Archive for January 31st, 2011

Blinder tries leading the blinder?

January 31, 2011

Economist Alan Blinder is trying to hoodwink the 112th Congress into a carbon tax.

In an op-ed in today’s Wall Street Journal, the former vice chairman of the Federal Reserve, Princeton University professor and Clinton administration economic advisor called the carbon tax a “miracle cure” for our ailing economy and federal budget problems.

Blinder said his carbon tax idea would:

  • Leave decision-making in private hands;
  • Create private sector jobs;
  • “Not cost taxpayers a dime”;
  • “Reduce the federal budget deficit significantly”;
  • Reduce our trade deficit;
  • Make our economy more efficient;
  • Ameliorate global warming; and
  • Show the world that America has not lost its edge.

Blinder’s formula would be an $8 per ton tax on carbon dioxide emissions starting in 2013, escalating to $25 per ton by 2015 and to $200 per ton by 2040. And although the tax would be enacted now, it would start and remain at zero for 2011 and 2012.

So how does such a tax “not cost taxpayers a dime”? Just because it stays at zero for its first two years? Just because the initial tax works out, as he claims, to about 8 cents per gallon of gas?

Given that we emit about 7 billion tons of CO2 per year, only an ivory tower academic would call a $56 billion tax (in the first year alone) a free lunch for the already-squeezed. By 2015, the tax would be $123 billion and by 2025 it would be $282 billion, according to Blinder. What part of this is less than a dime?

Blinder fantasizes that the carbon tax would spur the development of so-called “clean energy. As Blinder put it, “America’s entrepreneurs and corporate executives” would “start investing right away” in “carbon-saving devices and technologies.”

Of course, these people have been “investing” in these technologies for more than 30 years to no avail. And what they’ve really been doing is investing in lobbyists to successfully capture taxpayer subsidies. What ever happened to the Recovery Act spending on renewables and “green jobs”? Or was that just an $80 billion mulligan?

I like to think of an entrepreneur as someone who creates something out of nothing. But for decades now, Blinder’s “clean energy” entrepreneurs have been turning something into nothing — at great cost to taxpayers. Blinder was an advocate of Obama’s cash-for-clunkers program. Clean energy is the new clunker.

That Blinder knows little of what he speaks is well-illustrated by his claim that, “Everyone also knows that CO2 emissions are the major cause of global climate change.” He has apparently spent too much time hanging with Princeton climate alarmist Michael Oppenheimer, and not enough time reading the editorial pages of, say, Investor’s Business Daily and the Wall Street Journal, both of which have played a key role in exposing manmade catastrophic global warming for the hoax-cum-rentseeking-orgy to which it aspires.

The recipe for jobs, economic recovery and a balanced budget is simple:

  • Reduce taxes;
  • Eliminate regulatory overkill;
  • Shrink the size of government; and
  • Encourage individualism and self-reliance, and discourage dependence on government.

America’s real entrepreneurs will takeover from there.