National Energy Tax is Not Progress

It’s tough being a Republican these days in the face of criticism from the left while standing strong on our principles, especially economic ones. It shows that we are still relevant and our voice is loud, despite claims we are the party of “no” in our predictions that Obama policy is bad for America.

House Speaker Nancy Pelosi recently implied that Republicans are “Chicken Littles.” But, instead of bemoaning that the sky is falling, Republicans are merely reporting and forecasting an economy spiraling downward because of super-sized stimulus spending, the omen of ObamaCare on the legislative horizon, and more recently, the Cap-and-Trade catastrophe.

It’s only natural for Republicans to oppose legislation that attacks the vitality of free markets and competition. Cap-and-Trade is a threat to our liberty and freedom. Also known as the Markey-Waxman American Clean Energy and Security Act of 2009, the legislation is a tax, or tariff, on energy that will impede both the production and the consumption of goods and services. Because this tax on energy affects every American, it makes sense to call it the National Energy Tax.

The Unseen Hand of Free Markets

Republicans take a lot of heat from Democrats when they claim we are the party that offers no useful alternatives or solutions. It turns out that inaction is sometimes the best course of action. There is a dynamic, vibrant worldwide economy at work 24 hours a day that can work well enough on its own without government intervention.

Without all the meddling, free markets are inherently efficient in the way they couple buyers with sellers. If consumers need a product or service, the market answers that need. Individuals, acting in their own self-interests, are seemingly guided by an “Unseen Hand” — a concept first explained in 1776 by economist Adam Smith in The Wealth of Nations. You can measure real progress by the success of our business leaders in the real world of capitalism.

On the surface, the Democrats’ National Energy Tax would seem to save the planet with a self-imposed reduction of carbon dioxide emissions in the U.S., although even some environmentalists are opposed to the bill. Critics don’t like it because of taxpayer money flowing to firms with dubious ties to the Obama administration, namely General Electric. It’s the same GE that has a close business relationship with Iran, and the same GE that owns NBC, the TV network leading the cheer for Obama. GE’s plummeting stock price shows that its sheer survival hinges upon renewable energy.

To pay for the massive expenditures, the tax will necessarily drive up the market price of all forms of energy for Americans. The cascading effect of increased petroleum prices will, in turn, drive up transportation costs. In 2008, then-Senator Obama admitted that the plan will cause utility costs to “necessarily skyrocket.” Prices will escalate across the board on everything from consumer goods to business services. Aggressive taxation is the only way Obama’s plan could ever dig America out of the deep hole of trillion-dollar debts and attempt to finance the fantasy of government-run healthcare.

While initial tax revenues could be impressive as Americans suffering from sticker shock suck it up at the cash register, Obama’s plan might even see limited success in the short-run. However, the long-term strategy to resuscitate the economy is dead on arrival. When companies face a hostile business climate of oppressive taxes and tariffs, they sidestep the legislation by moving production offshore.

Waving the White Flag

China and India’s lenient environmental laws will help to propel their economies, giving them a huge comparative advantage over the U.S. in producing the same goods. A National Energy Tax concedes victory to these emerging, modernized economies, as they steamroll American business still encumbered by environmental laws and labor unions. As our economy continues to deflate, stifling legislation binds the previously unfettered free markets that made the U.S. the economic powerhouse of the world. In the name of global warming and even national security, do we really want to step back in time 150 years to the butter churn, washboard, and cotton gin? Progressives, how can you call this progress?

The rare exception where high taxes could possibly work is with infant industries, such as renewable energy, which would certainly benefit from a National Energy Tax. Diverting tax revenues to infant industries allows for the offset of steep initial start-up costs — costs that an otherwise sane capitalist would never dare to bear unless market forces truly made such an endeavor realistic and profitable. The National Energy Tax, however, is an artificial way of recreating an environment suitable to firms with questionable ties to the Obama administration. It’s a costly experiment with no guarantee of long-term success.

How would we measure the plan’s success? Do we measure the profits from renewable energy that come at the expense of other established industries? Do we measure CO2 output? How do we respond with increasing pollution from China and India caused by cheaper, abundant fossil fuels?

A National Energy Tax shuts the door on innovation possibilities of 70 MPG or higher mileage petroleum-powered vehicles. If the Senate passes and the President signs off, National Energy Tax legislation, would not only reduce output, it would reduce consumption, which means less need for businesses to keep employees. Some estimate the jobs lost would far outweigh jobs created.

Cloudy Visions of Progress

Forty-four Democrats did the right thing in opposing the National Energy Tax bill. Of course, their defection might have been a cold, calculated ploy for Democrats in anticipated close district races to sell-out in order to appear more moderate, gaining more favor from Independent voters. We may never know till Election Day. There is a place for moderate and conservative Democrats in politics, but you have to look hard to find them. The system of checks and balances keeps us Republicans honest, but the current imbalance of Democrats to Republicans in both the House and the Senate allows a landslide of leftist legislation.

Individuals’ motivation and desire for success withers to mediocrity and regress under the kind of progressivism that is mass-marketed today through teleprompter speeches written by committee, based on polling research and Saul Alinsky socialist doctrine. These days, the keyword is “progressive.” It conjures up billowing, smoky visions of modern, growing, enlightened advancement. It just sounds better than “liberal,” which has picked up some negative connotations over the years. Whatever the name, a National Energy Tax is more liberal doctrine, and that’s not progress.