Cap and trade will increase the price of all commodity trades for the benefit of Goldman Sachs, a tentacle-like presence in elected government such as the Congress, through White House appointments, as well as some less transparent areas like the Fed and the Treasury Department. Cap and Trade is structured as a private tax, such that the government will never see the revenues, they will go straight from the carbon-producing into the hands of the non-producing.
http://www.rollingstone.com/po…
And instead of credit derivatives or oil futures or mortgage-backed CDOs, the new game in town, the next bubble, is in carbon credits – a booming trillion- dollar market that barely even exists yet, but will if the Democratic Party that [Goldman Sachs] gave $4,452,585 to in the last election manages to push into existence a groundbreaking new commodities bubble, disguised as an “environmental plan,” called cap-and-trade. The new carbon-credit market is a virtual repeat of the commodities-market casino that’s been kind to Goldman, except it has one delicious new wrinkle: If the plan goes forward as expected, the rise in prices will be government-mandated.
The readership of BMG should take a closer look at this program before endorsing it in the name of environmentalism. If it passes it would be in the service of mega-billionaires to the detriment of the middle class, and the middle class is the last defender of the freedoms that we hope to preserve. We have been misled to attack the drivers of SUVs and the guy mowing his lawn, while financial overlords use their influence to get massive amounts of tax money transferred to them in the form of bailouts, covering one bubble after another.
excellent article regarding this piece in Rolling Stone.
Thanks for your reply… McArdle points out a few missed connections, but it doesn’t change the substance. Taibbi did miss that Goldman and Morgan Stanley were instrumental in getting dark markets and the intercontinental exchanged approved for the trade of oil futures. The subsequent runup in prices bankrupted the middle class worldwide.
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p>ON Cap and Trade Taibbi article is most useful: Wall Street is setting the tax and Wall Street is collecting the tax.
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p>The revolving door between Goldman and government is a way to engineer booms and busts in the general economy, and Goldman can use its connections to learn when to buy low and when to sell high through its buddies at the Fed.
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p>Taibbi is a leftist, sure, and his tone offends McArdle, but so what? I’m not a leftist. Marx was right about some things though, especially that the meritocratic capitalists would begin to buy their way into government to benefit current business and kill off their competitors. All sides are beginning to see the huge theft that is being perpetrated on the middle class. If we want our system to survive enforcement and punishment of fraud is vital.
I think Goldman is filled with smart people. They’ll always make tons of money.
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p>The fact that they are politically active doesn’t mean that they’re somehow manipulating politicians to write silly and economically destructive cap-and-trade legislation; Markey and Waxman don’t need any help to do that.
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p>I left the real estate development business to get into renewable energy development because the industry is so larded with government-legislated tax benefits it’s hard NOT to make money.
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p>Why is anyone picking on Goldman just because they have identified and are pursuing the same federal-giveaway program I am?
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p>That’s EXACTLY what the UAW did with Chrysler and GM. Hear any complaints from the left about that? [crickets chirping]
I certainly can’t blame you for going where the money is. However cap and trade will raise food and energy prices at a time when there are many people around the world in food/energy starvation. If global warming is a crock, then it will kill those people to the benefit of carbon traders, who will use their influence in government to keep the scam going on long after everybody else has figured it out.
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p>The essential problem of the economics of cap and trade is this: who asked for more expensive energy? Not the middle class buyer heating his home.
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p>The elites in government and finance will benefit from more expensive energy by holding down social competition from the middle class, further impoverishing them and preventing a concentration of capital in the only people who can stop their game.
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p>The second stage of the meritocratic ascendancy, which you rightly point out as “people at Goldman are smart” will be to buy influence in government, such that they won’t have to work anymore, but can still prevent dynamic competition from below.
Renewable energy is expensive. Wind is 2.5 to 5 times more expensive, and solar 10 to 50 times more expensive, than wholesale prices off the grid (coal, gas, nukes, etc.)
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p>It’s Democrats who are pushing renewable energy as some sort of religion. Republicans (at least the true free-marketers) rightly object to the elitist imposition of renewable energy’s premium.
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p>I always objected to the tax-credit laden affordable housing industry as distorting the housing markets. This time I’m keeping my mouth shut.
I wish I could agree, but can the whole state run on making government mandated stuff? Who will make anything? Working here is like looking at food.com instead of eating.