.

Considering the government's track record in containing costs, we could safely jettison the lowest estimate.

""Heritage is saying publicly what the administration is saying to itself privately," says Christopher Horner, a senior fellow at the Competitive Enterprise Institute who filed the FOIA request. "It's nice to see they're not spinning each other behind closed doors."

""They're not telling you the cost -- they're not telling you the benefit," says Horner, who wrote the Politically Incorrect Guide to Global Warming. "If they don't tell you the cost, and they don't tell you the benefit, what are they telling you? They're just talking about global salvation.""

Wealth distribution within the U.S., and from the U.S. to the rest of the world, particularly poorer countries. But the one who is set to gain most is the government: 15% more tax revenue, not from the polluting industries who will get numerous subsidies, but from the consumers, rich and not so rich alike.

"Because personal income tax revenues bring in around $1.37 trillion a year, a $200 billion additional tax would be the equivalent of a 15 percent increase a year. A $100 billion additional tax would represent a 7 or 8 percent increase a year."

(But watch out, opponents of cap and trade, health care, or anything that's been proposed. According to the former president Jimmy Carter and numerous other pundits (the article linked was written by a neo-conservative), it seems you are racist and you don't even know it if you dare oppose President Obama's policies. To me as a non-native here, it is totally incomprehensible, though I've been trying to understand the rationale.)

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Fact-Finding Mission by Congress Looks Real Good

Lawmakers' Global-Warming Trip Hit Tourist Hot Spots (8/8/09 Wall Street Journal)

"WASHINGTON -- When 10 members of Congress wanted to study climate change, they did more than just dip their toes into the subject: They went diving and snorkeling at the Great Barrier Reef. They also rode a cable car through the Australian rain forest, visited a penguin rookery and flew to the South Pole.

"The 11-day trip -- with six spouses traveling along as well -- took place over New Year's 2008. Details are only now coming to light as part of a Wall Street Journal analysis piecing together the specifics of the excursion.

"The South Pole trip, led by Rep. Brian Baird (D., Wash.), ranks among the priciest. The lawmakers reported a cost to taxpayers of $103,000.

"That figure, however, doesn't include the actual flying, because the trip used the Air Force planes, not commercial carriers. Flight costs would lift the total tab to more than $500,000, based on Defense Department figures for aircraft per-hour operating costs."

Here's what the itinerary for the trip included, according to Wall Street Journal:

• Touchdown in Christchurch, New Zealand, a few hours before the sunset on New Year's Eve. Enjoy the firework.
• Prepare for the trip to South Pole. Free clothing provided for extreme cold weather.
• Tour the Antarctica. Meet penguins. Sorry no spouses.
• Australia. Diving in the Great Barrier Reef.
• Layover in Hawaii, relax at Royal Hawaiian Hotel before flying back home.

I hate to think what kind of rigorous fact-finding missions there are for the health care "reform". (Touring France in early fall sounds very rigorous to me.)

But hey, this is nothing. Only half a million for 10 members of Congress for 11 days. Less than $5000 a day per member. The prez himself may have blown a quarter million on a night out (a few hours) with his wife, while General Motors was preparing for bankruptcy.

The U.S. voters have only themselves to blame for electing them.

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New Bubble Machine - Carbon Emission Allowance

Congressional Budget Office (CBO), in its analysis of the climate bill titled "The Estimated Costs to Households From the Cap-and-Trade Provisions of H.R. 2454" says the following about the emission allowance under the Cap and Trade provision of the bill:

"CBO estimates that the price of an allowance, which would permit one ton of GHG emissions measured in CO2 equivalents, in 2020 would be $28.2. H.R. 2454 would require the federal government to sell a portion of the allowances and distribute the remainder to specified entities at no cost. The portions of allowances that were sold and distributed for free would vary from year to year. This analysis focuses on the year 2020, when 17 percent of the allowances would be sold by the government and the remaining 83 percent would be given away. Entities that received allowances could sell them or use them to meet their compliance obligations."

One of the big problems (there are many) with the Cap and Trade way of reducing the pollution (whether it's sulphur dioxide or nitrogen oxide or carbon dioxide) is how the initial allowance is priced and allocated. Initial allowance will be arbitrarily set by the government, both allowance amount and price. And when the allowance is not auctioned off entirely but is given away free to certain companies/industries as seen appropriate by the government, the entire process is screaming "manipulation", "corruption", "collusion".

So, entities that received free allowances from the government could sell them for profit if they don't need them. Get them for free, sell them for some price: infinite return on the money. Or they can choose to keep them, waiting for future price appreciation as the emission limit gets lower and lower. Some entities may get 4 free allowances for 1 paid allowance, others may get 2 free for 1 paid, yet others may get 10 free for 1 paid. Who knows? No one knows.

Is it just me, or do you also see a dot-com bubble era practice of investment banks giving pre-IPO shares to certain people at a low price so that these people can turn around and sell after IPO for filthy profits?

Now comes valuable middlemen (like Goldman Sachs) who will offer to manage the allowances. I can envision a whole set of derivatives coming out of this allowances business. Futures market, options on the futures to start. Then, to smooth out the allowance cost over the years and hedge against allowance price fluctuation, they will develop an allowance swap, much like interest rate swap. Since the number of allowances are set to decrease over the years, the price of allowances is assumed to be increasing all the time. So what better product, if they can package it right, to sell to pension funds and college endowments who want to hold long positions only (like they did during the oil bubble in 2008)?

Just like CDS, at some point there will be buyers and sellers of derivatives on allowances without underlying commodity (in this case, source of pollution), even if there is no intrinsic value to the allowance other than what the government mandates. (U.S. dollar bill does not have intrinsic value either, other than as a piece of paper and the word from the Federal Reserve "Trust us".)

No wonder big businesses support this bill. If E.U.'s experience is any indication, the carbon emission will not decrease because of the cap and trade (in E.U.'s case, it decreased by 3% but not due to the cap and trade; it is due to the recession), but the taxpayers will be presented with increased energy bills and attendant price increase on just about every product with no appreciable benefit.

This is the new bubble that the government wants to blow. It is set to feed on the money of people who have hardly any say in the matter: the taxpayers money. So the bubble will keep on blowing at the expense of the taxpayers until they realize they've been had.

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300 Pages of Climate Bill (H.R. 2454) That Were Missing

Has anyone read it (other than Mr. Boehner who read it on the House floor)? For that matter, has anyone at all read the entire bill?

Here's the PDF file of what was missing.

I watched the youtube video linked above of House Minority Leader reading the bill while following the pages on the PDF file.

• Definition of biomass
• Renewable energy usage percentage mandate for federal agencies
• High-efficiency gas turbine research and development
• New housing standards (based on California's)
• Energy rating for houses (that sounds like a death knell to the existing house market)

That's up to about page 46. It seems like the federal government is going to dictate everything from housing standard to building permit price.

California housing standards that Mr. Boehner is referring to is 2008 Building Energy Efficiency Standards for Residential and Nonresidential Buildings, a.k.a. Title 24. It looks monstrous, unless you revel in a bureaucratic maze and/or you are on the receiving end of increased fees for the various permits.

It seems we have a new bubble. Instead of resulting in asset price inflation like the previous bubbles did, this one may collapse everything else but itself. The bubble that's taking shape is a government bubble, which will grow and grow at the expense of everything else.

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Q&A about Climate Bill, a la Associated Press

A news article from AP, or so I think, but the entire article could have been simply lifted from the PR literature published by the Democratic supporters of the climate bill (H.R. 2454) that passed the House today.

Questions and answers about the US climate bill (6/26/09 AP via Yahoo Finance) written by Dina Cappiello and Eric Carvin

You can read the article by following the above link. I particularly like the last Q&A that these writers created:

Q: Why is it so important to tackle global warming anyway?

A: Left untended, scientists say, global warming will cause sea levels to rise, increase storms and worsen air pollution. For these reasons, the Environmental Protection Agency recently concluded that six greenhouse gases pose dangers to human health and welfare. And politically, without U.S. action, developing countries like China probably will not agree to mandatory pollution limits.

Not all "scientists" say that, and certainly not all of them link all of global warming to human causes. China probably will not agree, without U.S. action? My humble guess is that China probably will not agree, with or without U.S. action. (Not only that, they will probably stop buying U.S. Treasuries to punish the U.S. for trying to impose limits on them.)

I love their very descriptive consequences of global warming: sea will rise, more storms will hit us... Sky will fall, stars will go dim, mountains will crumble, cow will jump over the moon, and little dog will laugh to see such sight..

In the meantime, we'd better hope it is indeed global warming, not global cooling, as some scientists do think (see my post from 6/23/09).

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Cap And Trade Is On - HR 2454 Passed The House

American Clean Energy and Security Act of 2009 (H.R. 2454) has passed the House, 219 - 212, closer than the trial vote but passed nonetheless. Now it goes to the Senate.

• Democrats: Yes 211, No 44, NV 1
• Republicans: Yes 8, No 168, NV 2

So now, the bill that hardly anyone in the House of Representatives read, with 300 pages missing ("but always available on the Internet" or the "cloak room" of the House), is going to dictate the energy policy of the world.

8 Republicans who voted Yes:

• Bono Mack (CA)
• Castle (DE)
• Kirk (IL)
• Lance (NJ)
• LoBiondo (NJ)
• McHugh (NY)
• Reichert (WA)
• Smith (NJ)

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"Official" Copy Of Climate Bill Missing 300 Pages

I was just watching c-span coverage of the House floor debate. It's hilarious. And they are going to vote for this bill?

You can watch it yourself at: http://www.cspan.org/Watch/C-SPAN_wm.aspx

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