News that top congressional Democrats are considering paying drivers as much as $4,500 to retire old gas-guzzling cars cinches it: Washington’s plan for going “green” is little more than a political distortion of Cash4Gold.
The business model for the As-Seen-On-TV phenomena is simple: Convince individuals to give up something of value and give back something of considerably less cost. In the marketplace, that cost is often justified through added value. In this instance, the company provides an easy method of liquidating a commodity, gold.
In the political world, however, there’s a reverse effect. Instead of MC Hammer and Ed McMahon offering to buy your old jewelry for a fraction of the price, it’s Rep. Henry Waxman, D-CA, and Rep. John Dingell, D-MI, offering to pay more than your clunker’s worth. And hey, who needs catchy pitchmen when you’re throwing around “free” money, right?
Of course, that money isn’t free for taxpayers. There’s no official cost estimate for the program, but it’s easy to estimate. If Washington replaced the projected one million cars at $4,500 a pop, the total bill would come out to $4.5 billion. As one satisfied Cash4Gold customer says, “That’s a lot of cash money!”
Perhaps bureaucrats are hoping that after being overwhelmed by costs of the Troubled Assets Recovery Program (TARP) and the automakers bailout, voters will have already exhausted all their outrage at Congress’ spending-heavy streak.
For Dingell, it’s a boondoggle. He gets inventory off the roads so consumers will want to buy cars from his Big Three backers. For Waxman, it’s another way to buy congressional votes for his green agenda.
This more-for-less model seems to be the new way of doing business on Capitol Hill.
This holds true for the cap-and-trade legislation currently awaiting mark up in the House. Researchers expect the system to incur great costs, with surefire decreases in economic activity and an estimated blow to family incomes of as much as $6,752 per year in 2030.
But, again, the payoff doesn’t seem to justify the price. Carbon markets will deliver virtually negligible changes in CO2 emissions so long as developing nations such as China and India don’t buy in.
In exchange for little to no return on our planet’s future, cap-and-trade would likely force U.S. households to sell our “unwanted gold, silver, platinum, diamonds and other jewelry” just to cover our air conditioning bills.
“Green” jobs offer another prime example of this new less-for-more political approach. Though advocates claim that government “green” subsidies will create’ jobs and protect the environment, a study from Spain suggests that these policies will actually kill nine jobs for every four “green” ones these measures create. That means the administration’s plan to create three million green jobs will come at the cost of six million existing positions.
Here’s the bottom line. By taking money from efficient money-making enterprises to fund politicians’ pet projects, Washington is quietly making everyone worse off. While it’s much harder to see the jobs destroyed than the few that get photo ops, the result is the same.
Noted economics columnist Robert Samuelson of The Washington Post has called Obama’s focus on psychological benefits “mostly a self-serving mirage.” He notes: “If you spend more for gasoline or electricity — or for health insurance premiums — then you spend less on other things, from meals out to home repair. Jobs in those sectors suffer.”
This should not be new to those familiar with rudimentary economics, but from green jobs to green caps to buying out clunkers, lawmakers are investing our money in fool’s gold.
Bret Jacobson blogs about energy and environment economics at
www.TheChillingEffect.org
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