Young Sexy Politics

Today, the House will vote on The American Clean Energy and Security Act, otherwise known as the “Waxman-Markey bill.” The proposed measure, would attempt to cut greenhouse gas emissions and promote renewable energy. The question is, how? The Waxman-Markey bill is of the “cap and trade” variety. For those of you not familiar with cap and trade, I’ll explain. Cap and trade legislation puts a cap on how much pollution companies can emit. These restrictions are applied across the board, reaching every company, in every industry. Basically, each company is allotted a certain number of “carbon credits.” These credits dictate how much pollution each company is allowed to put into the air. If a company uses all its credits, it can purchase more from another company, that hasn’t used all its credits. The problem is, should this go into effect, there will be very few companies that don’t use their entire allotment. After all, they are being asked to pollute less than ever before, right off the bat. Even if companies don’t use all their credits and other companies are able to purchase them, there is a fixed amount. This means, once the credits are gone, they’re gone for good. Think of it like a poker game. When each “player” goes bust, they have to buy into the game again. There can’t be unlimited re-buys because the dealer only has so many chips. So, you might ask: What if every company uses all their credits and there are none left to buy? Well, if this happens (which it undoubtedly will), companies that go over, will pay a steep tax. This will cost companies everywhere billions, in many different ways.

First off, they are expected to reduce carbon output by 17%, which is no easy feat. Second, they will be forced to compete for a fixed number of carbon credits (chips), to avoid paying additional taxes. Whenever there is a fixed amount of something and a steady pool of competing buyers, the price goes up. The international marketplace, naturally works EXACTLY like an eBay auction. Look at gold and land. We can’t make more of either. There’s only so much. With everyone in the world trying to purchase it and the available quantity going down, the price goes up. The price may fluctuate as it rises, but look at the historical prices of both gold and real estate. They’re on a vicious upward trend people. In the 1950’s, you could buy a home for the current price of a new Chevy Tahoe. This is the very simple law of supply and demand. Before long, those carbon credits are going to be very, very expensive. Which means… companies are going to spend a lot more money, in one of two ways: Buying more carbon credits, or paying “penalty taxes.” Here’s a little known fact that lurks just beneath the surface: No company in America pays taxes. Sure, they engage in the formalities of forking over money to the IRS, but that doesn’t ACTUALLY come out of their pocket. When the cost of doing business increases, it’s simply chalked up to an increase in production cost, making whatever goods the company produces more expensive. In other words, the consumer foots the bill for the increase, not the company.

Sometimes, this can be dramatically amplified. For example, something as simple as bread, takes multiple parties to produce. The wheat is farmed somewhere in the Midwest and is bought by say, Little Debbie. That wheat is then mixed with other ingredients in a huge plant, to produce bread. Then, that bread is transported via truck to its second-to-last stop, the grocery store. Finally, it’s purchased by the end consumer, you. In this chain of distribution, each party is passing a higher cost of doing business, onto the next. If the farmer has a higher cost of doing business because of this bill, he’ll pass that on to Little Debbie. Now, Little Debbie get’s screwed three ways. They’ll have to pay more for wheat, more in transportation costs, because diesel trucks pollute like nobody’s business, AND have a higher cost of doing business at their plant, due to their own carbon emissions. I know, that was a really long sentence… still with me? So, Little Debbie will charge the grocery store exponentially more for their bread, because of many, many added costs. Meanwhile, the grocery store has to turn some sort of profit, so there will be yet another markup on this little, tiny loaf of bread, that your family will consume in 3 days. This is how anything even resembling a tax increase causes inflation.

I don’t care where you stand on global warming. Anyone with any sense can see that we’re not in the right economic climate, for a bill of this magnitude. According to the Wall Street Journal, this could be the largest tax in American history. The big players cheerleading for this bill are Nancy Pelosi and Al Gore. Al Gore… wow, what an anomaly. This dude hasn’t served in politics for almost a decade and yet somehow, silly people still listen to him. But it should be ok. The Waxman-Markey bill has a dicey chance of making it through the house, maybe 50/50. And it looks even bleaker in the senate. However, this is your country YSP readers! Don’t get blindfolded and beat into submission, like a cheap piñata. I’m all about involvement. So no matter how you feel, find out who your representative is, call their office, and tell their 19 year old assistant what to do. These people work for you. You pay them. They represent your district and every single election cycle, you have a choice to vote them in or out. They know that and believe it or not, it scares them. Politicians have the cushiest job on the planet. All they do is lie and take people’s money. You think they want to lose that? So do all of us a favor, pick up the phone and spend 2 minutes speaking your mind. If you can’t even do that, I don’t know how the hell you get out of work an hour early to vote. Don’t be that dude that does nothing, yet rambles on and on, about the government and conspiracies all day. Order these people around like the hired help they are. Only then, will we see REAL change.