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  • The Amazing Arrogance of the Paris Climate Agreement

    The Amazing Arrogance of the Paris Climate Agreement

    It was December 12, 2015, when headlines in the world’s leading newspapers, in implausibly bold type, celebrated the “historic” agreement in Paris between all nations of the world to curb carbon emissions and thereby stop climate change: or so they said, as if elites get to say what is and is not historic.

    The spin, like the agreement itself, was crammed down our throats.

    I read the stories that day, and the next and the next, and the continuing coverage for weeks that nearly every reader – apart from a few dedicated activists and permanent regime bureaucrats – ignored. The stories appeared on the international pages and didn’t touch the business pages. Energy stocks weren’t affected in the slightest.

    The stories had all the signs of dutiful public service announcements – “fake news,” as they say today – and they contained not a single quote from a single dissenting voice, because, of course, no respectable news outlet would give voice to “climate deniers.”

    Deniers?



    Let me pause to protest this “denial” language. It attempts to appropriate the widely shared disgust toward “Holocaust denial,” a bizarre and bedraggled movement that belittles or even dismisses the actual history of one of the 20th century’s most egregious mass crimes against human rights and dignity. Using that language to silence questions about an attempt to centrally plan the energy sector is a moral low that debases the language of denial.

    This rhetorical trick reveals all you need to know about the desperate manipulation the climate planners are willing to engage in to realize their plot regardless of popular and justified skepticism concerning their regulatory and redistributionist policies.

    And what are the specifics of that agenda? The Paris Agreement is a “voluntary” agreement because its architects knew it would never pass the US Senate as a treaty. Why? Because the idea of the agreement is that the US government’s regulatory agencies would impose extreme mandates on its energy sector: how it should work, what kinds of emissions it should produce, the best ways to power our lives (read: not fossil fuels), and hand over to developing world regimes billions and even trillions of dollars in aid, a direct and ongoing forcible transfer of wealth from American taxpayers to regimes all over the world, at the expense of American freedom and prosperity.

    And you wonder why many people have doubts about it.

    The Trumpist Reaction

    Consider what else was going on December 12, 2015. Donald Trump was in the midst of a big battle for the Republican nomination. He started with 16 challengers to beat. He was widely considered to be a clownish candidate, a guy in it just to get press attention to build his business brand. Surely the American system of electoral politics, largely but imperfectly managed by responsible elites, would resist such demagogues. Besides, the media that trumpeted the Paris Agreement would be on hand to shame anyone who supported him. He couldn’t win.

    The press mostly pretended that he wasn’t happening. The Huffington Post put coverage of his campaign in the humor section.

    And so President Obama came home from the Paris meetings to the acclaim of all the right people. He alone had made the responsible choice on behalf of the entire country: every business, every worker, every consumer, every single person living within these borders who uses some measure of this thing we call energy. He would be our master and commander, ruling on our behalf, fresh off cocktail parties in Paris where the best and brightest – armed with briefcases full of government-funded science – decided to give the Industrial Revolution its final comeuppance.

    The exuberant spokespeople talked about how “the United States” had “agreed” to “curb its emissions” and “fund” the building of fossil-free sectors all over the world. It was strange because the “United States” had not in fact agreed to anything: not a single voter, worker, owner, or citizen. Not even the House or Senate were involved. This was entirely an elite undertaking to manage property they did not own and lives that were not theirs to control.

    The Backlash

    And then Trump spoke. He said that this Paris bit was a bad deal for Americans. We are already in a slow-growth economy. Now these global elites, without a vote from Congress, are presuming to mandate massive controls over the economy, hampering its productive sector which benefits everyone and transferring countless billions of dollars out of the country, with the acquiescence of the party in power.

    He spoke about this in a way that bested all his opponents. The entire scenario fed his America First worldview, that the global elites were operating as parasites on American prosperity and sovereignty. His answer was to put up the wall: to immigrants, to trade, to global managerial elites, and reclaim American sovereignty from people who were selling it out. It was another flavor of statism (globalism and nativism are two sides of the same coin), but it tapped into that populist vein of the voting public that looks for a patriotic strongman to save them from a distant ruling class.

    Everything about the Paris Agreement seemed structured to play into Trump’s narrative of how the world had gone mad. And then he won the nomination. Then he won the presidency. None of this was supposed to happen. It wasn’t part of the plan. History took a different course from what the power elite demanded and expected to happen. Not for the first time.

    How Dare Anyone Dispute Our Plans?

    But the “globalists” of the type that tried to make Paris work have a stunning lack of self-awareness. They pretend to be oblivious to the populist resentment they breed. They act as if there is not a single legitimate doubt about the problem, their analysis of cause and effect, the discernment of their selected experts, or their proposed coercive solution. And there certainly isn’t a doubt that their mighty combination of power, resources, and intelligence can cause all the forces in the universe to adapt to their will, including even the climate that King Canute himself said could not be controlled by kings and princes.

    As with countless other statist plans over the last hundred years, they figured that it was enough to gather all the right people in one room, agree to a wish list, sign a few documents, and then watch the course of history conform to their wishes.

    The Paris Agreement is no different in its epistemological conceit than Obamacare, the war on drugs, nation-building, universal schooling, or socialism itself. They are all attempts to subvert the capacity of society to manage itself on behalf of the deluded dreams of a few people with power and their lust for controlling social and economic outcomes.

    Rejecting Elite Politics

    How far are the Democrats from recognizing what they have done? Very, very far. John C. Williams, writing in the New York Times, has decried the “The Dumb Politics of Elite Condescension”:

    “As a progressive, I am committed to social equality – not just for some groups, but for all groups… Everyone should have access to good housing and good jobs. That’s the point… Too often in otherwise polite society, elites (progressives emphatically included) unselfconsciously belittle working-class whites. Democrats should stop insulting people.”

    That would be a good start. But it is not only about rhetoric. Policy preferences have to change. A global agreement that somehow binds entire countries to centrally plan and regulate the whole of a crucial sector of economic life that supports all economic advances of our time – at the very time when the energy sector is innovating its own solutions to carbon emissions in the cheapest possible way –  is certainly going to breed resentment, and for good reason. It is a bad and unworkable idea.

    Continued reliance on undemocratic, uneconomic, imposed strategies such as the Paris Agreement will only further feed the populist revolt that could end in the worst possible policy combinations of strong-man nationalism, nativism, protectionism, closed borders, and backwards thinking in general. No good can come from this. The backlash against globalism can be as dangerous as globalism itself.

    You might think that the election of Trump would offer some lessons. But that is not the way the arrogant minds behind the climate agreement work. They respond by merely doubling down on disdain, intensifying their commitments to each other, heaping more loathing on the workers and peasants who have their doubts about these deals.

    Trump and his ilk abroad, backed by voting masses with pitchforks and torches – and not a managed transition from fossil fuels to clean energy – are their creation.


    Jeffrey A. Tucker

    Jeffrey Tucker is Director of Content for the Foundation for Economic Education. He is also Chief Liberty Officer and founder of Liberty.me, Distinguished Honorary Member of Mises Brazil, research fellow at the Acton Institute, policy adviser of the Heartland Institute, founder of the CryptoCurrency Conference, member of the editorial board of the Molinari Review, an advisor to the blockchain application builder Factom, and author of five books. He has written 150 introductions to books and many thousands of articles appearing in the scholarly and popular press.

    This article was originally published on FEE.org. Read the original article.


  • The Log Tax Is Harming Both Americans and Canadians

    The Log Tax Is Harming Both Americans and Canadians

    In early May, Vancouver in Canada’s far western province of British Columbia is a beautiful place. Full-bloom dogwoods, rhododendron, and azaleas blanket the city against the backdrop of a sky-blue harbor and beckoning snow-capped peaks.

    “What a contrast!” I thought as I walked the streets of Vancouver two weeks ago, “between the calming artistry of nature and the nastiness of politics.”

    I was there barely a week after President Trump’s imposition of 20% tariffs on logs imported from Canada. It was also just days before elections that would determine which party controlled the British Columbia Legislature and, thereby, who would serve as the province’s next Premier.

    The timing was superb for enjoying the sites of Vancouver but not so good for Trump’s tariffs.

    A Tax on Americans



    As Mark Perry explained, the new duties were ushered in amid plenty of bluster about “unfair” and cheap, subsidized lumber from our northern neighbors but they are actually taxes levied on Americans who buy Canadian lumber, especially American home builders, bed-frame and pallet manufacturers, and picket-fence makers. All the time-honored logic of trade economics applies here, suggesting that not much good, and perhaps a lot of harm, would likely ensue for parties on both sides of the border.

    I picked up a copy of the British Columbia edition of The Globe and Mail to see what the Canadians were saying about it all.

    As you might imagine, nobody was cheering for Trump and the U.S. In fact, the incumbent Liberal Party of Premier Christy Clark, locked in a battle for votes with the decidedly more socialist NDP (New Democratic Party) and the equally socialist Green Party, felt compelled to prove that its generally trade-friendly posture only went so far. Clark suggested retaliation in the form of restrictions or an outright ban on thermal coal from the U.S. The other parties promised an even “tougher” stance.

    Stooges

    Protectionism is like a Three Stooges episode: You slap me, I poke you in the eye. The one difference is that when a government slaps and pokes another government, each one ends up assaulting its own citizens as consumers and producers.

    Trump’s ill-timed tariffs were pushing all the major British Columbia political parties in the wrong direction. Voters ended up giving the Liberal Party a razor-thin plurality which may yet dissolve into a loss if the NDP and the Greens team up in a coalition. If that happens, both socialism and protectionism will get a boost in British Columbia while American lumber buyers get slammed.

    But lest we dump all the blame on Trump, let’s understand that this is really a “pox on both your houses” conundrum. In the same newspaper in which I read about Premier Clark’s threatened tit-for-tat, Canadian columnist Barrie McKenna pointed his finger at Canada’s existing policies for prompting the Trump tariffs.

    Export Restrictions

    One such policy is the practice of federal and provincial governments in Canada charging below-market rates when they sell lumber from their vast land holdings. That’s a subsidy, and if the land were owned privately it’s hard to imagine that private firms would charge less than the market will bear and encourage over-use of their resources through underpricing simply to be charitable.

    Likely more counter-productive than those subsidies, writes McKenna, are “log export restrictions that exist only in British Columbia.” (Though both British Columbia and the federal government in Ottawa restrict the export of logs from government land, British Columbia is the only government that restricts exports from private lands as well).

    I had to read that two or three times. Log export restrictions? What? So governments subsidize logging on their lands and then stifle the sale of logs to the U.S.? Yes. This is government, mind you, so it doesn’t have to make sense to anybody but politicians and their politically-connected friends.

    McKenna writes,

    Those restrictions, in place since the 1880s, are an aberration in Canada’s generally open economy. Indeed, logging is a rare example where governments dictate to private interests what they can export, for reasons other than national security … Economists in Canada have warned for years that the policy lessens competition for logs, increases the supply of timber available to mills in British Columbia and suppresses prices by up to 50 percent. And that lowers the cost of finished lumber (emphasis mine), such as two-by-fours, destined for the U.S. market.

    If that’s confusing, just think of it this way: What government gives loggers with one hand in British Columbia, it substantially takes with the other by telling them where they can sell their logs. Subsidized logs that can’t go to the U.S. because of export controls end up at Canadian mills at depressed prices. There, they are converted into planks and two-by-fours whose export is not restricted. And it’s those planks and two-by-fours that Trump just slapped a 20% tariff on.

    A Better Path

    You slap me, I poke you in the eye. Wouldn’t it be better for everybody if we all just stopped slapping and poking each other? Yes, and that’s called free trade. The problem is that even though “free trade” makes all the sense in the world, governments have both the power and the incentive, at least in the short term, to slap, poke, subsidize, and sell favors.

    Moreover, log export restrictions are not unique to British Columbia. “The United States, for example, has an export-licensing regime for trees cut on federal and state lands,” says McKenna. “What’s unusual about Canada’s regime is that it also covers trees on private land in British Columbia.”

    One of the reasons governments shouldn’t intervene in trade in the first place is that interventions become addictions. The benefits are targeted on a few at the expense of the many and when those benefits are offset by a government on the other side of the border, it’s hard to get the first government to call it quits. Intervention A leads to Intervention B, which provokes Intervention C, which in turn sparks Intervention D and so on, until the process is reversed or the alphabet and economic freedoms are exhausted.

    From another city in Canada – Montréal, in the eastern province of Quebec – comes an intriguing proposal to scale back some of this nonsense. The Montreal Economic Institute suggests that trade negotiators for Canada and the U.S. should work out a “lumber for cheese” swap: the U.S. would dismantle its barriers on Canadian lumber and in exchange, Canada would get rid of its barriers on American dairy and poultry.

    MEI says the crazy-quilt patchwork of subsidies, quotas, and export controls on both sides of the border cost consumers billions in higher prices. Since “supply management” by the two governments has been problematic from its inception, premised as it is on the insane notion that fines and penalties help the economy, let’s just negotiate them away. Tit-for-tat in the right direction, for a change.

    Free traders like myself see many advantages to abolishing protectionist devices unilaterally, regardless of what the other side does. As Frederic Bastiat explained, we should be grateful when the sun shines its light for free, even if it means candlemakers sell fewer candles. Forcing everybody to paint their windows black to keep out the free sunlight only deprives everybody of value and convenience. We can apply the savings to some other endeavor, stimulating yet other industries in the bargain. If that’s unrealistic, it’s only because of politics, not because of economics.

    Let’s rid ourselves of these senseless interventions as soon as we can, one way or the other.

    Thinking about all this as I departed beautiful Vancouver, I found myself shaking my head as I’ve done so many times when contemplating the policies of government. What a ridiculous, self-defeating racket this protectionist stuff is!

    Oddly enough, it was the 20th-century comedian Jimmy (“The Schnoz”) Durante who gave us a succinct answer to this recurring problem when he said, “Don’t put no constrictions on da people. Leave ’em da hell alone.”

    Additional recommended reading:

    Lawrence W. Reed

    Lawrence W. Reed is President of the Foundation for Economic Education and the author of the book Real Heroes: Inspiring True Stories of Courage, Character and Conviction. Follow on Twitter and Like on Facebook.

    This article was originally published on FEE.org. Read the original article.


  • If Trump Were Serious about Tax Cuts, He’d Be Serious about Spending Cuts

    If Trump Were Serious about Tax Cuts, He’d Be Serious about Spending Cuts

    I want tax cuts. I support tax cuts. I relish tax cuts.

    • I like tax cuts because I’m a curmudgeonly libertarian and I think people should have the first claim on the money they earn.
    • I like tax cuts because I’m an economist and we’ll get more growth if penalties on productive behavior are reduced.
    • I like tax cuts because the academic research supports the “starve-the-beast” theory of less revenue leading to less spending.

    This is why I wrote favorably about Trump’s campaign tax plan, and this is why I like Trump’s new tax plan (with a few exceptions).

    But I confess that my heart’s not in it. Simply stated, I don’t think the new plan is serious.

    If Trump really wanted a big tax cut, he would have a comprehensive plan to restrain the growth of government spending. He doesn’t.

    If Trump genuinely wanted lower taxes, he would be aggressively pushing for genuine entitlement reform. He isn’t.

    And Congress isn’t much better. At least in the absence of leadership from the White House.

    It’s not merely that I’m concerned lawmakers won’t put the brakes on spending. And it’s not just that I fear they won’t enact much-needed entitlement reform. I worry they’ll actually increase the burden of federal spending. Just look what’s happening as Congress and the White House negotiate a spending bill for the remainder of the 2017 fiscal year. The pending deal would trade more defense spending for more Obamacare subsidies. Everyone wins…except taxpayers.

    In this profligate environment, it’s hard to be optimistic about tax cuts.

    By the way, I fully agree we would get more growth if Trump’s tax plan was enacted. But the Laffer Curve doesn’t say that all tax cuts pay for themselves with faster growth. That only happens in rather rare circumstances.

    Yes, the lower corporate tax rate would have a big supply-side impact (and there’s plenty of evidence from overseas to support that notion), but many of the other provisions of his plan are sure to reduce revenue.

    Again, I don’t lose sleep about the prospect of less money going to Washington. But you can be sure that politicians pay attention to that issue.

    Which is why I’m pessimistic. I don’t think Congress is willing to approve a big tax cut.

    The bottom line is that there are three possible outcomes.

    1. Congress and the White House decide to restrain spending, which easily would create room for a very large tax cut (what I prefer, but I won’t hold my breath for this option).
    2. Congress decides to adopt Trump’s tax cuts, but they balance the cuts with dangerous new sources of tax revenue, such as a border-adjustment tax, a carbon tax, or a value-added tax (the option I fear).
    3. Congress and the White House decide to go for a more targeted tax cut, such as a big reduction in the corporate income tax (which would be a significant victory).

    Ultimately, I want to completely junk our corrupt system and replace it with a simple and fair flat tax. But for 2017, I’ll be happy if we simply slash the corporate rate.

    Republished from International Liberty.


    Daniel J. Mitchell

    Daniel J. Mitchell is a senior fellow at the Cato Institute who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.

    This article was originally published on FEE.org. Read the original article.