Barrel Strength

There are two articles of interest floating about the blogosphere this weekend and I want to bring them to your attention. First is the suppression of scientific evidence by the Environmental protection Agency. Second is the absolute swindle encompassed by cap and trade. The two are part of a vast conspiracy to loot the poor (everyone below a billion dollars of personal wealth) for the benefit of a few of the really rich. I wanted to say “left-wing” conspiracy but I am not sure that looting the treasury and social wealth on such a scale can be left wing or right wing; it transcends such ideas.

First: create the hysteria for which your legislation is the solution. Carbon dioxide, the natural process of all combustion, is named as a pollutant, despite its fundamental role as the life-giver to lamnts.

Second: create a market which appears to reduce CO2 emissions while actually filling the pockets of the very very rich with the revenues from carbon-dixide licences (caps) which are “traded”. How do you do this? Reduce the amnunt of caps by law.

First: bad science

 You will have read about this elsewhere in an article by Declan McCullough, about the suppressed report on carbon dioxide. The report says, in its executive summary, about the science of global warming:

•  that the US is acting principally on the IPCC report of three years ago;

that, since that time, and in contrast to what the IPCC predicted:

• global temperatures have been in decline while CO2 emissions have increased;
• Atlantic hurricanes are not increasing in severity
• Greenland ice is not diminishing
• the recession has greatly reduced greenhouse gas emissions below IPCC estimates
• that solar data (how much the earth is warmed by the sun) was downplayed in the IPCC report, contrary to evidence.

You can read the rest of the report for yourselves. Evidence ignored. Evidence suppressed. Bad science driving out good science.

I quote the McCullough article here:

The EPA official, Al McGartland, said in an e-mail message (PDF) to a staff researcher on March 17: “The administrator and the administration has decided to move forward…and your comments do not help the legal or policy case for this decision.”

The e-mail correspondence raises questions about political interference in what was supposed to be an independent review process inside a federal agency–and echoes criticisms of the EPA under the Bush administration, which was accused of suppressing a pro-climate change document.

Second: the scam

The next piece of the picture is supplied by a recent article by Matt Taibbi on the investment firm Goldman-Sachs, which is found in Rolling Stone magazine.

The article illuminates the role of Goldman Sachs in the creation of a number of bubbles, from which they have profited immensely. I recommend you read the entire article to appreciate the scale of the rip-off. This is a condemnation which could have been written by a person from any point on the political spectrum, because it is not anti-market; it is against the rigging of markets so that risk has nothing to do with it. Risk is for you small people. Risk at the level at which Goldman-Sachs is playing is of a paltry fine of $20 million when you have raked in $20 billion. I wondered whether it was going to be an anti-semitic diatribe but, rest assured, it is a diatribe against “malefactors of great wealth”, to quote Franklin Roosevelt. We live in a casino economy and Goldman-Sachs, says Taibbi, are the the casino owners.

How do you rig the carbon dioxide emissions market? Quite simple actually. You make sure that the carbon credits continually diminish. That is, as time goes on, the value of the right to produce carbon dixide must of necessity go up as the number of such credits goes down. The artificial scarcity is produced by the law. So the carbon credit price is a kind of tax on the production of carbon dioxide, the inevitable result of all combustive processes. But who gets the revenues produced by the tax?

Ah! Not the state. Not the federal treasury. No, no, no. The holders of carbon credits gets the revenue from the “tax” on carbon. Who holds the credits? Goldman Sachs and firms associated with or owned by it.

Let Taibbi speak to this:

“Cap-and-trade, as envisioned by Goldman, is really just a carbon tax structured so that private interests collect the revenues. In stead of simply imposing a fixed government levy on carbon pollution and forcing unclean energy producers to pay for the mess they make, cap-and-trade will allow a small tribe of greedy-as-hell Wall Street swine to turn another commodities market into a private tax-collection scheme.”

You do not have to believe all of Taibbi’s article on Goldman’s supposed role in rigging market after market. A commenter in the Atlantic magazine certainly does not. But on the plain facts of how a market will work, reducing the supply by law will create a scarcity, and ensurng the revenues accruing from that scarcity are captured by something else than the federal treasury is very bad policy indeed.

It reminds me of the tax-farmers of pre-Revolutionary France. The French monarchy contracted out the collection of taxes to those to whom it owed the most debts. The debt-holders organized themselves into Fermiers-General and became the collectors of revenue for the French state. They conducted tax-collection with honesty and efficiency, turning over to the State the agreed amounts and keeping the rest. They were guillotined at the time of the Revolution,including the famous French chemist, Lavoisier.

After reading Taibbi’s article one cannot help wonder whether we are approaching a pre-revolutionary situation – in say, twenty years, if this kind of organized looting of people’s wealth continues. This carbon-taxing folly is nothing but the looting of the public wealth under the cover of bogus science and doomist ideology, supported by al the usual useful idiots of the respectable press.