“You never want a serious crisis to go to waste,” incoming White House chief of staff Rahm Emanuel recently said. “And what I mean by that is an opportunity to do things you think you could not do before.”
What “things” do Emanuel and the Obama administration want to do, and what “opportunities” have been presented them by the current economic crisis? In short, the armada of bailouts deployed by the outgoing Bush administration will soon become the weapons the Democrats need to push greenhouse gas regulations that they haven’t been able to get in through the front door.
Put another way, with the federal government now paying (with your money) the Detroit piper, Obama and congressional leaders get to call the tune. This provides a chance for a regulatory agenda that would never fly otherwise.
General Motors, Ford, and Chrysler all have come begging at the federal trough for a series of bailouts. In recent weeks, Democrats have made it clear what they will demand in exchange for the bailout cash: more attention to fuel-efficient cars, fewer gas guzzlers, more research into alternative-fuel-powered cars, and other green efforts.
It’s also obvious what the Democratic Congress won’t demand of Detroit—they won’t call on the Big Three to significantly renegotiate the absurdly generous pension plans the unions demanded and irresponsible past CEOs agreed to.
Democrats in Washington have long fought to protect the unions and have been champing at the bit for greenhouse gas restrictions. The bailouts provide new leverage on both of these scores.
Specifically, the Obama administration and Congress can new regulate greenhouse gas emissions and fuel efficiency through a back door. While there is broad public support for action on climate change, that support is shallow. People aren’t willing to have their energy prices hiked in order to reduce their carbon footprint.
This past May, the National Center for Public Policy Research asked 802 likely voters, “How much extra would you be willing to pay for gasoline in the near term (with more increases to come later)—on top of increases that would occur anyway—in an effort to reduce U.S. greenhouse gas emissions.” Sixty-five percent of respondents said “nothing more,” and only 10% were willing to pay even an additional 6%.
When Gallup listed twelve environmental concerns to voters, “the ‘greenhouse effect’ or global warming” ranked 10th in importance, with the ozone layer and loss of tropical rain forests sparking more worry. While many leaders in industry, with lobbying champion General Electric taking the lead, back restrictions on greenhouse gases—seeing profit and positive public relations in such measures—top companies cannot agree on the best way to regulate.
For these reasons, Democrats, controlling both chambers of Congress for the past two years, never passed a bill addressing the issue. Now, they can follow government’s three-step process for turning previously hesitant business into pro-regulation advocates [link here:] (1) offer massive taxpayer bailouts to the company; (2) make the bailout cash contingent on the business “voluntarily” adopting policies you prescribe; (3) sit back as that business soon starts lobbying to impose the same restrictions on all companies.
In the auto industry’s case it’s pretty easy to see how this will play out. Congress and the White House, without having to pass a new regulation, can require the suffering automakers to create more hydrogen-powered cars, plug-in hybrids, or cars that can run on high-ethanol blends. This isn’t technically a regulation: it’s government placing conditions on access to taxpayer money.
But once GM and Ford are forced into following whatever green marching orders Obama sends down, then the companies become an ally to the carbon-cappers. If Detroit is bending over backwards to reduce CO2 emissions, you can bet they will start lobbying to require all cars sold in America to meet whatever standard they’re meeting. In other words, the conditions Detroit will agree in order to get bailout cash will soon be imposed on even those automakers (like Honda and Toyota) not begging for federal handouts.
The winners, of course, are the politicians and bureaucrats who now will have powerful allies in their push to expand government—or, as Rahm Emanuel puts it, they will have “an opportunity to do things you think you could not do before.” These bailouts are a kind parting gift from the Bush Administration to the Obama Administration.
Tim Carney is the editor of the Evans-Novak Political Report. His Examiner column appears every Friday.
