The principle argument against cap and trade, legislation said to be designed to cut the production of green house gasses, is that it would have the effect of a huge tax increase on Americans. But that appears to be just the beginning.
The version of the Waxman-Markey “cap-and-trade” bill, appears to be a modern version of Smoot Hawley, according to an article on National Review Online by Cato Institute environmental policy experts Patrick J. Michaels & Sallie James.
“Not content to tempt political fate by imposing huge carbon taxes on the American middle class, Democrats have added a provision which imposes stiff tariffs on our trading partners if they don’t adopt aggressive carbon restrictions of their own.
“You heard correctly: progressives have authored a bill that earns the mortal enmity of domestic energy consumers and our most crucial trading partners at the same time. Economy-killing climate policies and a trade war – together at last!”
Cap and trade has already been roundly criticized for not really addressing global warming (which by evidence doesn’t exist), increasing the cost of energy produced in the United States, and killing off entire industries, starting with coal. But the idea that cap and trade has now been altered to, in effect, cause a trade war makes one think that people on Capitol Hill have gone completely and utterly mad.
Smoot Hawley, for those who are history impaired, was legislation passed at the beginning of the Great Depression that was designed to protect American industries and thus American jobs by imposing huge tariffs on foreign goods. What Smoot Hawley did was to start a trade war with foreign countries imposing retaliatory tariffs and making the Great Depression not only greater, but worldwide.
The situation is eerily familiar. Protectionist legislation is being proposed in the middle of an economic crisis that threatens to make the economic crisis worse. If one were cynical, one would suspect that the trade provisions of cap and trade were being inserted to buy the votes of Democrats in industrial states who have been complaining about foreign competition for decades.
Those who fail to learn from history are doomed to repeat it. Unfortunately those who have failed to learn are members of Congress and those who will suffer to repeat it are the American people who will suffer from the economic calamity to follow. That must be why the cap and trade bill, still half written by all accounts, is being rushed to the floor of the House to be voted on before too many people learn what is in it.
Source: Cap-and-Trade-War, Patrick J. Michaels & Sallie James, National Review Online, June 24th, 2009