Everyone wants a free lunch, and some people even believe it exists. Julia Gillard is playing to that crowd, offering the impossible. Somehow, we will cool world temperatures while using some of the most expensive forms of energy we can find, and, wait for it, most Australians will become better off too. It’s money for nothing.
Why we didn’t do this years ago?
Quotes from wise men tell us that there is nothing new under the sun, and those who forget history are condemned…
“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years.”
Possibly, Alexander Tytler (circa late 1700′s)
“Great nations rise and fall. The people go from bondage to spiritual truth, to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage.”
Henning Webb Prentis, Jr., President of the Armstrong Cork Company 1943
Are we at the “apathy stage” or is this “dependence”?
Faced with paying $500 a year per house for no measurable benefit, only a few percent of the population seem to realize that it’s worth investigating the reasons, the evidence, or taking the effort of actually protesting. Few large businesses will benefit from the “tax” (aside from the financial broking houses, and the renewable industry) and those businesses that are about to be whacked are waking up slowly, but ought to have been fighting this last year.
The cost of this ill-begotten fairyland plan is estimated by Lord Monckton to be 22 times the maximum estimate of the welfare loss from doing nothing about the climate. It’s got all the good value of paying $220,000 to insure your $10,000 car. Only a socialist could call this a free market solution. Only a Green could call this an investment: Greens deputy leader Christine Milne said the dedicated funding represented the biggest single investment in renewable energy Australia has ever made.
Remember the deadly price of “opportunity cost”? The ALP are effectively taking $10 billion from schools, roads and medical research and pouring it into renewables “clean” schemes. It doesn’t have to be this way.
Unelected bureaucrats will be redistributing your wealth
The Government plans to set up another “independent” agency to promote renewable energy. The price on carbon is not enough to actually help those pathetic uneconomic technologies, so the “free market” fans in the government have to do some artificial subsidizing as well. And if they hand those decisions to an “independent” body, whatever that means, it means you and I won’t be able to vote those “managers” of our tax funds out of office if they pink-batts-it-up. The government is supposed to be responsible for the decisions. This way, if it’s a wild success they will take the cred, but if it fails badly, Gillard and co will blame the agency. Handy way to avoid accountability.
The high frequency traders are partying
Andy Semple at Menzies House notices another “fixed” fake part of the “free market” we have to have.
What isn’t getting a lot of attention is the fact that the Government has also set a Minimum price of $15 per tonne of Carbon Dioxide once the ETS starts. In other words, the Government is guaranteeing a Put option of $15 for the first 3 years of the ETS.
Just imagine the amount of speculation in NAB shares if there was such a government price guarantee.
Semple also notes the arbitrage possibilities given that the current Euro scheme price is so much lower that our $23 per ton.
Just watch the Martin Place Wizards construct some derivative contract that will allow them go short the Australian contract price and long the ECX futures contract. If there is a way to arbitrage even a penny, these dudes will find away.
No wonder all the four big banks are drooling about futures trading
Avoiding the road to bondage
The quoted passage from Prentice is known as “the fatal sequence”, and the only good news is that we don’t have to stay on the road to bondage. The message about the real science and economics is spreading from BBQ to BBQ, dinner to dinner, through letters to the editors, and through phone calls to radio stations. Information is our friend, and when it comes down to it, we can do it without the lamestream media, and the ABC. They can rubber-stamp the government PR, and union sponsored activists can try to cancel speeches that might reveal the truth, but these distant messengers don’t come between family and friends.
Word-of-mouth spreads the story with an exponential growth curve. There’s a one way stream of people leaving the “carbon faith” and shifting to skepticism, there’s virtually no flow the other way.
Sooner or later the hard rock meets the immovable force and when 70% of the country know that the tax is a lie, based on deceit, wallowing in corruption and plastered with vested interests it will be all over — all over for the tax, all over for Labor Party credibility, all over for the witchdoctors who think they can change the weather.
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