Part 3 in a series
By Katie Kieffer
Young entrepreneurs deserve a chance to innovatively protect the environment while turning a profit. Image credit: http://tinyurl.com/yjzxsy
Now we’re buying rights?
As I began discussing here and here, cap-and-trade would introduce the new concept of a “right” for corporations to emit limited amounts of CO2 – before man-made CO2 emissions have even been proven significantly harmful to the earth. It’s dangerous to give our politicians the ability to create new “rights” based on such preliminary science because the origination of rights should be reserved for:
- Rights enumerated in the U.S. Constitution
- The inalienable rights enumerated in the Declaration of Independence
Bottom line, the government does not have the power to grant U.S. citizens the “right” to emit CO2, especially when scientists just announced that CO2 may be beneficial to the environment.
Perhaps you’re willing to be taxed via cap-and-trade, pay higher prices for energy and consumer products and give the government the power to dictate your company’s CO2 emissions in exchange for its promise to protect the environment by policing CO2 emissions. This is a fairly common viewpoint, so let’s consider whether it’s a fiscally responsible or earth-friendly view. My assessment is that those who hold this viewpoint care deeply about protecting the earth, and are missing some of the facts. According to this viewpoint, the government – not the free market or private entrepreneurs – is best-suited to protect the earth.
I maintain that, left alone, the market would actually police itself. Corporations that are not viewed by the public as “green,” “sustainable” or “earth-friendly” are no longer popular. For marketing purposes alone, corporations realize that they need to go green – in a fiscally responsible manner – in order to survive. American companies already know that young, Generation Y professionals (born between 1980 and 1994) – will pay more for “green-conscious brands.” There’s no need for big bro Uncle Sam to jump in and try to oversee what will happen naturally. And, there is certainly no need for taxpayers to pay Uncle Sam to oversee and police what will happen naturally.
How good would the government be at protecting the environment via cap-and-trade?
Stanford University’s Hoover Digest reports in its latest environmental research that the government has shown itself to be “environmentally, fiscally and economically irresponsible” in its public land management and National Park Services. According to the Hoover Digest:
1.) “Decades of fire suppression by the Forest Service have disrupted natural fire cycles … and 90 to 200 million acres of federal forests are at high risk of burning in catastrophic fires. …fires put enormous amounts of carbon into the atmosphere…”
2.) Park barrel politics, such as: “the Government Accountability Office testified in Congress that in 2004 the BLM (Bureau of Land Management) earned about $12 million in grazing revenues but spent $58 million implementing its grazing program.”
3.) “Given that the federal estate is worth trillions of dollars, Obama should make land management agencies turn a profit.” National forests earn an average of 76 cents for every dollar spent – a net loss – under government management.
The point? Would you hire a landscape architect to design a green roof for your building that had a track record of blowing budgets out of the water and building environmentally unstable green roofs? Of course not. Likewise, the government’s inability to manage our national forests in an environmentally effective or profitable manner should be a cause for pause before we hand over another big environmental project to them: Managing the climate.
The government has a track record of spending money, increasing the national debt and pushing its own programs into obliteration through poor fiscal planning. How can we sit back and let our government get away with acting so irresponsibly?
Give young leaders a chance
Unemployment is rising and is expected to come out above 10 percent for Nov., 2009. The government is growing and monopolizing our economy, taking away opportunities that rightfully belong to smart, innovative and hard-working entrepreneurs. Young professionals – conservative, moderate and liberal – share common goals such as achieving the American dream, protecting the environment, and maintaining the freedom to build our careers and businesses. We need to decide whether we want to give up a great deal of liberty and cash to pay the government a backwards $6,000-plus tax to monitor carbon emissions and climate change.
Under a backward or regressive tax like cap-and-trade, politicians line their pockets and increase their power while, jobs take a downward spiral. Like entrepreneur, Matt Harrison, I believe our generation has the energetic, entrepreneurial spirit and innovative power to solve this current financial and budding environmental crisis – while turning a profit – without paying Uncle Sam to baby-sit the process.
The government shouldn’t be run on a budget?
No, of course it should! But comparing business/family budgets to the federal government’s budget doesn’t make sense. If families could guide their own money situations through interest rate hikes or in setting up a legal system or the degree of the regulation, or running deficits with the only threat of re-payment being one’s creditworthiness, then it’d make sense. The government has a huge say in how much money’s worth, and how the economy functions, and businesses/families don’t.
That said, of course there needs to be budgeting. But budgeting here is to account for expenditures and revenues, and so taxpayers can vote on what is good to spend money on or not, not because the government will get to zero dollars and run out of money.
So, the government heavily influences the value of money (not “controls” it), and can deficit-spend (depending on if it needs to or not). Here’s another explanation from Robert Reich.
Moreover, when your family’s cutting back, you spend less. However, 99.9 % of economists across the political spectrum agree that that’s the time the government should spend. It’s intuitively backwards, but that’s because in times of less spending, only the state — which can spend — can get us out of a death spiral. They are able to spend to spur economic activity in times where there are none (but stop doing that once that’s spiral’s over with).
Bottom line, there’s tons of reasons, both big and small, why business/family and government budgeting are different.
The reason fiscal conservatives compare government to business is that the only feedback a company has to know if it runs efficiently is it’s profit!
That’s a real problem, too. Telling the National Park Service to “run a profit” makes absolutely no sense. Should they install amusement park rides? Cut down all the trees if that’s a more productive use? Sometimes the obsessive focus on “profits” ignores other values in why we keep certain services running or why we fund certain services in the first place. HOWEVER, even though the purpose of these things is to not “make profits,” the programs should be run cheaply. That’s a no-brainer.
The point is the government should run on a balanced budget because when they fail to meet their budget, it’s you and I who pick up the slack (by paying higher and higher taxes for less and less service).
Agreed. But it’s Democrats who have been the best stewards of the federal government’s expenditures. The numbers simply don’t lie. Former Reagan and Bush I administration guy Bruce Barlett makes that point in his latest book: in past, Conservatives were obsessed with balanced budgets (which is awesome). Now, conservatives are obsessed with tax cutting (which ignores tax revenues). He thinks this is a horrible, horrible development in our politics.
The answer is we can’t and therefore they should be involved in as few, and little projects as possible.
But that’s not the answer. The answer is that we should constantly improve things and make them run cheap and effectively (just as we would do in a business).
The rules of economics are fundamental, like laws of nature.
It depends what we’re talking about here. If you’re saying that these laws are some gravitational pull toward free markets, that’d be incorrect. There’s a pull toward making money, and all the negative things that comes with that (manipulating markets; dumping as many costs on to the public as possible; or whatever). The state is in charge of getting people to compete more freely (trust-busting, etc).
Even though totally free markets everywhere will never happen, they can still teach us valuable things. I’d say the rules of economics are fundamental in helping to describe variations between economies and the decisions within them. In that way they’re fundamental; not as some magical force which cannot be stopped.
By the way, any arguments that government acting like a business (or worse, when people say that it should be like a “family on a budget”), are seriously misguided. The government freaking controls the supply of money, can run a huge deficit, can set interest rates, etc. That’s some serious power — it determines our money’s worth, and impacts all sorts of huge business decisions. Bottom line: it controls the rules of the game
I’m horrified by this description of government! The government shouldn’t be run on a budget? You admit that the government controls the money supply and consequently the value of money, and yet you’re in favor of them printing more and more dollars in deficit spending? How does this make any logical sense?
Yes, the government is on a budget, it gets X amount in taxes they should spend no more than X money per year. Why is that such a hard concept to understand? the ONLY source of money they have is taxes. That means any loans they take (or deficit spending they do) is an implicit tax on the people. WE will be paying back the interest on that money!
You admit that “Everything should be run efficiently” but how is that measured in systems that don’t turn a profit? The reason fiscal conservatives compare government to business is that the only feedback a company has to know if it runs efficiently is it’s profit!
You’re right that education doesn’t turn a dime – nor should the government be running it. Parks and national forests could and should be run at a break even point. If government was to be run efficiently then it would be debt free and spending exactly what it “makes” on taxes. But that’s never the case. Huge bureaucracies turn programs into spending hogs where the dollars don’t all reach the desired goal. For example cash for clunkers was estimated by Edmonds.com to have spent $24,000 for each new car purchased, but the consumer only saw $3,500 of that. Where did the rest go?
The point is the government should run on a balanced budget because when they fail to meet their budget, it’s you and I who pick up the slack (by paying higher and higher taxes for less and less service). Explain to me where your “market externalities” come into play there? How can we make incentives for the government to run efficiently? The answer is we can’t and therefore they should be involved in as few, and little projects as possible.
As for government controlling all the rules of the game: HAH! They might control the major variables, but the RULES are still the RULES. When you print more fiat money: Inflation occurs. When you distort the interest rate, malinvestments and bubbles occur. You might as well say: “Because I have this 10 ton hammer, I control all the rules of gravity.” The rules of economics are fundamental, like laws of nature. We constricted the Mississippi for years and controlled its flow, until it decided to overflow it’s banks and destroy towns & property, etc. Yes, you can trick the laws, but, not forever – eventually they come back and bite you!
our government’s notorious track record of inability to “turn a profit” with the much more successful private corporate sector’s success at turning a profit.
But that’s what I’m questioning: some programs are designed to “turn a profit.” Others are enacted because the public values parks, public education, or whatever — apart from those services’ ability to “turn a profit.” Everything should be run efficiently, but making a profit makes no sense when some services aren’t aiming for that. It’s too much of a broad generalization to say “all of government must turn a profit” when some “profits” aren’t measured in dollar signs (student’s education isn’t “making money,” Yellowstone isn’t aiming to bring in huge bucks, etc)
“A rising tide (in the economy) lifts all boats.”
I don’t disagree with that! I don’t think government’s always the answer or always not the answer. Ideology blinds us to policy solutions: for instance, your comment that
through their own entrepreneurial initiatives when they graduate instead of … unemployment rates where individuals and corporations are taxed too much to hire new people or buy new goods?
is correct … but only right now. Taking into account tax rebates and cuts, the US has a really, really low tax incidence for businesses compared to the world. However, that doesn’t matter right now because we need tax breaks and spending to grow us out of recession. And that’s what we got with the stimulus — tons of tax breaks. And, just because there is a enormous deficit now does not mean there will be a deficit forever. We need deficits immediately to spur growth and stop the death spiral; but we should quickly eliminate deficits later (as Clinton did) when the largest recession since WW2 is long gone. These things shouldn’t depend on talking points or who’s in power, they should depend on what our economy needs at the moment.
By the way, any arguments that government acting like a business (or worse, when people say that it should be like a “family on a budget”), are seriously misguided. The government freaking controls the supply of money, can run a huge deficit, can set interest rates, etc. That’s some serious power — it determines our money’s worth, and impacts all sorts of huge business decisions. Bottom line: it controls the rules of the game, as determined by you and me through our representatives. Efficiency’s good and all, but pitting “government versus business” doesn’t make much sense when all that’s taken into account. It’s more “how can certain programs be run more efficiently?” Asked this way, “government” isn’t the enemy to always be opposed, by a powerful (but difficult) tool to efficiently solve huge issues.
I wonder if “aguy” has ever had to make a payroll or run his own business, particularly during a recession like we’re in now. If he had, he probably would comprehend the logical idea Katie raises of comparing our government’s notorious track record of inability to “turn a profit” with the much more successful private corporate sector’s success at turning a profit. The government is not set up to create jobs through accumulating debt, http://www.naturalnews.com/025554_debt_wealth_food.html. Taxing people to the point where their cost of living goes up significantly, as cap-and-trade legislation would, is a sad way to get our country’s economy rolling again. Former President, John F. Kennedy, said it best: “A rising tide (in the economy) lifts all boats.” He didn’t say, “A growing government lifts all boats.”
Wouldn’t it be awesome if America could present young people in college with the chance to get us out of this recession through their own entrepreneurial initiatives when they graduate instead of offering them a dead economy with rising unemployment rates where individuals and corporations are taxed too much to hire new people or buy new goods? 70% of our GDP comes from consumer spending, so I think it would be a good idea, like Katie says, if the government acted more like a business and less like a wasteful spender itself. If the government spends our money through taxation, no one will be able to afford to purchase goods and keep the economy running.
Constitutional rights are constitutional rights — they are challenged under the Constitution. But, there’s plenty of things not falling under the Constitution that we don’t have a “right” to do — we can’t go 120 mph down 35W, we can’t sell McDonalds hamburgers with E Coli, etc. These are laws, enacted by our Congress, which is set up by the Constitution.
There’s no need for big bro Uncle Sam to jump in and try to oversee what will happen naturally.
Markets react to market pressures. If there’s no reason now — while CO2 is building up — for businesses and consumers to come up with solutions, then the market will not act. The market and the state are closer than you think — the state sets the lines for “out of bounds” and we all get to play the game. If the state does not set the bounds now, though, there will be no game to play.
National forests earn an average of 76 cents for every dollar spent – a net loss – under government management.
Not everything needs to run a profit. Do highways? Public schools? Nope. Comparing government back to business for each and every problem isn’t helpful. If the point of a government program is to be efficient, then business offers a great comparison. If the point of a government program is to provide fairness or a public good (forests, parks, water), then we usually don’t look to business — a bottom line is sometimes far different from the public good.