Tuesday, December 08, 2009

The EPA throws a wrench into the economy

Just when conservatives were hoping that they'd dodged a bullet on cap and trade because the Senate wasn't going to seriously take up the bill next year and they have hopes that Republicans will make some gains in the 2010 elections and be able to block such a bill after the new Congress got sworn in, now the EPA comes around to unilaterally assert its right to regulate carbon. Just imagine what such regulation of all industry will do to the economy. As James Pethokoukis argues today, it's as if the EPA told the American economy to just drop dead. We're in for a time of more uncertainty for American business as such EPA regulations are adjudicated through the courts.
But now it’s conceivable carbon restrictions would be implemented as early as next year – even though the EPA itself admits its efforts would be more disruptive and less efficient than congressional action. Such an optimistic timetable assumes no legal challenges. But there will be plenty of those. Already, business groups are preparing to file suit against the EPA. It could fall to U.S. courts to determine the future of the nation’s approach to climate policy. This is a nightmare scenario for the private sector when it comes to planning for new expansion or hiring. Note that the big problem with the job market at the moment is not so much job losses and zippo new jobs being created. It will take a year of 4 percent growth adding 250,000 jobs a month to lower the unemployment rate to 9 percent.

Of course, about the only thing worse than regulatory uncertainty would be for the EPA to follow through with its top-down, command-and-control approach to dealing with perceived climate change.
This is the Obama administration's method of blackmailing Congress into passing cap and trade under the theory that such a law would be less bad than letting the EPA regulate every aspect of the economy through their regulation of carbon.
ith cap and trade blown apart in the Senate, the White House has chosen to impose taxes and regulation across the entire economy under clean-air laws that were written decades ago and were never meant to apply to carbon. With this doomsday machine activated, Mr. Obama hopes to accomplish what persuasion and debate among his own party manifestly cannot.

This reckless "endangerment finding" is a political ultimatum: The many Democrats wary of levelling huge new costs on their constituents must surrender, or else the EPA's carbon police will inflict even worse consequences.

The gambit is also meant to coerce businesses, on the theory that they'll beg for cap and trade once the command-and-control regulatory pain grows too acute—not to mention the extra bribes in the form of valuable carbon permits that Democrats, since you ask, are happy to dispense. Ms. Jackson appealed to "the science" and waved off any political implications, yet the formal finding was not coincidentally announced at the start of the U.N.'s Copenhagen climate conference
The Democrats have said that they're going to be all about jobs, jobs, jobs in 2010. Throwing this wrench into the economy isn't going to help them.

But I bet Thomas Friedman is happy. Here's the sort of action that he was yearning for when he deplored our messy democratic system that couldn't accomplish anything as swiftly as that clean Chinese autocracy can do with its top-down orders for the rest of the country. Now we have the EPA substituting itself for that messy lawmaking that goes on in Congress.