“Until last week, Richard Nixon was responsible for the two worst-conceived American energy policies. On June 1, Donald Trump’s announcement of U.S. withdrawal from the Paris Climate Accords displaced all competitors as the worst presidential initiative on energy in our nation’s history.”
– Hakes, “Quitting the Paris Climate Pact in Historical Perspective” (June 6, 2017)
“Historian Hakes got it exactly backwards. President Nixon violated economic law by imposing federal pricing on energy; President Trump removed an impetus to federal pricing for carbon-dioxide (CO2). Only if Trump had stayed in Paris would the Nixon analogy come into play.”
His bio line at Real Clear Energy reads: Jay Hakes is an energy historian who has worked for three presidents on energy issues. Experience aside, Mr. Hakes made just about the worst analogy possible regarding Donald Trump’s courageous decision to withdraw the United States from the redistributionist, toothless, ill-conceived Paris climate agreement.
In “Quitting the Paris Climate Pact in Historical Perspective” (June 6, 2017), Hakes makes the analogy:
Until last week, Richard Nixon was responsible for the two worst-conceived American energy policies. On June 1, Donald Trump’s announcement of U.S. withdrawal from the Paris Climate Accords displaced all competitors as the worst presidential initiative on energy in our nation’s history.
Nixon, in August of 1971, imposed wage and price controls on the American economy, including energy. Later, in November of 1973, he embraced mandatory federal allocation of energy supplies during emergencies. The controls on the broader economy did not survive his administration, but the energy part of them – popular with Democratic majorities in Congress and not fully repealed until 1981 – proved more durable and contributed heavily to the energy woes of the 1970s…. [T]he Trump decision is likely to look even worse in historical hindsight than it does today.
Historian Hakes got it exactly backwards. President Nixon violated economic law by imposing federal pricing on energy; President Trump removed an impetus to federal pricing for carbon-dioxide (CO2). Only if Trump had stayed in Paris would the Nixon analogy come into play.
Moreover, Hakes does not even consider that Paris was/is not a cure for anything climate. As the father of the climate alarmism, James Hansen, said:
[The Paris agreement] is a fraud really, a fake. It’s just bullshit for them to say: ‘We’ll have a 2C warming target and then try to do a little better every five years.’ It’s just worthless words. There is no action, just promises. As long as fossil fuels appear to be the cheapest fuels out there, they will be continued to be burned.
Hakes missed something else ironic about Nixon energy policy and Trump energy policy. It is where the similarity comes in.
Nixon’s price controls on oil, coupled with pre-existing wellhead price controls on natural gas, benefitted coal by creating oil and gas shortages. That was a non-market, governmental subsidy for coal as utilities chose long-lived coal capacity, something they liked anyway with the greater rate base involved (upon which they received their regulated rate of return under state public utility regulation).
Trump’s action also benefits coal but in a pro-consumer, pro-market way. So Mr. Hakes made the wrong analogy and then missed the right one. [1]
The Good News
But there is good news from Hakes (although he does not like it):
The most obvious cost of Trump’s exit from the Paris agreement is that it unravels years of trial and error to find an approach to climate change that worked in an international context. Because of the number of actors involved, it will be hard to put Humpty Dumpty back together again.
[1] Hakes also states:
To his credit, Nixon also launched the modern movement to balance energy and the environment by establishing the Environmental Protection Agency, signing strong legislation like the Clean Air Act, issuing the first presidential statement on the need for ’clean energy,’ and supporting larger research and development budgets for energy technologies. He often made reasonable attempts to address the economic, environmental and national security implications of energy.
Actually, the energy mess created by price and allocation controls put government in the energy business that is now–for the first time in nearly a half-century–being seriously challenged. Price controls equal shortages, shortages give government a ‘need’ to subsidize alternative energy technologies. Simple deregulation, as Reagan showed, can solve much.
one small point. I worked in retailing at the time, there were no real price controls. you filled out a slip and raised the prices anyway. but the wage controls were real