How Does He Do This With A Straight Face?

I already in a previous post deconstructed Kevin Drum and Joe Romm's critique of the carbon tax.  One reason they don't like the carbon tax is:

Well, for one, it doesn't have mandatory targets and timetables.  Thus it doesn't guarantee specific emissions results and thus doesn't guarantee specific climate benefits.  Perhaps more important, it doesn't allow us to join the other nations of the world in setting science-based targets and timetables.  Also, a tax lacks all of the key complementary measures "” many of which are in Waxman-Markey "” that are essential to any rational climate policy, but which inherently complicate any comprehensive energy and climate bill.

What they are basically arguing is that a carbon tax works by hundreds of millions of individuals making decisions in reaction to higher prices, and chosing their own way to reduce carbon production.  They don't trust this kind of bottom up chaos, despite the fact this is how our entire economy and society works, except for a few corners where beltway guys live and breath in their own reality.  They want a few "scientific" guys at the top picking winners and subsidizing technologies and particular approaches.

I described why I disagreed with this  (or you could spend some time with Hayek to really understand why it is wrong) but I found it staggering that the very next post from Kevin Drum in my feed reader was this one:

Via the LA Times, this is the best news I've heard all day:

The Obama administration on Tuesday proposed renewable fuel standards that could reduce the $3 billion a year in federal tax breaks given to producers of corn-based ethanol. The move sets the stage for a major battle between Midwest grain producers and environmentalists who say the gasoline additive actually worsens global warming.

....While biofuels as a whole "” including grasses and even algae "” are considered promising alternatives to petroleum, some researchers have begun challenging the use of corn for this purpose.

In particular, they point to the "indirect land-use" effects of pulling corn out of the world food supply, which could force farmers in developing nations to clear rain forests "” and release massive amounts of carbon dioxide in the process "” in order to plant corn.

Please dump the corn ethanol subsidies.  Please, please, please.  Dollar for dollar, it might well be the stupidest use of taxpayer cash in the entire federal budget.

Since ethanol is the largest example of Congress's past attempts to set "rational climate policy," what in the hell gives Drum confidence things are going to be any different in the future?  It is yet another example of technocratic planners arguing that the failure is not top-down planning, just the particular individuals doing the planning.  If only my guys did the planning, things would be different.  Right.

Besides, it was a Democratic Congress that passed the last round of ethanol subsidy increases and a Democratic Congress that is upping them again.  So it is Drum's guys doing the planning, and they are making a hash out of it, as all planners do.

For the record, I don't want my guys in DC doing the planning.  I want 300 million people making their own damn choices.  When did this ever stop being a liberal value?


  1. Les:

    A fitting analogy I think to the top-down leadership style's failure and the failure of those who endorse it to recognize said failure would be...

    ...imagine someone wanted to build a dirigible and fly around the world, then they reason, "Hmmm.. Hydrogen is lighter than air, water is two parts hydrogen to one part oxygen, water is much cheeper than Helium, therefor I should be able to fill my dirigible with water and fly around the world!"

    And then the thing just sits there like a beached whale on the tarmac, so this someone blames the ground-crews. "It's all their fault, we just need some fresh blood in the ground-crew sector then we'll really see some results." When what he should have done was go to the manufacturer and say, "I want a dirigible that can fly around the world, I'll leave you to muddle-out the details."

  2. Henry Bowman:

    The frightening reality is that the folks in charge now (the Dems) have always believed that the USSR was a really great experiment that somehow the folks in charge didn't get quite right. Top-down planning is the way to go in the minds of these folks. This time, they believe, we'll get it right.

    Seriously, that is exactly what these people believe. Truly, we have lunatics running the country.

  3. Les:

    The desire for top-down hierarchy is natural, it's imbedded in our psyche from the first day we figured out as a species just how mind-boggling usefull opposable thumbs were.

    The problem is, we're also wired to love our friends and family and immediate acquaintances like we would ourselves, and to hell iwth everyone else. Dunbar's number in action, and it plays merry hell with any attempt at specifically guide a large nation-state in any but the most vague and general ways. Yet, people still insist on trying to implement a top-down government strategy like their caveman hind-brains tell them they should despite all the evidence that it just doesn't scale-up that well.

  4. kebko:

    Kevin Drum will probably be relatively pleased with the outcome, because it's not very satisfying to have millions of faceless, self-interested actors solve your problems for you. But it is satisfying to go vote or protest with some self-righteous idea. You know you did your part, and you fought for what's right with like minded people. And, for all eternity, you can sit & complain over lattes about all the stupid voters & politicians that screwed up your great plans.
    Why would someone ever give that up? It's one of the reasons public schools are so popular. When you have to go to a heated public meeting because the school board decided to cut music funding, you and your neighbors leave with a renewed sense of community concern & togetherness. You never get that from a charter school that just educates your kid in such a way that you want to keep attending.

  5. Pieter:

    The carbon taxes that I'm aware of are fixed price taxes per ton of carbon emissions. I can imagine no other setting in which coyote (and other commenters) would prefer the government to set a fixed price rather than let the market determine the price of a scarce resource. In this case, the resource is carbon emissions that can be absorbed by the atmosphere.

    I was going to write a long paragraph about how much better it would be if prices for carbon emissions dropped when emissions dropped, because of a weak economy or improved technology, etc, but you believe in markets finding the right price more than I do, so I'm going to skip it.

    Not only does the cap-and-trade scheme provide better incentives to innovate, but the market price provides better information about the current effect of the scheme. Suppose a carbon tax was implemented, the economy grew and pollution remained about the same. Would this mean that the tax was too low to control emissions or simply that the growth of the economy was offsetting improved efficiency? What if the economy contracted, as it is currently? Would this mean that the tax was too high, or was the downturn just one of the normal bust phases of capitalism? There'd be no way to tell. Under cap and trade, if the economy started to contract, while prices grew, it would show the cap was too low, since unmet demand for activities generating emissions was limiting the economy. On the other hand, if prices fell at the same time as the economy, it would demonstrate that the cause of the recession was not the pricing of emissions, but some other effect.

    If you believed in global warming and had a libertarian philosophy, I have a hard time imagining what system you'd prefer to a cap-and-trade scheme in which the market sets the cost of emissions. If there's another system that you think can better cover the costs of a negative externality, I'd be interested to hear it. Till then, I can't help but think that, since you don't believe global warming is a problem, you'd prefer a regular sales tax to a system designed to significantly change consumption patterns.