Free Market Carnivore's Blog

Is President Obama readying his team for another push on cap-and-trade by another name?  Since his vaunted green jobs push so far has been an abysmal failure, will he stay true to form and double down?

Rumors and leaks about tonight’s State of the Union speech added to Eric Bolling’s musings over the President’s recent appointments would have you think so.  The leaks indicate Obama will harp on “investment in the future” and other so-called targeted spending.  Since his energy policy of moratoriums and prohibitions on drilling and spending on more expensive alternative energy sources have done nothing but increase energy costs, more of the same would logically follow.  His EPA and Interior agency regulations and proposed rules would do nothing but make energy scarcer, harder to get, harder to utilize and more crippling in cost to the economy.

But Bolling notes Obama’s appointments of William Daley as chief of staff and Jeffrey Immelt as jobs council chairman are stirring disquiet in Washington.  Daley, when he was at J.P. Morgan, pushed hard for cap-and-trade, Bolling noted.  Immelt has led GE deeply into so-called green energy fields, even now running “eco-imagination” commercials on television.  On top of that, both J.P. Morgan and GE received billions in various subsidies and loans from the Obama administration.

Put together with Obama, the three could be seen as a new green team for the rest of Obama’s term.  Bolling also notes that — entirely coincidentally, of course — those two companies are major campaign contributors to the Democratic cause.  (Bolling is a commentator on Fox News and has a show on Fox Business Network, “Follow the Money.”)

We’re not sure how the other bit of news on the energy front fits in to this picture.  Politico has reported that Carol Browner, Obama’s energy czar and a rabid environmental extremist, is leaving the administration.  No one seems to be talking about where she is going.  But it would seem to be good news to have a former EPA stalwart out of the administration.

We can’t shake the feeling that this admininistration’s energy policy is just a big activist board game to them, instead of one of the most critical keys to the U.S. economy and sadly in need of triage if Obama really wants a health economy and a nation with confidence in the future.

Last post, we updated you on the huge Omnibus appropriations bill the Congressional leadership dropped on members’ desks this week in lieu of a simple Continuing Resolution to keep the government running.

But at midday Thursday in Washington, D.C., the tax rate extension “compromise” bill hit a stumbling block in the House of Representatives. While the bill sailed through the Senate Wednesday with over 80 votes, in the House both conservative Republicans and liberal Democrats have opposed the bill. The House had begun work on the rules that would govern the debate on the bill in the House but the leadership suddenly pulled the rules debate off the floor. Observers at Fox News indicated that pulling the rules discussion most likely means the leadership knows they do not have the votes to pass the full bill.

Conservative Republicans oppose the deal agreed among Republican and Democratic leadership and President Obama based on the unfunded new spending and reimposing the death tax. Some House conservative Democrats may agree and the liberal Democrats are opposed to what they see as tax “cuts” to the rich on tax rates and too low rates on the death tax. While the Senate passed it as is, voter expressions of disfavor on the bill may have eroded enough support among both Republicans and Democrats that there are not enough votes to pass it.

At this point, it is not clear what will happen but there is not a lot of wiggle room with the calendar dwindling. We dealt with this bill in detail in our last AFF Sentinel, expressing our opposition to the bill and favoring allowing the next Congress, more reflective of the national voting sentiment, to handle the tax rates and additional spending. Tax rates could easily then be made retroactive to Jan. 1.

Keep the pressure on and stay tuned.

For two years we’ve been calling on President Obama to let us help create revenue, growth and jobs by signing the three Free Trade Agreements on his desk – or, more likely, off out of sight in a cubbyhole somewhere.

 Instead, while claiming to favor free trade, he ignored the agreements, keeping his left and his labor union allies happy.  And the gains for the beef industry already painstakingly negotiated – primarily tariff reductions and increased access – were never realized.  Instead, beef and pork markets suffered interruptions and difficulties stemming from Mexico’s unhappiness with the administrations reneging on Mexican trucking access.  Canada – as the sole producer of high quality fed beef — has had free rein to complete trade agreements around the world.

 Then, when the President wanted to curry Korean favor because of his trip to Seoul for the G20, intensified by the imperative to strengthen our relationship with South Korea while North Korea shelled South Korean territory, he did not do the prudent and expedient but the egotistical thing.  He should have apologized to America’s farmers and ranchers and manufacturing exporters for having delayed their sales and growth for two years, signed the agreement the South Koreans had fought so hard for and presented it to the Koreans when he arrived.  He should also have apologized to the unemployed people who could have had jobs out of billions of dollars in new trade over the two years.

 Of course, had he signed the agreement when he came into office, knowing the economy needed all the boosting it could get, he would have been in a totally different position in 2010.  With the Koreans having enjoyed the benefits of two years of more and cheaper American short ribs, and time for some of the fears and tensions over American beef safety to have soothed, the time would have been more propitious for President Obama to nudge the Koreans toward a 30-month age limit in concert with most of the rest of the world.

 Not having done any of those prudent things, yielding to ego and to his auto union allies, he elected to force negotiations on new side agreements, so that he could get a better deal  — more protection  —  for the American auto industry.  And he got nothing added for the beef industry at all.

 Now the agreement has to go back to both the Korean parliament and to the U.S. senate all over again for approval.  Will the South Korean demonstrators go back to the streets over American beef like they did the last time?  Perhaps not, as while some Korean consumers are still leary of American beef, many of the demonstrators the last time turned out to be auto union members and rent-a-demonstrators massing over lots more than just American beef.

 Perhaps more worrisome is the mood of the American electorate, singed by a lousy economy and historically huge unemployment, suspicious of anything that might take away jobs.  The unions have convinced many Americans  — including many Republicans – that free trade hurts the American job market.  But the facts are undeniable.  Trade by 2003 accounted for nearly a quarter of the U.S. GDP.  Trade barriers raise prices for consumers, reducing the purchasing power of their paychecks.  A University of Michigan study found that eliminating all tariffs would expand the U.S. economy by $95 billion, contributing to job creation and higher wages (“Free Trade by Any Means: How the Global Free Trade Alliance Enhances America’s Overall Trading Strategy,” Heritage Backgrounder No. 1786, 8/10/04.)

 So, hopefully, the newly-elected conservatives, who surveys tell us favor trade, will approve the Korean deal and increased access and lower tariffs can start generating business.

From his first month in office  – telling Canadians that he favored more trade while his agriculture secretary was hustling mCOOL along towards confrontation with Canada and Mexico – President Obama has been double talking the trade issue.  He has painted himself as a free trader at the same time he had three fully negotiated and Senate-ratified free trade agreements (FTA) on his desk for signature that he totally ignored, until recently.

While the president cast about for the last year for something that would boost economic growth and create jobs, he studiously avoided looking in the corner where the blinking, flashing FTAs were waiting.  The FTAs could have been contributing billions in business and jobs for American producing, exporting and transporting companies but the president did nothing.  Of course, the reason was primarily political: labor unions oppose trade as a matter of policy.  For some reason, the Teamsters who haul everything, the Longshoremen who load and unload at ports, the assembly line workers who build tractors and bulldozers, which get exported worldwide, and the workers at packers and processors and elevators don’t count.

Certainly, the economic data that shows a booming export business creates more jobs in American than get lost to overseas companies, gets ignored by unions, this Administration and, unfortunately, too many voters who don’t understand the overall benefits of trade to the overall economy.

With the G20 meetings taking place in South Korea, it was difficult for even President Obama to ignore the existence of the Korean FTA.  Now, anyone with any knowledge of trade agreements knows that tier after tier of negotiators spend years putting these agreements together.  Then they must be ratified by governing bodies in our trading partners’ governments, be ratified by our Senate and signed by the president.

The protectionist, leftist elements of American politics – from the same line of thinking that produced the Smoot-Hawley tariffs that ignited a trade war and extended the Great Depression in the 1930s  —  have prevailed upon President Obama to sit on his hands, in the name of protecting American jobs.

But many folks hoped exports would add revenue and jobs the economy could surely use.  To placate those folks, the President, with just months to go before the Korean visit, said he would like to sign the agreement with Korea in connection with the trip.  But he needed to re-negotiate a few things before he could sign it.  The unions and the liberal activists have used two straw men rallying points in opposition to free trade: other countries must be made to adhere to our ridiculous environmental  restrictions and they must adhere to our labor rules.  These two tactics have been surefire tricks to stymie free trade renegotiations.

Of course, going back on our word has done nothing to enhance the U.S. reputation as trading partners.

So while the existing FTAs could have been piling up economic progress for two years, with precedents set for beef and auto benchmarks and Korean consumers getting used to relying on great American products, the two countries could have used the G20 summit as a time for refining and adding to existing, functioning agreements.  Instead, the administration, Democratic lawmakers, the unions and Ford Motor Co. have spent the last few weeks trying to scuttle what we already had sealed, delivered and ready for signing in 2007.  The Wall Street Journal called the Korean FTA the “biggest bilateral trade deal the U.S. has taken up in more than a decade,” (“U.S. Hit by Trade Setback,” 11/12/`10.)

Thank you Mr. Obama.  Not only has billions not come into the economy and many millions not come into livestock coffers, but the Administration ignited a new trucking war with one of our biggest trading partners – Mexico.

And while our Federal Reserve pumps half a trillion dollars into the economy, weakening our dollar and the U.S. demonstrates itself to be a trading bumbler on the world stage, China asked the president at the G20 why we have the nerve to complain to them about keeping the value of their currency undervalued.

All of this is in the forefront while the president actually postures that his goal is to double exports by 2015.  Since our trading partners and trading competitors have been negotiating rings around us while the Obama Administration did nothing, that goal is a paper tiger.  Korea negotiated a nearly identical agreement to the deal we should have had with the EU in 2007, Wall Street pointed out, (“Embarrassment in Seoul,” 11/13-14, 2010).  We’re losing market share, losing out on new access to markets and losing reputation as a trustworthy trading partner.  While the world economy grows, global consumers want more and more high quality products – like beef available only from the U.S. and Canada.  But our government keeps throwing up roadblocks.

Even before Obama, the Democratic Congress had failed to renew the president’s fast track negotiating authority.  That might have slowed President Bush but since Obama’s doing nothing anyhow, it hasn’t made much difference.  That authority needs renewing but in the environment now, with scared, out-of-work people ignorant of the benefits of trade and looking to place blame, some serious educating will be necessary.

The bottom line is that the Administration has done nothing to boost revenues or access to markets already agreed to three years ago, has partially poisoned the well with our partners and now, by pumping a half-trillion dollars into the market, is making dollar-denominated commodities like oil and grains more expensive.  The boost will help grain producers but it is the harbinger of the inflation for everyone else we may see someday if our government ever gets out of our way and lets the economy recover.  At least the recent election is a step towards making that “if” a “when.”

Neil Cavuto on Saturday’s “Cavuto on Business,” (Fox News channel, 10/23/10) laid a telling fact on the table:  The American Federation of State, County and Municipal Employees (AFSCME) has so far spent $87.5 million during this 2009-2010 election cycle.  This according to Mark McKinnon, a former George Bush campaign advisor writing at the DailyBeast.com.  We also saw it noted in the Wall Street Journal’s Daily Political Diary (10/25/10).

 On Cavuto’s show, Dagen McDowell  described the “vicious cycle:” “Public tax money pays for their salaries and union dues, which are used to elect Democrats who give those unions more power.”  That is, tax dollars are being used to push for more government programs, more government employees, more government salaries and pensions – requiring more taxes from taxpayers to pay for it all.

 We recently heard Steven Greenhut speak regarding the public unions and the story isn’t pretty.  Greenhut wrote Plunder! about the public employee unions and the ballooning pension obligations alone that will bankrupt many American cities unless something is done.

 Charles Payne noted on Cavuto’s show that of the top 15 political donors over the last 20 years, only three were corporations, the rest were all unions, with most of the money going to Democrats.

 By comparison, the U.S. Chamber of Commerce, representing corporations in America, spent $75 million and drew the ire of President Obama, who made unfounded, unproven and false charges that lots of that money came from foreign interests.

 Ben Stein debunked one of the great political myths:  that it’s the Republicans that have all the “fat cat” contributors. 

 “That’s nonsense,” he said.  “In the 2008 campaign cycle, there were 15 million $1 million contributions from individual donors and all but one was a Democrat.  The Democrats have been the party of `fat cats’ for a long time now: union fat cats, Hollywood fat cats, New York-Wall Street fat cats – they’ve got them.”

 Ben left out the trial lawyers, whom we bet made up a big chunk of the 15 million-person list – and that’s not counting the many millions the two trial lawyer associations contribute.  They are always among the top contributors and the more laws, regulations and programs, the more lawsuits they can generate.

 McDowell had the last word, noting that the Democrat’s scream loudest when any of the rules even allow corporations to make contributions, like the Citizens United case.  They only want unions to be allowed to contribute. 

 But of all union growth in recent years, most of it has been in public employee unions, funded by tax dollars.  Another reason this election, fueled by the fury of millions of overburdened taxpayers, is so critical.

The name of the game now is turnout.

In the uproar over the GIPSA Rule, we haven’t touched on election year politics for awhile.  The Rule is just one of many items we either wouldn’t have to fight at all or would have more help to fight, if a different party was in power.  Two-thirds of the game changed in 2006 when the Democrats took over both houses of Congress and the agendas changed over to big government, far-left extreme activism and spending to back up those causes.

USDA, DOJ and EPA are prime examples of agencies which have felt they had carte blanche to push farther and farther beyond the authority given them by law to push activist agendas as far as they could.  Congressional Democratic leadership has certainly not moved to rein them in.  So businesses of all types are facing increasing regulation, restriction and compliance costs with little help from Congress to slow or stop it.

That scenario is just one of several factors forcing most companies to keep their powder dry rather than expand and hire.  Even stronger overseas demand compared to domestic demand is hard to take further advantage of, as President Obama continues to do almost nothing to expand trade, sitting on free trade agreements while pretending to favor exports.

Those of the conservative bent need to take matters into their own hands.  Turnout – that is, making sure more conservative folks get out and vote than the Democrats can muster – will determine just how much power conservatives will have after this election.  Canvas your friends, your acquaintances and your community.  Talk up the election.  Use those Suburbans and Expeditions.  Make sure everyone who needs one gets a gentle reminder or a ride to the polls.  This is no ordinary election.  The future of the country depends on you.  You’ve seen what the left has done and what they plan for the future.  If you’re not happy about it, get in gear.

Way back when we listed key reasons to oppose candidate Obama’s election, near the top of the list was cap-and-trade legislation in particular and his stance on environment issues in general.  His appointment of Carol Browner as his energy czar and Lisa Jackson as EPA administrator right off the bat was an early clue this would be no moderate Democrat regime in Washington.

Long before Copenhagen, Jackson was handed a gift.  While Congress was dragging its feet getting around to authorizing what she wanted to do on cap-and-trade, the Supreme Court ruled EPA could proceed to regulate greenhouse gases like CO₂ and methane, under a very expanded interpretation of the Clean Air Act.  While that was never the intention of previous Congressional law or intent, Jackson immediately seized on the gift from the near-legislator justices to see just how much she could get done by regulation.  Damn the infernally slow senators, full speed ahead!

On one front, while Jackson started promulgating rules on dust that would nearly put coyotes in violation of rules, much less pickups and field work, she also went to work on carbon.  Now at least one state is fighting back.  Just as many states banded together to contest the adminstration’s health insurance mandate and Arizona has fought back on federal illegal immigration failure, Texas is fighting back against Jackson’s charge over legal barriers to get what she wants now, not later.

While Jackson has decided she can set carbon targets quickly, by law it is the states who run the programs and do the permitting.  When federal EPA issues decrees, the law gives the states three years to revise their implementation plans, according to the Wall Street Journal (“Shootout at the EPA Corral,” 10/11/10).  But Jackson decided to ignore the law.  She has decreed that the states will have their implementation plans revised by this January or she will strip the permitting process from the states and take it over herself from the federal level.

“Put bluntly, this coercion is illegal,” the Journal said.  In addition, the feds haven’t written their permitting program and have no staff for implementing such a program.  With states stripped of the permitting authority and the feds not ready, that would mean no major American construction project, stalled without EPA air quality and pollution permits, would go forward for months or years.

For Texas, that not only means no major construction but no major energy or refinery projects.  Across America, it would mean no new carbon-based utility projects, industrial production, manufacturing plants or even large office buildings, the Journal said.  Texas has estimated over 160 state projects would be stalled in 2011 alone.  So Texas has sued the EPA in a D.C. appeals circuit, charging the EPA of going “beyond the powers” granted it by Congress.

Animal agriculture was a lonely voice crying out against carbon regulation, until the states who depend on coal to generate electricity started figuring out what would happen to them under Obama’s energy plan.  Now, Democrat Jay Rockefeller has a bill (S. 3072) to put a two-year freeze on Jackson’s power grab.  Now there’s an idea to put the kibosh on Jackson’s dust-defying regulations.