Capitalism Becomes Sick, Turns Green

by Garrett Baldwin

Friday, July 17, 2009 at 11:09 AM EDT

Source.

One of the finest movies produced in the past five years, in my opinion, is Ridley Scott’s epic American Gangster. There is a critical scene in which Frank Lucas (Denzel Washington) confronts a rival drug boss (Cuba Gooding Jr.) for selling botched heroin under Lucas’ ‘brand name’ drug Blue Magic. As a result of this infringement, addicts were dying and Blue Magic was gaining a poor reputation among customers. “I don’t understand,” Lucas says. “Why do you have to take something that’s perfectly good the way it is, and wreck it?”

The easiest way to destroy brand identity is to tear down a product’s reputation for quality. The same goes for an economic philosophy, which is precisely what Democrats are doing to ‘free market capitalism’ through the creation of a new carbon emissions trading market that is anything but ‘free’.

Over the past year, Democrats have derided capitalism as the primary antagonist of the current recession. In mid-March, Howard Dean slipped: “I think we had quite enough capitalism the last eight years,” Dean said. “I think we need some regulation now.”

Mister Dean, it was government intervention into the free market that created the current mortgage mess by forcing the underwriting of bad loans. Regulations and obligatory government mandates to offer loans to individuals with poor credit were the primary catalysts for the housing bubble.

To call the Waxman-Morley climate bill the next government abomination would be an understatement. This American Clean Energy and Security Act of 2009 (ACESA) was supposedly introduced to “create clean energy jobs, achieve energy independence, reduce global warming pollution, and transition to a clean energy economy.” The bill in its current language will not accomplish any of these four goals.

Instead, the ACESA enables corporations to pollute and still reap massive windfall earnings by charging customers more for energy. In addition, the bill creates the next Wall Street bubble through the endorsement of carbon trading derivatives speculation. Within a decade, carbon dioxide may become the world’s largest commodity market. The Financial Times reported last week that the carbon market could reach $3 trillion by 2020.

The carbon emissions trading market will be heavily regulated by government officials and will be derivatized and speculated by the same Wall Street traders who inflated the mortgage-backed securities bubble in recent years. However, this market is far more dangerous than the mortgage-markets since there is really no physical commodity actually being traded; at the end of the day the Al Gores and Goldman Sachses of the world will be trading credits for producers of any good or service to actually create ‘air’.

Democrats neglected a possible-carbon tax, which would clearly have driven people to consume less energy and produce less carbon dioxide. Instead, many argued that a carbon emissions market is a ‘free market’ solution although it is really a market fueled more than nepotism and cronyism than it was by capitalism. In addition, the trading program does little to produce positive environmental results.

My question for Democrats is this: If they argued that capitalism has failed in the past eight years, why would they create such a monstrosity of a bill and then dub it ‘capitalistic’ in nature? To find the answer to why this bill passed in late June, one simply needs to follow the money. It’s flat out cronyism when the game is rigged for a select few.

And while companies like Goldman Sachs will achieve record profits (they own ten percent of the Chicago Climate Exchange), expect the financial companies to look for the next investment bubble after the bottom falls out of the carbon markets: My 2009 prediction is that these same banks begin to look into creating an arbitrary options market for water resources that centers heavily on weather speculation.

When the coming carbon bubble does burst, just as it did in Europe, it would be fair to predict that the economic and political fallout will be far worse than what is currently happening with the failed green jobs programs in Spain or the rampant fraud investigations in the Netherlands’ carbon market.

What’s worse is that when this supposed ‘free’ market solution fails, Democrats will once again blame capitalism and greed for yet another over regulated industry that they had to get their hands on because of a moral creed. Should gasoline rise to $5 per gallon and higher, we’ll more likely hear about greedy oil companies and calls from government knuckleheads like Maxine Waters that the energy companies need to be nationalized, just as she said in 2008. Maxine Waters (D-Ca.) of course graduated from college with a sociology degree, which means that she treats economics as a social science rather than an applied science with laws and rules. She probably never took an economics class in college, rather being convinced by the liberal financial mantra that ‘rich means evil’, and ‘poor means exploited’.

As an economic conservative who supports the triumphs and innovations of laissez-faire capitalism, I’m starting to feel more and more like Frank Lucas the more I learn about this proposed carbon market. Leave it to a group of liberals with little-to-no training in economics to corrupt and mislabel the greatest system for economic growth in the history of the planet – perfectly good the way it is – and, in turn, wreck it.