The Bubble Blowers: Goldman Sachs and Cap and Trade
As Cap and Trade races through Congress, here is a question - Who will benefit? The environment and us or Government Sachs? by Jake Towne, the Champion of the Constitution
(libertarian)
Sunday, June 28, 2009
Last week the House voted 219-212 to pass HR 2454, the American Clean Energy and Security Act of 2009, whose intent is to "create clean energy jobs, achieve energy independence, reduce global warming pollution and transition to a clean energy economy." I've only had time to browse the 1,092 page bill and sincerely believe it will not achieve a single one of its purposes.
The creation of clean energy jobs is very vague and the parts that are clear center not on industry but on educating people about global warming - this appears to signal the creation of a new class of bureaucrat-teachers, not industrial jobs.
Energy independence? Transition to a clean energy economy? Get real, there is nothing of substance in the document that details such a plan, and this is a pipe dream for government to create this. What will you ask? Only a free market, driven by the consumer and free from government interventions can do so, in my opinion.
"Reduce global warming pollution?" Somehow I missed the scientific debate where the global warmers square off against the global coolers and those who believe that 'the weather just changes, weather you want it to or not' as I suggested here "Anthropogenic Global Warming or an Ice Age, Which Is It? (PART 2/2)". Is carbon dioxide really a pollutant? Don't plants need it to live and don't we all respire it? It would be a lot cheaper and a lot more useful than HR 2454!
My own private analysis of HR 2454 can be summarized up with:
Inefficient energy sources will instead be propped up and buffered from free market competition by the government.
The taxed companies will pass down the taxes to We the People, and energy costs will rise for us, the consumers.
The State will subsidize and hence sponsor, mandated education that "global warming" is fact, stifling debate.
Wall Street will have a great time doing all the carbon credits trading using derivatives with "underlying assets" that are literally in many cases, just hot air.
Or, in three words, as "Crap 'N Trade"
On the last point above, let's ask the question, "Cui bono?" Who benefits?
Goldman Sachs recently announced that RECORD bonuses will be generated in 2009. The $10 billion dollars in bailout money will be returned, although undisclosed amounts lent to GS by the Federal Reserve via the discount window and other off-balance sheet transactions will not be discovered until the FED is audited by Ron Paul's bills HR 1207 and S 604. How can this be?
Goldman Sachs are our country's premier inside traders – former Secretary of Treasury Hank Paulson and his appointed lieutenant Neel Kashgari are only the tip of the iceberg in terms of GS alumni in government. They are aware of, and even exercise control over, the next steps our government will take.
This means in upturns as well as downturns, it is possible to profit. Some say it's even easier to profit during downturns, as Catherine Austin-Fitts discusses in the latter half of this June 26 interview with Max Keiser.
In a recent Rolling Stones piece entitled "The Great American Bubble Machine," Max Tiabbi does us all a great service by - sarcastically but realistically - detailing the history and prior bubbles of this firm. Tiabbi's next prediction for a bubble (mine, for the record, is still the U.S. Treasury and gold markets, where GS plays a vital role as well) is that of carbon credit trading. He details how GS has promoted this legislation and how they will profit from this market – which, bottom line, is a government-created tax market where the carbon credits issued to energy producers increase in scarcity year after year. (Photo courtesy Steve Ford Elliot License)
Who will deliver these 'mandated profits' to Goldman Sachs? That's our job as the energy consumers!
"It's not always easy to accept the reality of what we now routinely allow these people to get away with; there's a kind of collective denial that kicks in when a country goes through what America has gone through lately, when a people lose as much prestige and status as we have in the past few years. You can't really register the fact that you're no longer a citizen of a first-class democracy, that you're no longer above getting robbed in broad daylight, because like an amputee, you can still sort of feel things that are no longer there.
"But this is it. This is the world we live in now. And in this world, some of us have to play by the rules, while others get a note from the principal excusing them from having to do homework until the end of time, plus 10 billion free dollars in a paper bag to buy lunch. It's a gangster state, running on gangster economics, and even prices can't be trusted anymore; there are hidden taxes in everything you pay. And maybe we can't stop it, but we should at least know where it's all going."
Here is where, in my opinion, Tiabbi grasps part of the truth, but makes a fatal mistake, the same made by many Americans. Let me attempt to correct it briefly.
Tiabbi relates that most Americans think we live in a "first-class democracy," and fervently believe this is beneficial. It's not. Democracy is a Greek word from demos (the majority) and -cracy (rule), or literally "rule by majority." Search the both the Declaration of Independence or the Constitution for the term and you will not find it. Our founders – to a man - recognized the dire dangers of democratic rule. This is why they created for us a nation of laws protecting the natural rights of the individual – a constitutional republic, a union of nation-states, consisting of checks and balances, with both democratic and special-rule elections or appointments, and both democratic and special-rule voting practices. This is why:
"A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine."
- Thomas Jefferson, drafter of the Declaration of Independence and 3rd President of the United States
"Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide."
- John Adams, 2nd President of the United States
"A democracy is a volcano which conceals the fiery materials of its own destruction. These will produce an eruption and carry desolation in their way... Liberty has never lasted long in a democracy, nor has it ever ended in anything better than despotism... Democracy pollutes the morals of the people before it swallows up their freedoms."
P.S. You can listen to my most recent interview with "Patriot Pastor" Kinley from last week on BlogTalk Radio here. On July 1, 4 PM EST, I will be on live with Ken Van Doren of the Voice of Liberty on www.RevolutionBroadcasting.com.
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
As always, unlike the NFL, the author grants full permission to allow any accounts of, rebroadcasts, retransmissions, repostings of this article to your blog or anywhere else in order to promote the Restoration of our Republic.
Veritas numquam perit. Veritas odit moras. Veritas vincit. Truth never perishes. Truth hates delay. Truth conquers.
Tu ne cede malis sed contra audentior ito. Do not give in to evil but proceed ever more boldly against it.
The views expressed
in this article are those of Jake Towne, the Champion of the Constitution only and
do not represent the views of Nolan Chart, LLC or its affiliates.
Jake Towne, the Champion of the Constitution is solely responsible for the contents
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with Nolan Chart, LLC in his/her role as a columnist.
Posted By: Paul Benedict
Date: 2009-06-29 14:52:22
Yep... not too many comments here I've noticed. We're all sick. We all know this.
Wish I had some solutions beside the long shot Social Security reform based on investment in primary residences (spreak property and property rights to the inner city).
I'm thinking about a web site for history teachers for developing lesson plans... not quite ACORN.
Let the drug addicts out of jail. Put the politicians in jail?
Jake, thanks for the article. Kudos to you for actually taking the time to wade through the HR2454, "America's Energy Dictatorship Bill". We as libertarians ought to be really, really afraid of "Cap and Trade", just on philosophical grounds, and those of us who also truly advocate clean energy as a vehicle for societal affluence ought to be terrified. There are at least three other major effects than your summary mentions. Possibly a corollary of your first summary point, new energy technologies which require some R&D input to mature will not be funded by private investors. Government subsidized large installations of already known but economically unviable alternative energy will see to that, as will the cooptation of energy researchers away from innovative capital by lots of lucrative grants from the DOE (which of course include no incentive for the success of the technology, so it almost never occurs).
Also, big centralized government always looks to solve problems in a big centralized way. If this monstrosity becomes law there will almost certainly be a strong push to extend power transmission lines just about everywhere, to gather up all the energy from the far flung solar arrays and wind farms hundreds of miles away from the points of need. This enhanced grid will cost many of hundreds of billions to implement and will put everyone's access to electricity firmly in the grasp of the security state, stifling the development of decentralized solutions like personal solar arrays/windmills/biofuel reactors. I believe that the authoritarian state has a great interest in making sure that the people see themselves as dependent on the state for basic articles of sustenance, such as energy, and that this bill is a major attempt to inhibit the idea of self reliance among the population.
The last point I would like to add to your summary is that of enforcement of its provisions. This is the most frightening part to me. People aren't going to voluntarily pay for the rights to emit CO2. We'll simply ignore their law or if needed hide the emissions; Cap and Trade will surely raise the effective price of fuel and I'm sure it won't be any time at all before there is a thriving black market in untaxed fuel-- as something of an agorist, I will happily participate as I am sure many here will. By analogy, I wonder how many people right now have planted a row of tobacco in their gardens in response to Obama's latest puritanical paroxysm? The response of the authoritarian state is predictable, however: the creation of a sprawling "energy security" gestapo to make sure everyone obeys the cap and trade fiat. I suspect that "global warming" and "energy security" are just the latest memes being emitted by the propagandists of the authoritarian security state, ie. plugin replacements for previously used bogeymen "terrorists" and before that "communists", an inflammatory idea useful for scaring a gullible populace into accepting draconian measures of enslavement. As an aside, I may be wrong but I think I vaguely remember somewhere reading Milton Friedman proposing pollution credits that sound very much like the CO2 credits now being proposed-- if true this dovetails with Walt's recent assertion about Friedman being at best a lukewarm advocate of liberty.
I personally believe in reducing fossil fuel use and in providing energy affluence, but certainly not by state decrees restricting personal behavior. My cursory research into this problem indicates that biofuels can make petroleum obsolete. This can be accomplished by farmers and independent scientists without any help from the government or large companies, just a little help from venture capitalists and noninterference (ie. nonrequirement of licensing,oversight and regulation for biotech companies) from the state. If that can come to pass, the energy problem WILL be solved, by market means, no thanks to the nanny state.
As to the global warming issue, ice core data from Lake Vostok are conclusive proof that CO2 levels and global temperature averages are tightly correlated; see the wikipedia article entitled "Ice core" for a nice graph showing CO2 levels and isotope ratios measuring temperature (deuterium and oxygen18) over the last 400ky or so. They're pretty much the same curves. You're a chemical engineer, so I'm sure you can get the IR absorbance vs. wavelength data for methane, CO2 and H2O and model what happens when one side of a variably transmittant partition radiates a some 5500 deg K radiation + a lot of 4 deg K surface on one side and 300 deg K black body radiator on the other. You will verify that the greenhouse effect is a real phenomenon dependent on the transmittance values of the partition, which in turn are dependent on the concentrations of the gases. An interesting discussion is here: www.pnas.org/content/16/8343.long and the actual ice core data are here in case you want to whip up your own climate model in matlab:
From the temperature graph this is obviously a chaotic system that is prone to state transitions, the immediate transition having initiated more than 10kya. Anthropogenic? I'd guess not considering the apparently low state of technology at that time. My SWAG is that the initiator of the current outgasing feed-forward kinetics (methane hydrates are unstable and CO2 is less soluble int warm water) is the postulated Younger Dryas comet impact event, which would have sent a lot of dust into the atmosphere, increasing radiation absorption on the glacial surfaces, causing melting. Global sea level rise after this period agrees with this scenario. The danger is that higher anthropogenic CO2 levels will defeat whatever natural mechanism has occurred in the past T rise jumps to stop the rise. I don't suppose that would necessarily be disastrous in the long run and globally, but locally there could be some real pain. Obviously CO2 levels were much higher in the past, certainly in the Permian from the fossil record. It's probably very good for bioproductivity-- high CO2 and water, warm temperatures -> lots of crops. The Antarctic ice cap would melt, raising ocean levels 250 feet or so, but smart people have always known how to migrate away from natural perils so I guess it really isn't a big deal.
I agree with the fair assesment regarding, 'a big centralized government always looks to solve problems in a big centralized way.' Statists always think they can run your life better than yourself.
Anyways, the reason for replying to you has everything to do with your Last Paragraph starting with "From the tempurature graph..." At first I was almost talked into believing that baloney but you used the term SWAG. So, I'll give you my SWAG regarding the the Ice Core, Sea Level, and such... The High CO2 and water, warm temperatures will result in lots of crops... but you purposely left out that for all of the crops produced, carbon dioxide is required and what a better carbon capture than crops, I prefer HEMP. Then, there in lies the theory as I will state the case as provided by your quote... "The Antarctic ice cap would melt, raising ocean levels 250 Feet or so..." What is produced when 'ice' melts? My SWAG is Oxygen. You did make a fair statement. "...but smart people have always known how to migrate away from natural peril so I guess it really isn't a big deal." Now, if only we can talk some sense into the people of the 'hurricane belt'.
Jake Towne,
Once again, you have acheived the Champion of the Constitution award again... It is always a pleasure to have an article for reading to my family, and close friends over the phone (those whom do not have internet access). You are brilliant. You make me seem brilliant for just having read this and already have known it. Enough patronizing... The 'bit' on whether the "Clean Energy blah... blah... blah... or Expansion of Government/Clean unpopular jobs Bill." will create jobs or not. American Clean Energy and Security Act of 2009, it will create 1/100th of the jobs that building Nuclear Energy Plants (via the private sector), will create in half the time (my SWAG). However, HR 2454 is unconstutional. The Proper Role of Governemt is to protect rights, not take them away, the U.S. Government, lately, has been the wealth taker not maker (my money is my property, I acquired it legally).
Back to the Proper Role of Government; The proper role of government is to protect equal rights, not provide equal things.
The word 'proper' has often been looked at as a word that can just be omitted to fit the statist agenda as it sees fit. No where is the proper role of govenment to include enforcement of compliance to any contract with the private sector but rather establish the laws of punishment for breaking the contract... Explain the oversight committee, explain the grand standing over executive bonuses. The statist 'mob rule' has been activated and now it is time for the patriots (sovereign citizens) to stand up for the natural rights inherent to them by their Creator; Because the U.S. Government is derelict in its duty.
Posted By: Jake, the Champion of the Constitution
Date: 2009-06-30 17:27:59
Dear Brandon -
Sorry if I am sometimes remiss in pointing out the unconstitutionality of events, you are correct of course, but sometimes to get across to the audience - who don't particularly care for the Rule of Law - I need to use other methods of attack.
Yes, all this talk about energy dependence makes one forget about the nuclear option. Though waste storage is a problem not to be overlooked, one needs look no further than France to see a safe option for powering most of our country's electrical grids.
I look forward to reading your column "Brandon, Constitution Enforcement Officer" one day. We need a few more million like you :) I've looked into industrial hemp a bit and really like what I see... the fed governments only role should be to roll back the red tape and let the states decide, in my opinion.
Brandon, I live in the hurricane belt, about 50 feet above sea level. The soil beneath me is silica sand, with an occasional fossilized shell to be found if you dig; why? Because at some time in the not too distant past this place was underwater-- glaciation was less and sea levels were higher, and the isotope ratios in the ice cores show unequivocably carbon dioxide levels were high at that time. It's happened before and it will happen again. As to your nit about my use of the term "scientific wild assed guess", please allow me to pick: that term referred to the initiator event which pushed the system from what we in chaos theory call a "critical point", ie. a metastable balance point, into a state transition. In this case I was referring to the putative Younger Dryas comet impact; there isn't conclusive evidence yet whether it occurred or not. "SWAG" did not refer to the correlation between ice core data measure parameters global average temperature and atmospheric gas concentrations. Those correlations are not baloney; they are logically sound. Your criticism that I "but you purposely left out that for all of the crops produced, carbon dioxide is required" is false. I know my own motivation better than you and I "purposely" did no such thing. If you did not grasp the meaning of my admittedly breviated line "it's probably very good for bioproductivity-- high CO2 and water, warm temperatures -> lots of crops.", then I apologize for being unclear: the intended meaning of my statement is the same as your assertion. BTW, I agree with you on hemp. In terms of BTU/year-acre or equivalent metric units (megajoules/hectare-sec maybe?) of biofuel grown, Cannabis sp. are very near the top of the list if your climate is amenable, as are cattails, some Acacias, the broadbean, certain Cyanobacteria and some others.
Dear Jake,
Nuclear is often overlooked. I don't like conventionally known nuclear energy for precisely the reason Brandon agreed with me own: we've been told that nuclear energy has to be done in large reactors at giant secure facilities only from which the energy can be dribbled out to millions of users from each big facility. This is tailor made for centralized control and micromanagement of the behavior of the consumers who would use the energy. Heard about the so-called "smart grid"? The publicly stated purpose is micromanaged energy conservation over a centralized grid. The unstated purpose is for the state to know when Brandon turns on his grow lights and a whole lot of other information to which they have no ethical right in a free society. For that reason I oppose the promotion or funding of centralized nuclear power.
There is of course the possibility of decentralized nuclear power, either by means that are currently speculative-- I'm not convinced that cold fusion is impossible and it sure looks like currently a lot of fissures are forming in the body of the standard model of physics, or by the use of very small reactor technology. The latter are technically feasible, and perhaps one of the best things we could do to promote decentralized energy production would be to work out the details of such units and the isotope purification processes needed to implement them, and then broadcast this technical information into the public domain so it can no longer be classified. Vindication for Wen Ho Lee! But I'm relatively certain that Homeland Stupidity would still strive to quash its implementation.
GOVERNMENT SACHS – THE BUBBLE BLOWERS