The Smoot-Hawley Tariff Act signed into law on June 17, 1930, it raised tariffs on over 20,000 imported goods to record levels. In the United States 1,028 economists signed a petition against this legislation, and after it was passed, many countries retaliated with their own increased tariffs on U.S. goods, and American exports and imports were reduced by more than half. The Smoot-Hawley Tariff Act is credited with turning a very bad recession into the Great Depression.
Tomorrow Congress will vote on the Waxman-Markey bill aka Cap and Trade.Experts estimate the annual costs will approach $3,000 for every family within a few years. In return for reducing the size of Middle America’s wallet, there will be virtually no change in the amount of greenhouse gases emitted into the atmosphere, the reduction of which is supposed to be the bill’s main purpose. It will raise energy costs for people at all ends of the income spectrum, and cause a massive amount of job losses and push industry overseas. In short, this Waxman-Markey cap and trade bill has a very good chance of becoming the Smoot-Hawley of the 21st Century:
Fiscal Policy: The House of Representatives is preparing to vote on an anti-stimulus package that in the name of saving the earth will destroy the American economy. Smoot-Hawley will seem like a speed bump.
Not since a misguided piece of legislation imposed tariffs that turned a recession into a depression has there been a piece of legislation as bad as Waxman-Markey.
The 1,000-plus-page American Clean Energy and Security Act (H.R. 2454) is being rushed to a vote by House Speaker Nancy Pelosi before anyone can seriously object to this economic suicide pact.
It’s what Janet Napolitano, secretary of Homeland Security, might call a “man-caused disaster,” a phrase she coined to replace the politically incorrect “terrorist attack.” But no terrorist could ever dream of inflicting as much damage as this bill.
Its centerpiece is a “cap and trade” provision that has been rightfully derided as “cap and tax.” It is in fact a tax on energy everywhere it is consumed on everything it is used to make or provide.
It is the largest tax increase in American history — a tax on all Americans — even the 95% that President Obama pledged would never see a tax increase.
It’s a political bill that could come to a vote now that a deal was struck with farm-state legislators concerned about the taxation of even bovine flatulence.
As part of the agreement reached Tuesday night and announced by Rep. Henry Waxman, D-Beverly Hills, agricultural oversight for cap-and-trade was transferred from the Environmental Protection Agency to the U.S. Department of Agriculture.
Farmers hope the USDA will be less intrusive. The EPA has been tasked by a Supreme Court ruling to regulate greenhouse gas emissions from your nostrils to your lawn mower. This even covers the emissions of barnyard animals, including the methane from cows.
The American Farm Bureau warns that cap and trade would cost the average farmer $175 on every dairy cow and $80 for beef cattle. So farm-state politics trumped climate change.
We all know about farmers paid not to grow food. But now, American taxpayers apparently will be paying companies not to chop down trees. The Washington Times reports that as part of the legislation, the House will also be voting Friday on a plan to pay domestic and international companies around the world not to cut down trees.
Such offsets “would be a transfer of wealth overseas,” said William Kovacs, vice president for environmental affairs at the U.S. Chamber of Commerce. So if a tree falls in a Brazilian forest, does a U.S. taxpayer make a sound?
As we’ve said before, capping emissions is capping economic growth. An analysis of Waxman-Markey by the Heritage Foundation projects that by 2035 it would reduce aggregate gross domestic product by $7.4 trillion. In an average year, 844,000 jobs would be destroyed, with peak years seeing unemployment rise by almost 2 million (see charts below).
Consumers would pay through the nose as electricity rates would necessarily skyrocket, as President Obama once put it, by 90% adjusted for inflation. Inflation-adjusted gasoline prices would rise 74%, residential natural gas prices by 55% and the average family’s annual energy bill by $1,500.
Hit hardest by all this would be the “95% of working families” Obama keeps mentioning as being protected from increased taxation. They are protected, that is, unless they use energy. Then they’ll be hit by this draconian energy tax.
And what would we get for all this pain? According to an analysis by Chip Knappenberger, administrator of the World Climate Report, the reduction of U.S. CO2 emissions to 83% below 2005 levels by 2050 — the goal of the Waxman-Markey bill — would reduce global temperature in 2050 by a mere 0.05 degree Celsius.
President Obama has called on the U.S. to “lead by example” on global warming. During the campaign, he said: “We can’t drive our SUVs and eat as much as we want and keep our homes on 72 degrees at all times . . . and then just expect that other countries are going to say OK.”
Soon we may not be able to. Other countries can just sit back and watch us destroy ourselves. Where will you be when the lights go out?