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is still a raw deal. The Wall Street Journal does a great job of breaking down what's really going on behind the smoke and mirrors of the new "American Power Act."
Myth #1: This isn't cap and trade.
Except that it is.
Jim Lucier, an investment analyst at Capital Alpha Partners, calls it the Mr. Potato Head bill. The cosmetic features can be rearranged, but it's still a Mr. Potato Head. This is still cap and tax—except with new and larger subsidies, outright corporate bribes, and the rest of the political palm-greasing that Democrats hope can still lead to a Rose Garden ceremony this year.
Myth #2: There's no gas tax.
Except for the gas tax.
Producers and importers of gasoline and jet fuel, for example, would be cordoned off from the wider carbon-permit auctions and instead buy separate, nontradable allowances pegged to the fixed price at which the auction closes. The technical term for this is a "linked fee," but consumers are unlikely to observe the distinction when pump prices rise under this de facto gas tax.
"There is no gas tax, never was a gas tax, will not be a gas tax, I don't know where that came from, but it is just wrong. Period," Mr. Kerry rumbled at a press conference in late April. "There is not even a linked fee, there is not a tax, there is nothing similar." No, except for the gas tax that dare not speak its name.
Myth #3: Big Business is standing in the way of these climate initiatives.
Quite the contrary, big business is lining up behind the cap and trade bill because they've been able to carve out special, taxpayer funded favors. And besides, what corporation wouldn't sign on to anything that makes it the law to buy their expensive new products or carbon offsets?
Big business is on board for the subsidies, and even the Chamber of Commerce had kind words for this "work in progress." The bill landed with endorsements from such luminaries as John Doerr, a Kleiner Perkins venture capitalist and Al Gore's business partner; John Rowe, the CEO of the nuclear utility Exelon; and Jeff Immelt, CEO of General Electric. Every business or interest that could afford a half-competent lobbyist stands to benefit, at least until cap and tax is in place and environmentalists crack down over time.
Myth #4: No one will get hurt.
The left likes to herald this sort of legislation as a new dawn for green technology and the bazillions of magical jobs that will come with it. I'd like to know if those new jobs will be exactly equal to all those that are lost as businesses go overseas and small businesses crumple under the new massive costs to do business.
Energy politics splits on geographic more than partisan lines, and the folks in the hinterlands who rely on coal-fired power and heavy manufacturing will get socked the hardest.
Myth #5: It's worth it!
This will surely clean up the environment, right? Except it won't.
Oh, and since America is not a planet, Kerry-Lieberman will have little to no effect on global CO2 concentrations as the Chinese, Indian and Brazilian economies expand. But the bill would impose carbon tariffs on countries that don't adopt similar restrictions, likely leading to a trade war.
Myth #6: This monster won't pass.
Think there's no political will to take on such controversial measure with elections just around the corner? Think again.
The Beltway wisdom says this combination of corporate welfare and economic destruction has little chance to pass this year, but don't be so sure. The left and Mr. Obama know their supermajorities are about to vanish, and they are ideologically willful enough to make one more effort to jam this through the Senate.
And besides, with so many pending retirements, it's hard to think of what could reign in many legislators who won't have to suffer the electoral consequences of their votes. They'll probably get plumb jobs on the corporate boards they got special favors for.