Congressman Chaffetz blowing hot air when it comes to cap and trade

Utah's freshman congressman has decided to use fear to attack President Obama's budget.  Specifically, Congressman Chaffetz implies on his web site  a proposed cap and trade system like one endorsed by Utah's Republican governor is contained within President Obama's 2010 budget and uses fuzzy math to describe the alleged cost to Utahns of this system. Cap and trade is a system already adopted by some states and industrialized nations requiring companies to purchase carbon permits auctioned off by the government.  Over time as companies become more efficient they end up with excess permits that can be sold for a profit to companies still emitting more carbon than the cap allows. 

In his long term budget projections President Obama predicts a cap and trade system will be in place beginning in 2012 and the auction of carbon permits will raise about $650 billion between 2012 and 2019.  Congressman Chaffetz claims "this massive new tax increase will destroy our hope of recovering from the current recession".  Apparently Congressman Chaffetz either believes this new "tax" is part of this year's budget or we will still be in this recession in 2012.  It isn't in this year's budget and it is extremely doubtful we will still be in a recession in 2012.   

But Chaffetz doesn't stop with frightening people about the imminent passage of this "massive new tax".  He goes on to misrepresent just how "massive" it would be.  According to the congressman "The data show this new tax will increase the average Utah family’s (3.08 people/household) annual electricity bill by $3,435.65 or by nearly $290 per month."  He claims this adds up to a more than $3 billion dollar annual cumulative tax increase for Utah.  If this were true Utah's roughly 1% of the US population would be paying more than 3% of the annual cap and trade burden passed on to consumers. 

To come up with these truly frightening numbers Chaffetz relies on a table that assumes carbon permits auctioned off under a cap and trade system would cost $85 per ton of carbon emitted.  This figure is "based on the Stern Review's recommended carbon price of $85 per ton".  I don't know what "Stern Review" is, but shouldn't we be basing our analysis on the Obama administration's projections?  I guess not if the whole point is to scare the heck out of people.

According to an article contained within that infamous liberal rag "BusinessWeek", Obama's cap and trade proposal for 2012 and beyond assumes carbon permits would auction for about "$13 to $20 per ton". The BusinessWeek article goes on to state the average increase in energy costs for the American consumer would be around 7%, far below the staggering increases Chaffetz projects. That 7% average increase predicted in BusinessWeek does not take into account the fact most of this money would be returned to the public in the form of tax cuts under President Obama's proposal. 

Finally, as usual when it comes to Republican cost benefit analyses dealing with energy efficiency, only the initial costs of improving efficiency are considered and not the savings to consumers that result from improved efficiency over time or the jobs created as companies take steps to improve efficiency.  There is no evidence anywhere in his statement on cap and trade Chaffetz considers these beneficial impacts to Utah's economy.  Given he is on record denying global warming it would have been too much to ask he consider the benefits to our air or environment generally and I can't say I am surprised.

A new way of budgeting

Apparently Republican Congressional leaders have forgotten George W. Bush's definition of a budget.  You know, that a budget "has a lot of numbers in it." 

In response to President Obama's call for Republicans to put up or shut up, they put up a budget with no numbers in it.  President Bush, for all his faults, never would have made that mistake.  After all when doing fuzzy math you need to include some numbers, even if they don't all add up in the end.

Oh well. Better luck next time.

UDP News Release: State Party Vice Chair Encourages Activists to “Get Local”

Salt Lake City, UT— State Party Vice Chair Rob Miller is announcing that he will be seeking to be elected as the Chair of the Davis County Democratic Party at the Davis County Democratic Party Convention to be held at Centerville Jr. High School located at 625 South Main Street in Centerville, Utah. The convention will be held on Saturday, April 18 beginning at 11:00 AM.

“It has been my pleasure to serve the Utah State Democratic Party for the past four years, and I want to continue to do so in a different capacity as Chair of the Davis County Party,” said Rob Miller. “Local action is where it’s at these days. Democrats are ready to govern and I want the voters in Davis County to know that. Davis County has faced increased property taxes, environmental hazards, overcrowding, transportation and a host of other issues. Our current elected officials have failed us. I want to lead the change to a better way of doing things that is more responsive to our citizens.”

“The best example I know of is in North Salt Lake where there are homes being destroyed in slow motion. The Mayor and City Council have not been responsible. There has been no declaration of disaster, no request for grants from the Recovery package that Congress and President Obama signed into law. This is a shame. There are resources out there to help our citizens, and pure partisanship is standing in the way of getting these good people some help,” said Miller.

Wayne Holland, Chair of the Utah Democratic Party, said, “The county level is where the good talent is going these days. It is where you can really make a difference. Richard Davis showed the way in Utah County with significant gains. With Rob Miller in Davis and Steve Olsen in Weber County this dynamic duo will make a big difference in the ‘top-of-Utah’. I couldn’t be more pleased than to have an expanding base that demands top-tier leadership. Democrats have seen some solid growth in Salt Lake County over the past decade. We will work to hold onto that, but we now have the talent to bring the fight in a significant way to other communities.”

J. Dell Holbrook, former Davis County Commissioner and the last Democratic elected in Davis County, said, “Rob’s public relations, marketing and organizational skills make him uniquely qualified to lead us at this time. I’m proud to endorse him for this job and to chair his campaign for this spot.”

Rob Miller said, “Chairman Holland has been telling delegates statewide that we need to be ready to govern. This is my goal with Davis County: to prepare for 2010 and 2012 when Utah Democrats will have the opportunity to elect some statewide officers. I am ready to work and we need to step up and make it happen.”

Blame and Bonuses

First of all let me say I share the anger everyone rightly feels over the fact anyone might get even a $1 bonus, let alone a million or more, after screwing up on the scale the folks at AIG did. The fact our tax dollars are involved amounts to pouring salt in an open wound.

Having said that, the reaction to the AIG bonuses does make me a little bit nervous. Too much focus seems to be on who is to blame rather than what is to blame. Everyone can find someone - Republican or Democrat, member of the Bush administration or someone in the new administration - that could have caught the contract at the center of the current controversy sooner, put more pressure on AIG to renegotiate it, or found some legal way out of it altogether.

Accountability is important, and as President Obama said today so far as the administration's handling of this goes the buck stops with him. However, he also said something else of far more consequence I fear may get drowned out in all the outrage being expressed; the anger we all feel today needs to be turned into a force for constructive reform down the road.

People tend to behave one of two ways in circumstances like this: 1) They demand someone's head and then go back to their daily routines once they have it, or; 2) Calm down after the immediate focus of public anger has gone away, in this case after the money is returned - assuming it is. In either case the underlying problem that should be the focus of everybody's rage never really gets addressed.

Whatever failure specific public and private officials may need to take responsibility for in this case, the whole AIG bonus fiasco ultimately isn't the fault of any one person but of a failed ideology. Big corporations have been giving huge bonuses including golden parachutes to failed executives for years now. The contract at the center of this blow up was put in place before a single taxpayer dollar was given to AIG and was standard procedure for large corporations at the time. Where was the public outrage then?

The ideology behind such bonuses was a laissez faire, free market, deregulatory philosophy that preached government had no business sticking its nose into business, least of all how executives were compensated. If we think back just a year or two the notion the government should discourage, let alone prohibit outright, huge bonuses to the heads of companies that were under-performing would have been almost unthinkable.

Funny thing is, those preaching this laissez faire, deregulatory notion of free market capitalism were also telling us government should butt out because a truly free unregulated market rewarded success and punished failure all by itself. Government regulation or oversight only mucked things up. Well obviously if that had been true AIG and countless other companies never would have written contracts that mandated bonuses regardless of performance.

So be mad as hell at those receiving these bonuses, the company that signed the contract that led to these bonuses, and politicians that intentionally or unintentionally let this particular contract slip by them. But if at the end of the day your anger stops there it is wasted energy. We should also be angry at ourselves for believing for the better part of three decades a free market somehow regulated itself. We should turn our anger into a movement for well thought out reasonable reforms that ensure American capitalism truly rewards hard work and good ideas but never again rewards greed for its own sake.

Congressman Bishop "may call soon"... or not

   Congressman Rob Bishop just sent out a mailer attacking the recently passed recovery package, offering vague references to an "alternative" he would have rather seen pass, and letting those he represents know just how important it was to him to stay "connected to constituents." 

To that end, Congressman Bishop indicated in the mailer "One of the main purposes of this mailer is to let you know that over the next couple of weeks Rob will be hosting multiple town halls over the telephone, so he may be calling you and others in your area soon!"  How nice of the Congressman to indicate his willingness to pre-select people to call for a town hall meeting over the phone without even bothering to tell people exactly when the call might occur. 

If Congressman Bishop really wanted our opinion on issues, wouldn't he provide us with a date, time and a phone number we could call to share our concerns?  Calling what will almost certainly be a list of friendly Republican constituents at an undisclosed time and date so even they can't plan on being home to take the call hardly shouts "I care what you think!!" 

According to the mailer Congressman Bishop will be using your tax dollars again shortly to send out another mailer "announcing a series of regular in-person town hall meetings throughout northern Utah"  to be held in April.  Presumably in that mailing he will tell us when and where those meetings will be held.

Utah County's Legislators

This morning in the State House chambers a drama played out on SB239 that demonstrates what is terribly wrong with the members from Utah County.

The chief purpose of the bill is to fund I-15 reconstruction through Utah County – a main objective of Utah County legislators. The bill would hike car registration fees by $20 -- a horrible regressive tax that ill serves Utahns.

Utah County members voted against the bill to oppose tax increases. Fair enough. But they still want the benefit.

They are hypocrites that ask us to allow them to be ideologically pure but do not fail to provide for the pragmatic needs of our community. It is a position held for decades going back to the founding of the Utah Transit Authority. The irresponsibility of Utah County legislators has led to more stalemates on good transportation planning in Utah than any lawsuit by environmental groups.

Bob Bernick of the Deseret News reports that House Speaker Dave Clark left the vote open for 20 minutes, and even walked off the floor while the vote was open, because most of the Utah County delegation was voting against it. After it was voted down, Clark called for a caucus. But the Utah County representatives wouldn't even attend the caucus, going off to talk among themselves. Clark, glowering when he didn't see the Utah County delegation attend, then called the House back on the floor to continue work on other matters. House Majority Leader Kevin Garn said that tens of thousands of jobs would be lost and Utah's economic infrastructure greatly harmed if I-15 in Utah County were not built.

Utah County legislators are not part of the solution. They are the problem. The citizens of Utah and Utah County deserve much better.

Shame on them!

(Note: Seven hours after their tantrum of the morning, they came back to reconsider the bill. Goody, now we get a tax increase in the middle of a recession.)

Chairman Holland: Obama's budget both necessary and good for America

The following was submitted by Chairman Holland to newspapers throughout Utah on March 1, 2009

Americans are facing the most serious financial crisis since the 1930s. Job losses have totaled more than 3.5 million since January of 2008, with fully a third coming since December of last year.

This crisis didn’t appear over night and our recovery will take time. Median household incomes declined over the past eight years and more Americans have fallen into the ranks of the uninsured or underinsured during that time as well. Families that would have preferred to save for their children’s college education or for retirement were instead forced to use credit cards to meet the needs of their family and now the chickens have come home to roost.

Given these difficulties we face a choice. As our president points out in the conclusion of his recently released budget “We can put off for tomorrow what must be done today” or “We can jumpstart our economy and create or save millions of jobs. We can invest now to address the long-term drags on our economic competitiveness.”

We can choose to put off reducing the $2.2 trillion infrastructure maintenance backlog, put off building a more energy efficient economy and put off real health care reform because, as some argue, America just can’t afford to deal with these lingering problems right now. Or we can choose to invest now in jobs that will strengthen our infrastructure, reduce our reliance on foreign fossil fuels, enhance our children’s educational opportunities and expand access to affordable healthcare. These investments will pay far greater dividends in the long run than they will cost.

Most of our congressional delegation has chosen to argue, their party’s record not withstanding, now is the time to become “fiscally responsible.” In other words, when faced with the worst economic downturn in more than half a century fueled by plummeting demand the government should join the credit markets and struggling families and stop spending. They argue if the only entity left that can increase demand stops spending money too somehow our problems will be over.

When the government takes out a loan, it is worth asking whether what they want to spend that loan on will pay dividends in the future. If not, we most certainly shouldn’t borrow the money. However, if spending is necessary to recover from a serious economic downturn and we have lots of worthwhile things to invest in, the question of whether to invest should be moot.

We have highways and bridges to maintain or build, wind farms to construct, homes to weatherize and inefficient buildings to retrofit just to name a few of the worthwhile projects out there. All of these will pay off in the future by saving families money on their energy bills, reducing our reliance on foreign oil, create millions of jobs and lead to the development of new, cleaner technologies.

We also have children whose development doesn’t stop just because the credit market has. Educational opportunities lost during the early years of childhood are educational opportunities lost for life. Similarly, seniors dependent on programs like meals on wheels are no less hungry because the program was cut in the name of “fiscal responsibility.” This and other important programs are essential to their well being.

Americans rightfully ask themselves what they got out of the $5 trillion borrowed over the past eight years while Republicans were silent on the morality of what they now term “generational theft.” Our economy is no more efficient, healthcare is less affordable, and higher education costs have skyrocketed in spite of all the money borrowed during years of Republican control in Washington.

In spite of the skepticism the record of the past years generate, we can build a better tomorrow for our children and grandchildren. President Obama has committed to posting all spending online and has invited Americans to scrutinize the decisions being made in Washington. He has committed to investing this money in projects that will create needed jobs and enhance our economic and national security in the long-term. This isn’t about big government vs. small government. Its about government that works.

We won’t get out of this crisis by relying on the same old short-term quarterly thinking that go us into it. Nor will we get out by listening to those that borrowed and spent record amounts and have little to nothing to show for it. We will pull ourselves out of the recession and create a more innovative, efficient and educated America in the progress by making the investments we have delayed for too long.

Payday lenders have nothing to fear from Utah Republicans

  Representative Laura Black (D) - Sandy, introduced legislation to cap the interest on a payday loan at 100%. That attempt died in committee on Tuesday, March 3, 2009 on a party line vote. 

The average payday lender in Utah currently charges more than 500% annually!  Who takes out payday loans?  Those struggling to make ends meet, that's who.  The rich, or even members of the middle class, don't take out payday loans.  Those living paycheck to paycheck and coming up against a medical or other emergency take out payday loans. 

During the hearing Christopher Peterson of the University of Utah Law school testified "Two-hundred and fifty percent was the average of a New York mafia shark loan."  Therefore, there are two differences between a payday lending institution and a loan shark: 1) Loan sharks are considerably cheaper, and; 2) Payday lenders are legal and loan sharks are not.

Given the mess created by subprime lending, one would think any institution charging more than 500% to the poor for a loan would receive a cooler reception on Capitol Hill.  The economic lessons of this kind of lending should be obvious to everyone by now. Unfortunately, these lessons are still lost on many.