California, here we come.
Examiner Editorial
July 1, 2009
While promoting his new cap-and-trade energy tax bill, which passed the U.S. House last week, President Obama revealed in a White House address on Monday his model for the nation's economy - California. "In the late 1970s, the state of California enacted tougher energy-efficiency policies," Obama said, noting that the state and its residents use less energy today per capita than the national average. "Think about that," he said, "California producing jobs, their economy keeping pace with the rest of the country and yet they've been able to maintain their energy usage in a much lower level than the rest of the country."
Obama might want to rethink his choice of a model state because it is easy to understand how California has curbed its energy use. Between 2000 and 2007, before the current recession, the state shed nearly 21 percent of its manufacturing jobs, driving down its industrial electrical consumption by 21 percent. California's industrial users pay electric rates twice as high as their Midwestern counterparts - which helps explain why so much heavy industry has fled the state. In addition to alienating its industry, California has also curbed energy use through exorbitant residential electric rates (50 percent higher than the national average) and massive net out-migration. Between 2005 and 2007, 2.14 million Californians moved to other states, while only 1.44 million people from elsewhere moved to the Golden State, according to the U.S. Census Bureau. Don't be surprised when the 2010 Census finds even more people leaving to escape California's 11.5 percent unemployment. And, as jobs and residents fled California, its tax revenues have declined, while its politicians went on a spending binge, creating a severe budget crisis.
If the President wants America to look like California, pushing the Obama-Waxman-Markey cap-and-trade anti-global warming energy bill through Congress is surely the way to do it. Among much else in its 1,200+ pages (none of which were read by the vast majority of House members who voted on it), the measure caps carbon dioxide emissions at levels certain to cause artificial scarcity and higher energy prices. That will convince still more American manufacturers that they can only remain competitive by moving to other countries with no caps (think India and China), lower expenses and cheaper workforces. Manufacturers who can't move or who must rely on electric power will simply go out of business or drastically reduce their workforces. The Heritage Foundation forecasts job losses under Obama-Waxman-Markey of 1.15 million annually beginning in 2012. Welcome to the Hotel California in the age of Obama.
