Editor note: The first post in in this three-part series was titled A Free Market Energy Vision (Part I: Worldview); the third is“Federal Energy Policy for America (Part III: Cato’s priorities–and a few more).”
The Obama Administration has been implementing an anti-energy agenda since coming to Washington. From day one, Obama and his “dream ‘green’ team” have worked to increase the cost of traditional energy to reduce usage and try to make uneconomic consumer-rejected energy (wind, solar, ethanol, electric vehicles) more economic.
The effects of these policies are now playing out in front of the American people: rising energy prices, tens of thousands of jobs destroyed, and increasing dependence on foreign state-owned energy companies. In response, the free market community has been playing defense.
But even before Obama, multiple-hundred-page interventionist legislation has been signed time and again by Republican presidents.…
“The two greatest enemies of free enterprise in the United States … have been, on the one hand, my fellow intellectuals and, on the other hand, the business corporations of this country.”
– Milton Friedman. “Which Way for Capitalism?” Reason, May 1977, p. 21.
Special government favor. A little something for nothing at the other’s expense…. Sure, a particular business or industry can gain in the short run. But when everyone is getting the booty, almost all lose.
Just look where government is today. The chronic, gargantuan federal budget deficit is testament to the Enrons then, GEs now receiving government subsidies from either the U.S. Treasury or the tax code. The rest of us pay (or will pay) what the rent-seekers are getting and not paying for (outside of their lobbying costs).…
“Great are the powers of electricity,” commented a newspaper story in the late 19th century about the fascinating new energy source. “It makes millionaires. It paints devils’ tails in the air and floats placidly in the waters of the earth. It hides in the air. It creeps into every living thing.” (1)
Electricity is the most utilitarian of energies and the master form of the master resource, as explained below by leading experts and even some critics of energy. Just ask residential users, commercial establishments, or the manufacturing facilities if they want to pay more or less for power.
And so it was distressing to hear Barack Obama in a moment of ‘green’ candor declare that electricity prices would “skyrocket” under a cap-and-trade program to limit carbon dioxide (CO2) emissions. In his exact words and phrasing from November 2008:
…You know, when I was asked earlier about the issue of coal, uh, you know — Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.