The Hood Robin Syndrome

Guest Post by Willis Eschenbach

There’s a new study out, under the imprimatur of the Energy Institute of the Haas School of Business in Berkeley, California, entitled The Distributional Effects of U.S. Clean Energy Tax Credits.  As the title implies, it looks at who actually profited from the various “green energy” tax credits across the United States. SPOILER ALERT! It wasn’t the poor folks.

How much money are we talking about? Well, the paper says that from 2006 to 2012, the taxpayers have been on the hook for $18 BILLION DOLLARS to fund these subsidies, money that would have otherwise gone into the General Fund.

And just how much money is eighteen billion dollars? Here’s one way to think about eighteen gigabucks, regarding safe, clean drinking water.

Water Wells for Africa reports from their ongoing projects that on average it has cost them about $3.50 per person ($7,000 per well serving 2,000 people) to provide people with clean safe well water. So eighteen billion dollars is enough money to drill drinking water wells for three-quarters of the world’s 7 billion inhabitants. (Yes, I know that’s a gross simplification, some folks don’t live over a subterranean water table, and so on, but it is still enough money to drill the two and a half million wells that would be needed.)

So what did we do with this huge amount of money, enough wealth to truly change the lives of the world’s poor?

Well, following the brilliant policies pushed by the Obama Administration and the climate alarmists, we took enough taxpayer money to truly change the lives of the world’s poor folks … and instead, we gave it to the American rich folks.

No kidding! This is not a joke. This is what passes for moral activism in the liberal American universe. Throwing money at the rich is seen as striking a noble blow for POSSIBLY saving the poor from a tenth of a degree of warming by 2100.

Sadly, it’s no joke at all—the whole war on carbon has been a tragedy for the poor. In this case, the result of these misguided tax subsidies, of the type which have been pushed by climate alarmists for years, has been to create a real climate “hockeystick”. Here is the data from their paper:

the hood robin syndromeFigure 1. Distribution of benefits of the “Clean Energy Tax Credits” by the income class of the benefit recipient for the period 2006-2012. All values are percentages of the given benefit. “Residential” is subsidies for residential solar systems and weatherization. “Hybrid” are the subsidies paid to the owners of hybrids, as well as hydrogen, fuel cell and natural gas vehicles. “Electric Vehicle” is the subsidy paid to the pure electric vehicles like the Tesla, Leaf, and Volt.

Note that in all cases, the bottom half of the income scale got 4% or less of the benefits …

Look, if someone wants to fight the claimed evil menace of CO2, that’s their business.

And when they want to justify it on the basis that to them, it is a deed most noble and virtuous to be POSSIBLY helping the poor in 2050 by POSSIBLY reducing the future global average temperature by a few tenths of a degree … well, I gotta say that’s as dumb as a bag of ball bearings, but there’s no law against dumb.

But that’s just for starters. From there, it gets ugly fast. Tragically the preferred method of fighting evil carbon is to increase the cost of energy, which is an extremely regressive tax. Not only is it regressive, but unlike many taxes, there is no escape at the bottom of the income scale from increased energy costs. The poor pay no income tax, but they pay energy costs, and energy costs are a greater portion of their expenses than for the rich. So rather than going down with decreasing income, the effect of hikes in energy costs go UP with decreasing income. Like I said, it is among the most regressive,inescapable kinds of taxes you could design.

Raising energy costs sentence the global poor to further impoverishment, sickness, and even death. And hiking energy prices based on the pathetic justification of a POSSIBLE cooling by 2050 of a few tenths of a degree is a crime against the poor of unimaginable size and ubiquitous effect. The war on carbon literally hurts, sickens, and kills poor people all over the world. And I can assure you … the poor are not amused.

But I guess that merely shafting the poor by increasing energy costs doesn’t help the rich enough. So the other noble and virtuous method for POSSIBLY helping the future poor is to fling tax money at various pluted bloatocrats … yeah, that’s the ticket. We’ll help the poor in 2050 by making it easier for rich people to buy a new $100,000 Tesla, and meanwhile Elon Musk is laughing all the way to the bank … at this point, we have to wonder how much folks like Al Gore and Warren Buffet and the UN Climate Ambassador Leonardo Dicaprio had to do with the design of these tax subsidies for the rich.

And of course, these are just the income tax subsidies. They don’t include the massive subsidies handed out directly to the solar and wind industries. They don’t include the subsidies paid to the people wealthy enough to justify rooftop solar when the utilities have to buy their electric production at three times market value … or the cost that I and millions of others pay as electrical consumers to subsidize those over-the-top rooftop solar payments. They don’t include the cost of Solyndra and the other solar companies slurping at the public trough. They don’t include the millions of dollars that with one stroke of the pen Obama gave to his billionaire pal Warren Buffet by vetoing the Keystone pipeline. This is merely the Federal tax-related subsidies, nothing more … and this tiny part of the global waste in the war on carbon is eighteen billion freakin’ dollars.

But always remember … this is all being justified by the alarmists on the basis of “Think of the grandchildren”, and because they’re saving the planet from imminent doooom and destruction.

And if you are someone saving the planet from imminent doooom and destruction, well, you are the man. There is no action that you shouldn’t take if it is in the service of your noble cause. You know that you have right on your side, you’re preventing disaster. You know you are fighting the good fight to cool the fevered brows of those sweltering in the 2050 heat by at least a tenth of a degree, and that it is a fight that has to be fought if we are to save the very planet. Your strength is as the strength of ten because your heart is pure, and you have the moral high ground. As a result of all of that, there is no transgression you won’t commit in order to have other people pay to make your beautiful Elysian (and slightly-cooler) dream come to fruition … and meanwhile, let’s go for a spin in your new Tesla. After all, you only bought an electric car because it’s noble and virtuous and pollution-free … if you don’t count the coal-fired power plant providing your electricity.

I have a proposal for a new name for the Holocene, and it’s not the Anthropocene like some folks claim.

I think we should call it the Egoscene …

Regards to all,

w.

My Plea For Better Understanding: If you disagree with someone, please have the courtesy to quote the exact words you disagree with. This will allow all of us to understand precisely what you are objecting to.

About The Title: For those not up on their English history, Robin Hood was the name of a legendary English outlaw whose most notable characteristic was that he robbed from the rich and gave to the poor … hence my invention of the term“Hood Robin Syndrome” to describe the opposite action.

Fossil Fuel Subsidies: To me, the issue is never the existence of a subsidy. It is whether we get something for the subsidy. For example, one of the fossil-fuel subsidies in the US is the tax exemption for diesel used by farmers and fishermen … in exchange for which, it encourages production and so we get more food. To me, that’s a good deal. The problem with renewable subsidies is that we’ve been subsidizing solar and wind since Jimmy Carter was President, and they are still not economically competitive in the grid-scale marketplace.

We get large value in return for fossil fuel subsidies, whereas for solar and wind subsidies we get almost nothing. Per kilowatt-hour (kWh) of energy produced from solar and wind, there is a subsidy to the producers of about two cents/kWh. Since base electric price in the US is around 8-10 cents per kilowatt-hour, that’s about a 20% subsidy.

The subsidy for oil, on the other hand, is about a hundredth of one cent per kWh, coal is about two hundredths of a cent per kWh, and nuclear is about eight hundredths of a cent per kWh.

Why the huge disparity? It’s because solar and wind don’t produce economically, so they have to be artificially propped up. I wouldn’t mind the subsidy if they actually produced. It’s the lack of getting value in return that is the problem.

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Michael Jankowski
August 30, 2015 11:26 am

Willis,
At first glance, I am having trouble reconciling your Figure 1 with the Table 2 in the document…

RD
August 30, 2015 11:59 am

Great essay! Thanks.
Ready availability to basic infrastructure like clean water, electricity, etc. is very worthwhile. Extreme green misanthropes on the other hand want de-growth.

John A. Fleming
August 30, 2015 12:04 pm

You said “To me, the issue is never the existence of a subsidy. It is whether we get something for the subsidy.” All the facts for why subsidies are always bad, always create market distortions in unintended ways, are never a net plus, are well known. If this is what you believe, there little hope of convincing you otherwise.
I will say it simply, by analogy. Cash is a fact, profit is an opinion. The politicians attempt to convince you that you will profit by a subsidy, even while they take money out of your pocket and give it to themselves and their friends. You have this wierd belief that you can keep this corruption free. And just try and be the bearer of bad news that the market distortions outweigh the “public good”. The chumps don’t like it when they are reminded that they’ve been taken for fools by a bunch of grifters.
“Public good” is a “just so”story. You’re letting yourself be robbed. What’s worse, you all in your voting millions think I also must be robbed to pay for your schemes.
When you give the government the power to subsidize as you have in your deluded voting millions, you’re riding the tiger and think you won’t get eaten. Voters, they’re what’s for dinner.
When you’re for subsidies of any kind, you’re either one of the thieves, one of their allies, one of the chumps, or one of the “good” people who in the face of evil choose to do nothing.

Jaakko Kateenkorva
August 30, 2015 12:46 pm

Thank you Willis. How about calling it ‘King John syndrome’?

August 30, 2015 1:10 pm

I think we should call it the Egoscene

love it.

August 30, 2015 1:20 pm

the paper says that from 2006 to 2012, the taxpayers have been on the hook for $18 BILLION DOLLARS

18 bn in seven years is about 2.6 bn per year.
To put that in perspective, a 2010 study by the Clean Air Task Force estimated that air pollution from coal-fired power plants accounts for more than 13,000 premature deaths, 20,000 heart attacks, and 1.6 million lost workdays in the U.S. each year. The total monetary cost of these health impacts is over $100 billion
http://www.rmi.org/RFGraph-health_effects_from_US_power_plant_emissions
/Jan

Bruce Cobb
Reply to  Jan Kjetil Andersen
August 30, 2015 2:48 pm

Only a total fool would believe those agenda-driven, fact-free lies.

Reply to  Jan Kjetil Andersen
August 30, 2015 3:55 pm

So I assume you must be gung ho for nukes because it is overwhelmingly clear that wind and solar don’t cut it .
While I’m sure many here will respond with much more detailed knowledge , a few points must be considered .
0 : American health and lifespan has never been greater , and affordable energy and the technology and industry it enables has been by far the greatest single cause . Nor has the air ever been cleaner . Whatever the deleterious effects of current levels of the substances , they have been massively overwhelmed by the benefits of affordable power .
1 : All these elements are naturally occurring and are naturally occurring in living organisms . That’s why they end up in the coal . In many cases the EPA standards are bumping against the natural levels . This is most blatantly true in the proposed O3 standards which would make many forests out of compliance and require the outlawing of thunderstorms .
EKophools seem to not accept that the world is made up of elements and chemicals . Greenpeace notoriously launched a campaign against Cl for a year or two until the ridicule that extraordinary dumbness evoked got thru to them .
It appears the absurdity of the absolutely baseless anti-scientific demonization of the molecule which is the one to one partner which H2O in construction of all carbon based life has gotten thru to you so you don’t argue it here .
But why , given the EPA and the Democrats continue to push that evermore thoroughly proven falsehood , should anyone trust their on the surface outlandishly exaggerated claims of deaths , illness and costs of substances at levels which could not even be measured a few decades ago and which are less than in many natural environments ?

Reply to  Bruce Cobb
August 30, 2015 9:42 pm

Bob, yes I think nuclear is better than coal.
And you can see that American lifespan could be even better when we compare to other wealthy nations.
https://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy
/Jan

Reply to  Willis Eschenbach
August 31, 2015 8:25 am

I have read some of your linked postings and think several claims there are wrong or very inaccurate.
For instance:
1. Quote from your From EPA Mercury Madness post:

So let’s assume that the EPA regs will cut out 25 tonnes of mercury per year. This is supposed to save 11,000 lives every year.

This is plain wrong. No one claim that mercury alone causes 11 000 deaths. The EPA says that it is the total pollution from the power plants causes that many causalities. Most of the premature deaths are due to particulates, not mercury. Quote from EPA: http://www.epa.gov/ttnecas1/regdata/RIAs/matsriafinal.pdf

The great majority of the estimates are attributable to co-benefits from 4,200
to 11,000 fewer PM2.5-related premature mortalities.

PM2.5 means Particulates with diameter of 2.5 micrometres or less
2. Based on this misunderstanding you continue:

So that means if we could wave a magical wand and cut out all of the mercury, 100 percent of it, we should expect to save about 11,000 times 7500/25 = 11,000 times 300 = 3,300,000 lives saved every year … and if you believe that three million people die every year from mercury poisoning, you too could get a job with the EPA.

This is of course utterly meaningless since no one has claimed that mercury causes this deaths. EPA says that mercury causes some loss in IQ, not lives.
3. The numbers you refer to above is also saving estimates for mercury alone.
You say:

EPA itself say that the reduction in US powerplant mercury will have a nationwide total dollar value of LESS THAN TEN THOUSAND FREAKING DOLLARS! And on that basis alone, they want to close down the power plants, and you run around quoting the National Geographic’s alarmist view of the EPA’s madness as though it were gospel.

Not all benefits of less pollution can be quantified in monetary units.
Mercury is only a small part of the emissions and a part that is very hard to monetize. Some loss in IQ does not necessary mean that you will earn or produce considerably less. Most us value to be able to serve fish to our kids without worrying if we may be are poisoning them.
Coal fired power plants also contribute to a huge amount of other highly hazardous pollutants like Arsenic (62%), SO2(60%) and Nickel (28%), just to mention a few. http://www.epa.gov/mats/powerplants.html
If you think air pollution matters at all, you should start to look at the emissions from coal-fired power plants.
/Jan

Reply to  Willis Eschenbach
August 31, 2015 9:56 am

JK Andersen says:
Most us value to be able to serve fish to our kids without worrying if we may be are poisoning them.
“Poisoning”??
People are living much longer, healthier lives than ever before. If coal power plants were ‘poisoning’ people, we would be living shorter, unhealthier lives, no?
Modern coal scrubbers remove 99.97% of all particulates. Forest fires, volcanoes, and uncontrollled coal seam fires put much more particulate matter into the atmosphere.
Your argument amounts to the usual “But what if…”
So, ‘what if’ coal power is not a problem? That’s what the evidence shows. Can you admit that, or not?

Reply to  Willis Eschenbach
August 31, 2015 1:59 pm

Pollution from coal plants in the US is something that only limousine liberals and people opposed to development worry about.
Well, plus you, of course … you seem quite willing to shut down a good chunk of the US economy based on your inchoate fears and your desire for a worry-free life

You are wrong there Willis. I’m no leftist, I am pro-industry and I am a huge technology optimist.
But I have other visions than you.
I think the US and other wealthy nations should make two strategic steps:
1. Electrify most of the land based transportation sector like cars, heavy vehicles, buses and trains. It is not something that can be achieved overnight, but we can come close to fulfilling this in a decade or two if we take bold steps now.
2. De-carbonize the electricity production. Productions from nuclear and renewables then have to be increased considerably.
The gains of will be:
a) Reduced air pollution
b) A large surplus of oil. Both U.S. and Europe could be self sufficient of energy and the U.S. could be a large oil exporter. This will lead to lower international oil prices which will gain the developing world.
c) Millions of new jobs and less deficit on the trade balance.
The best we can hope for concerning the less developed nations in the world like India, Pakistan and most of Africa is that they can follow in China’s footsteps and have a massive industrialization and economic growth. This will improve health and education, and reduce the fertility so the population growth comes under control.
The oil surplus from the wealthy nations plays a vital role in feeding this growth.
/Jan

Reply to  Willis Eschenbach
August 31, 2015 9:40 pm

Funny how “bold steps” from folks like you generally translates into you putting your hand into my wallet and extracting some of my money … coincidence?

Huh?
I don’t sell windmills or anything if that’s what you think.
I have nothing to gain personally from this policy
/Jan

Reply to  Willis Eschenbach
September 1, 2015 3:00 am

According to a report on Australian T.V. today, President Obama is planning an excursion in the polar regions of Alaska with someone or other to publicise the alleged effects of global warming. Is this so? If it is correct I wonder if he is somewhat obsessed. I am sure they will not be unaccompanied. Yet another waste of the American taxpayers’ money

Physics Major
August 30, 2015 2:47 pm

So in essence, green credits are a “Tax Cut for the Wealthy”. I thought that Democrats hate that idea.

Steve P
August 30, 2015 2:48 pm

Poverty affects everyone: disease, crime, violence, destructive habits, loss of opportunity, wasted lives, declining RE values are among the many negative consequences of poverty. Now, the rising cost of just about everything is driving the poorest of the poor from their homes and out into the streets. A recent story in the LA Times reported 13,000 new homeless in LA every month.
At least gas prices have had a number of slumps at the pumps this summer, which is good news for all of us, of course, but most especially for all the homeless who manage to live in their cars, itself a big step up from the shopping-cart set, who must trundle their belongings from strip-mall to various intersections where traffic slows, and there are opportunities to garner some “spare change.”
(Wisely, many of these folks also bring along a dog that can stand guard over their meager belongings while they visit the dentist for routine exams, x-rays, cleanings, fillings, root canals, implants, and all of the other necessary dental care that prolongs life, and makes it more enjoyable. When approached by panhandlers, I always feel better knowing they probably want the money to pay for a visit to the dentist, and not for cigarettes, booze, weed, meth, dog food, or tattoos…)
Seriously though, whatever else one may say about Mr. Obama, at least he was open about his plan to drive up energy prices to combat Blackie Carbon – apologies to Bardahl – and very adroit in his ability to convince his supporters that paying higher utility bills was in their best interests, and would help realize their hopes.
“Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket, regardless of what I say about whether coal is good or bad, because I’m capping greenhouse gases,” Obama said. “Coal power plants, natural gas, whatever the industry was, they would have to retrofit their operations. That will cost money. They will pass that money onto consumers.”
I think he meant they will pass that cost onto consumers, estimated in the linked article at $17 billion per year.
http://freebeacon.com/issues/flashback-obama-promised-electricity-costs-would-skyrocket/
When something costs more than it is worth – like all of the green energy schemes – the ROI is a negative number: a scheme that keeps on taking. To make up for the shortfall, the consumer must open his pockets at every turn.
The poor and middle class weren’t the only ones who were fooled by Mr. Obama’s glib eloquence.
“Even his critics were in awe. Libyan leader Muammar Qaddafi fawned as he expressed his joy and pride in “our son of the African lands.” “This is completely different from anything we have ever heard from a US leader before,” he exclaimed…”
http://www.huffingtonpost.com/hamdan-a-yousuf/hope-hype-and-the-many-fa_b_306946.html
Thanks for this excellent essay, Willis! I encourage you to hammer on this theme, the harder the better.

cbdakota
August 30, 2015 2:52 pm

Reblogged this on Climate Change Sanity and commented:
I am reblogging this WUWT posting by Willis Eschenbach. I could not have defined this better than he does in his posting “The Hood Robin Syndrome”. I have long argued that the science is really not primary issue. Rather it is politics where “follow the money” is an excellent guideline. These people like to tax and regulate. And of course there are those that founded this movement that want badly to replace capitalism by socialism (or in many cases—communism).
cbdakota
Ps I am back from vacation, visiting relatives and catching up on honey-dos. Hope to be much more active with my blogging as these and other issues are resolved.

otsar
August 30, 2015 3:07 pm

Then there is the King Sadim touch. Every gold bar he touches turns into excrement.

August 30, 2015 3:21 pm

Thank you, Willis for this devastating compendium and analysis of everything that is wrong with Alarmist/Warmist subsidies and restrictions. It is not happening just in America but in all the developed World. Fortunately most of the under-developed World can see it for what it is and spear-headed by China, is avoiding it or exploiting the Western madness for their own benefit.

thingadonta
August 30, 2015 4:44 pm

“…we took enough taxpayer money to truly change the lives of the world’s poor folks … and instead, we gave it to the American rich folks”.
Some people would argue that much that passes as environmentalism in the developing world is simply another form of western imperialism.

StotheOB
August 30, 2015 6:42 pm

Robin Hood was the name of a legendary English outlaw whose most notable characteristic was that he robbed from the rich and gave to the poor …
…uhm, Robin Hood robbed from the GOVERNMENT & governing bodies, and gave it BACK to the people.
Bugs the S* out of me that this popular false representation persists
He was a Tea Partier, not a Socialist

Reply to  StotheOB
August 30, 2015 10:29 pm

Hmm, StotheOB, I do like this post by Willis, but I am not sure you and I see ‘Tea Party’ policies quite the same… Surely a Tea Partier would be taking from (whoever?), and making sure it was re-applied under the auspices of “The Free Market”, thus ensuring the funds went to those with the most available capital, the best access to financing and law, and with the best connections to whatever government did exist?
ie …By likening Mr Hood to a Tea Partier, are you not advocating taking from the rich (Government and governing bodies?), and giving to the rich and powerful?

StotheOB
Reply to  markx
August 31, 2015 2:22 am

You seen to have that completly backwards.
TEA Party literally stands for Taxed Enough Already. It does not believe Gov should take taxes and give it to absolutely anyone (that has always been the problem); it means they shouldn’t be taking the taxes to begin with.
So yes, Robin Hood was extremely Tea Party minded – taking back from Government/Governing Bodies and returning it to the people it was confiscated from. He reversed the wrong, effectively lowering the tax rate of the people Governments were stealing from. Thats exactly what the Tea Party stands for
Tea Party wants individual Freedom for all citizens. The more money each person has, the more likely they are to build success with it or invest money in others so more can succeed. That success will benifit many. If nothing more, it will benifit their individual family & be cycled into the economy. Not one person should be treated differently, no matter their class, as far as the Tea Party is concerned. Limiting the size & power of Government is how Freedom for all is achieved.
It is actually Liberal policies which take money from everyone, chop off a big chunk to pay the needless bloated Government agencies they love, then largely give it to the rich (see the article for an example of one type, the endless examples of cronyism on display everywhere for another, or the printing of funny-money to feed Wall Street for another) or pay people to stay poor (thats not the intended goal of welfare, but it is none the less the outcome.) Each of those things destroys peoples Freedom and creates more dependency on Government for all.

Reply to  markx
August 31, 2015 4:13 pm

 StotheOB on August 31, 2015 at 2:22 am
….. taking back from Government/Governing Bodies and returning it to the people it was confiscated from…..
……. The more money each person has, the more likely they are to build success with it or invest money in others so more can succeed. …… it will benefit their individual family & be cycled into the economy.
………..Limiting the size & power of Government is how Freedom for all is achieved.
……Liberal policies… take money from everyone, chop off a big chunk to pay the needless bloated Government agencies they love, then largely give it to the rich (see the article for an example of one type, the endless examples of cronyism on display everywhere for another, or the printing of funny-money to feed Wall Street for another) or pay people to stay poor ….

OB, there is a lot of good in there.
But, in agreement with Willis, some things should not be run by private enterprise (law enforcement and prisons for a start) and you sure as hell better regulate the money lenders…
And you cannot ignore bloated big business while you are gutting bloated big government … leave it all up to the free market, and soon enough, it’s all in a few hands (and they own what government you do have). Capitalism only works due to rules and regulations defining currency, ownership, transactions, etc…
Keeping money within communities as you point out IS the answer, but big multinationals are even more efficient at shipping cash out than are government…

StotheOB
Reply to  markx
August 31, 2015 7:05 pm

Willis,
I do not agree that the government “shouldn’t be taking the taxes to begin with.” Taxes are a legitimate way to fund government operations.
I should have added the word ‘excessive’ – it isnt that the TEA Party stands for NO taxes, just very limited taxes.
Taking excessive taxes to fund bloated government which largely works to justify its own existence is ridiculous.
As far as privatizing things like Police – im not sure thats the highest desire of most Tea Party guys either, although some might desire it to do two things – 1, cut massive amounts of Red Tape and needless regulations 2, get rid of the union, allowing better control over who actually is a Cop and ensuring salary, promotion, etc are based of merit instead of tenure.
Privatizing other once Government run aspects has been a massive success in many areas though, allowing to save money, increase production and creates accountability. Charter Schools ate the most high-profile of such changes, and ideally all schools will move in that direction in the future. Being able to fire bad teachers and promote good ones instead of the ones who have been there longest – what an extreme idea :/ haha
Btw, you sound as though you are much more Tea Party minded than you probably think. Ignore the media stigmatizing & name calling; you’ll likely find a happy home with us so-called crazy extremists

StotheOB
Reply to  markx
August 31, 2015 7:39 pm

Markx,
And you cannot ignore bloated big business while you are gutting bloated big government … leave it all up to the free market, and soon enough, it’s all in a few hands (and they own what government you do have). Capitalism only works due to rules and regulations defining currency, ownership, transactions, etc…
That is actually not really true. Big-Government is the one which is generally facilitating Big-Businesses & destroying small-business competition.
Take Dodd-Frank for instance. That law has led to the collapse & sale of small banks across the country – banks which were bought up by, you guessed it, big-banks
Obamacare is the same way. Smaller insurance companies can not survive with the kind of losses being seen when being forced to take on previously ill people to great coverage. Big-insurance is growing leaps and bounds, however
Government “help” is crushing the small competition, leaving only the big guys to compete – which, in turn, strengthens the big guys even more.
Things like minimum wage hikes, massive regulation and endless paper & red tape is a thousand pound weight on the backs of small business. A mom & pop restaurant cant survive paying $15 an hour to low skilled workers when they cant do enough business to buy supplies in the cheap bulk quantities & dont have stockpiles of lawyers hired to handle all of the paper & regulation requirements. Big-Businesses can cut a person or two, raise prices slightly and work towards replacing more people with robots – Mom & Dad can only close their doors.
So while money will generally gather in bunches, eliminating much of the government hand holding average people down will allow us to actually grow the size of the pie instead of fighting for a small sliver of a government controlled fixed size pie.
Income inequality isnt actually a bad thing – its merely when the bottom has no shot at comfort that it becomes a problem. Getting Government out of the way and keeping as much money as possible in the communities themselves will create prosperity for all. We get that and it wont matter that some have much more than others.
So yes, Big-Business currently has too much power in dictating how laws are wriiten and such in our current Government set-up. But limiting the size of Government will dramatically reduce that influence. We can all be unbelievably successful together if only given the chance – and we should all be working towards that goal.

Steve in Seattle
August 30, 2015 7:59 pm

while I am thankful for this posting, I must make the following objection, and this same objection can apply to other posts by other authors, here and elsewhere :
Firgure 1 above gives a strong suggestion that it is literally taken from a page of the linked document. It is not however. When any author constructs a figure, IF it is NOT taken directly from a linked document, and identifies the page extracted from then PLEASE provide a detailed explanation of how and where the data WERE extracted from – page numbers and figures, tables, charts or appendix items used, with entity titles, in the linked document.
How was Figure 1, above, built ?

J. Philip Peterson
Reply to  Steve in Seattle
August 30, 2015 11:18 pm

It is probably worse than the graphic implies. Don’t get Willis to respond, as you may find out that this is just a conservative estimate… JPP

ralfellis
August 31, 2015 2:40 am

If the poor cannot buy Teslas and benefit from Green subsidies, then they should buy Rolls Royces instead. Its their own fault.
With apologies to Marie Antoinette….
R

August 31, 2015 4:24 am

Reblogged this on My Thoughts Today and commented:
Couldn’t be more clear than this excellent article. Thank you Willis Eschenbach.

General P. Malaise
August 31, 2015 6:32 am

that was masterful Willis, worthy as an article on it’s own. I find your comments as valuable as your essay.
regards
Willis Eschenbach August 29, 2015 at 11:08 pm
Old Huemul August 29, 2015 at 6:50 pm
The economic consequences of a tax or subsidy, or whatever other policy, are not a matter of intentions. They are simply observable consequences that follow from a certain policy.
Rattus Norvegicus August 29, 2015 at 9:53 pm
That’s about the most ridiculous statement I’ve ever heard. It is important to evaluate a policy in terms of what it was intended to accomplish.
First, Ratty, since you didn’t quote what you disagreed with, I’m forced to guess that it is the statement above. In future, let me ask you once again to quote what you object to.
More to the point, intentions are pretty meaningless in the real world. In fact, they are so meaningless that we have a saying about them—”The road to Hell is paved with good intentions.” So analyzing the results of our intentions, as you advise, may just provide us with a metric of how fast we’re getting to Hell …
For example, the intention of the many doctors who prescribed thalidomide for pregnant women was very clear. It was prescribed to avoid pregnancy-related “morning sickness”.
The observable consequences of their intentions were horrendously deformed babies.
So … should we judge the practice of prescribing thalidomide based on whether or not it was actually able to control morning sickness in pregnant women?
Because that’s assuredly what you are saying, that we need to evaluate the decision to prescribe thalidomide “in terms of what it was intended to accomplish”, which was nausea reduction … and judged by that metric it was a roaring success.
Now, I can understand why you want that narrow focus on the claimed intentions of a program. It prevents you from looking at the real effects of green policies, the unintended things like the poor subsidizing the rich, or the shafting of the three billion people living on under $3 per day by the insane push to drive up energy costs.
With that narrow focus on intentions, you can say “We are saving the world! We achieved our goal of driving down energy use by raising gas prices to European levels”, while ignoring the single mother who depends on her car to get to work, and who will now have to choose whether to cut back on food or on medical services for her kids …
I fear that kind of willful blindness will get you little traction here. Because trying to convince the practical folks that populate this site that we should ignore the real-world unintended consequences of poorly designed programs, and we should look only at whether thalidomide actually did prevent morning sickness … well, that dog won’t hunt.
w.

StotheOB
Reply to  General P. Malaise
August 31, 2015 8:52 am

I dont know, GP.M, there are things which maybe we should judge based off intentions.
Case in point, the creation of the KKK (as well as lesser known groups like the White Knights and Red Shirts and on&on)
See, in the 1860s-1870s there was this nasty trend of the people in Southern States starting to elect Republicans, often for the first time ever. Couple that with the large percentage of Blacks now able to vote, and well Democrats had to do something to keep Republicans out of office.
So these groups were created with the intention of figuring out ways to keep people from voting Republican
…and in that intention, those groups were a massive success!!!
Look at a state like Alabama. They elected only Democrat Governors from 1874 all the way to 1987 – thats 113 years of success
Mississippi is even better. They went from 1876 to 1992 without electing a Republican Governor. Thats 116 straight
Georgia might even top the list of all of them (not looking up more) It saw 1872 to 2003 (!!!) without seeing a Republican Governor! 131 straight years keeping Republicans out of office!
And while sure, there was the whole burning crosses and lynching of Blacks (and Republicans, but please dont remember that) stuff, plus massively spreading racism thru scaremongering…
But really, that stuff is such minor consequences compared to 110-130 years worth of successfully keeping Republicans from controlling states – as was the intention
The KKK (& other such groups) is the single greatest campaign strategy ever created by a political party. Democrats should be celebrated for succeeding on that intention!
(Btw, my caculated sarcasm aside, your post was great)

General P. Malaise
Reply to  StotheOB
September 1, 2015 6:47 am

it is Willis’ post. I copied it from above. I wanted to point out the mastery of Willis.

Allan MacRae
August 31, 2015 9:11 am

Mr. Anderson,
I suggest that forest fires in North America are responsible for much more particulate matter in the air than coal-fired power plants, where particulate emissions are usually controlled at the source.
One major forest fire in Washington State recently covered our province with thick visible smoke for many days. This is one of our first clear days, and shifting winds may return the smoke any time. Some people with lung problems stayed indoors, but many of us worked and played outdoors as usual.
I suggest that if the figures you cite were even remotely correct, we would all be dead by now.
Increasingly, the alarmist public statements of organizations like the Lung Association and the EPA have little or no credibility.
Regards, Allan MacRae

Reply to  Allan MacRae
September 1, 2015 10:41 am

You are right Allan; fires are a major source of particulate matter in the air. But fortunately the forests around inhabited areas are not burning all the time. Much of the smokes from forest fires don’t reach areas with lot of people.
Particulate pollution levels found in most part of the US is not extremely dangerous; the risk is small compared to for instance active smoking. The reason why it still causes so many premature deaths is that such a huge amount of people are affected by it.
Then there is the cocktail effect. Some people are exposed to unhealthy dust in their occupation, some live in areas with much exhaust, some are exposed to passive smoking. All this can be tolerable, but the additional effect of pollution from power plants and other heavy industry can be the straw that breaks the camel’s back.
The health effect of particulates has been well documented, see for example this article:
http://www.nejm.org/doi/full/10.1056/NEJMoa054409
/Jan

Wayne Delbeke
Reply to  Jan Kjetil Andersen
September 1, 2015 7:10 pm

Yeah. Farmers lung, black lung, miners lung. My dad died of COPD. And I have it too and so does my mother. Too many hours outside in the sun working animals in the dust I reckon, but I wouldn’t trade it for anything. My mom is 88 and still going strong.
A hundred years ago we’d all be dead. But with heated housing and good health care western folks live to 85 while my friends in Ethiopia can expect to live to 55.
I’m thinking they’d be happy to have our “pollution” as theirs is much more severe from burning charcoal in their buildings.
I think they’d be very happy with our “industrial” pollution.

Reply to  Jan Kjetil Andersen
September 1, 2015 9:48 pm

I think they’d be very happy with our “industrial” pollution.

I agree to that Wayne.
And many people in the developing world are exposed to far more dangerous pollution, namely indoor pollution from cooking in open stoves.
The air is the developed world is much cleaner now than it was fifty years ago.
We are fortunate enough to have both cleaner air and better economy than people the poor countries.
I think it make sense to make it even cleaner, simply because the savings are greater than the cost.
/Jan

Reply to  Jan Kjetil Andersen
September 2, 2015 12:18 am

But you gave your real attitude away some comments ago when you expressed your desire to “decarbonize” energy production .
That implies you still give credence to the Orwellian meme that our bit of an increase in the source of carbon to carbon based life is anything other than a boon to that life at these near-starvation levels .

Reply to  Jan Kjetil Andersen
September 2, 2015 7:53 am

Bob, yes I think we should de-carbonize too.
De-carbonizing is of course a much huger and costlier step than just removing the toxins, but I think the wealthiest nations should aim for a de-carbonization of the electricity production.
We have to realize that the poorest nations in the world, which currently have very low emissions per capita, should be allowed to continue to increase their carbon emissions to grow their economies.
However advanced economies are able to grow their economies and at the same time reduce their carbon emissions.
/Jan

Reply to  Jan Kjetil Andersen
September 2, 2015 9:25 am

yes I think we should de-carbonize too

Why ?

Reply to  Jan Kjetil Andersen
September 2, 2015 1:44 pm

This is why:
1. Combustion of fossils creates some toxic air pollutions such as NOX, SO2, CO, VOC et cetera. Some combustion techniques create much; others little, but all create some pollution.
Nuclear and renewable are clean. With electrified transport sector and fossil free generation of electricity we would virtually eliminate anthropogenic air pollution.
2. The poor nations need to increase their energy use to grow their economies and they will need to increase their use of fossil energy. Since fossil energy resources are a limited resource, the prices will skyrocket if everyone continues to increase their consumption.
3. I think that the buildup of CO2 in the atmosphere is a cause for concern. I’m not screaming that the end is nigh, but I think it is better to decrease the emissions than increasing it.
/Jan

Nylo
August 31, 2015 9:58 am

Congratulations Willis for an excellent article. I was going to say that this one is among the best, but then you have written such a huge ammount of excellent articles. Memory tends to be too short.
Keep up the good job.

notfubar
August 31, 2015 10:21 am

Now could somebody do a study on how much the subsidy receivers then returned to those politicians who made it all possible as campaign contributions?

August 31, 2015 8:08 pm

Not to defend the government’s actions and its “give-aways” but at least let’s be honest.
In the U.S., given the highly progressive nature of its tax system, only the “rich” pay taxes. So it is not as if “the hard-working poor” are really paying for this. According to the IRS’s own data, in 2014 the top 1% of income earners paid 37% of all taxes, the top 2-5% paid 22% and the top 5-10% paid 12% of all taxes. So the top 10% of income earners paid 71% of all federal income taxes.

General P. Malaise
September 1, 2015 6:57 am

why are we even talking about CO2 ? it cannot warm the planet even at double the present (or quadruple or more) concentrations.
as time has shown it is beyond a point of discussion. the alarmists are socialists (read communists) or their dupes. it is time to stop discussions with them and actually apply ad hominem responses (they are the ones who always use ad hominem attacks yet deny us to use them).
time to call them what they are … STUPID IDIOTS.

Resourceguy
September 1, 2015 12:01 pm

The policymakers also know where the donors are. It’s a feedback loop where the middle class can only watch and fume.

Reply to  Willis Eschenbach
September 2, 2015 3:03 pm

I have answered why the “why“ question above, but let me add some comments to this:

We have no evidence that CO2 is harmful to the environment, in fact CO2 has been much higher in the past

Yes it has been higher, but that was millions of years ago, it was even before humans existed.
Exactly how long is uncertain, but the Antarctic ice-core record “Dome C” shows with high certainty that the CO2 level has never been as high as the current level in the last 800 000 years. http://cdiac.ornl.gov/trends/co2/ice_core_co2.html
CO2 is one of the two essential gases for all life forms, the other is Oxygen. Human actions have caused the level of CO2 to rise 43% globally, and it is continuing to rise.
The atmospheric CO2 content does not only continue to rise, but the rate also increases.
In the 1960-ies the rate was about 1 ppm annually. From then the rate has been:
1.3 ppm annually in the 70-ies
1.5 ppm annually in the 80-ies and 90-ies
2.0 ppm annually between 200 and 2010
And 2.2 ppm annually since 2010
Most thinking people will realize that this is a dangerous development.
It is of course costly to de-carbonize, but huge new profitable industries are also created.
/Jan

Reply to  Willis Eschenbach
September 2, 2015 3:10 pm

And let me add: I think the best way to help the poor is to create plenty of jobs. I think we can do that with clean and carbon free power.
/Jan

Reply to  Jan Kjetil Andersen
September 2, 2015 3:41 pm

” … create plenty of jobs ” is about the shallowest Statist meme around .
Jobs don’t create prosperity ; goods % capita do .
And if a society can produce more goods with less work , that leaves more time for fishing and macrame .
The issue , of course , is that jobs go to those in the productive flows and the issue is “redistribution” to those not in the flows . The parasitic government class whose signature product is paperwork takes up a lot of the slack .

Reply to  Jan Kjetil Andersen
September 2, 2015 10:11 pm

Jobs don’t create prosperity ; goods % capita do .

That particular piece of BS is so common, it has its own name—the “Broken Window Fallacy”.

You are both right in this
However my argument is still valid. We have a lot of unemployment in the developed world and we have a lot of tasks that should be done which would increase our prosperity if it were done. People would want to pay for that prosperity so in an ideal world the unemployed people should have worked on it.
The reason why they don’t do that is the friction in the economy. There are a lot of reasons for this friction, but one of the major factors is that economic activity also has some negative effects like pollution, noise, space requirements et cetera.
The trade imbalance between nations is another cause of friction in the economy. Debt cannot be increased indefinitely by anyone.
The combustion engines in the transport sector are a major cause of pollution and noise.
The fossil power plants are another major source of pollution.
Oil trade is a major factor in the trade imbalance between nations.
All this adds to the friction in the economy and makes it more difficult to expand these sectors.
Pollution free economic activities meet fewer restraints in the society and can therefore be implemented with less friction in the economy. Carbon free electricity generation can be produced by national resources and is not increasing the trade imbalance like oil imports.
/Jan

Reply to  Willis Eschenbach
September 3, 2015 7:29 am

I think a better analogy to the “job creation” with less efficient tek than destroying and replacing is Milton Friedman’s ;story , here told by Stephen Moore ( http://quoteinvestigator.com/2011/10/10/spoons-shovels/ ) :

At one of our dinners, Milton recalled traveling to an Asian country in the 1960s and visiting a worksite where a new canal was being built. He was shocked to see that, instead of modern tractors and earth movers, the workers had shovels. He asked why there were so few machines. The government bureaucrat explained: “You don’t understand. This is a jobs program.” To which Milton replied: “Oh, I thought you were trying to build a canal. If it’s jobs you want, then you should give these workers spoons, not shovels.”

Also , I like to quote John Christy’s first law of sustainability

If it’s not economically sustainable , it’s not sustainable .

Reply to  Jan Kjetil Andersen
September 2, 2015 11:17 pm

Your claim was that “decarbonization” would create lots of jobs. Yes, it would … so would a fire that destroyed all of downtown Manhattan. Man, there would be soooo many jobs created by that

To burn down a city and build it up again is purposeless. It is the same as digging a hole in the ground and filling it again.
To replace an industry, which have negative side effects, with another industry with less negative side effects, is something very different. I think you realize that despite the rhetoric.
The hard part is to calculate whether the less negative side effects justify the higher monetary cost of the alternative, and I understand that we disagree there.
/Jan

Reply to  Jan Kjetil Andersen
September 3, 2015 2:05 pm

You don’t get it. I’m not destroying a city and rebuilding it as it was. To use your words, I’m replacing a city with a newer, better city

It is not clear from your first example of burning down a city, just to rebuild it, that you meant to rebuilt a better city.
And I think this example is not a parable to the broken window fallacy.
If the city is in bad enough shape, it actually will be better to burn it down and replace it with something better, rather than trying to continue maintenance on the very bad houses.
Sometimes the improvements justify the costs.
A more meaningful parable to the broken window fallacy is to burn the city down just to rebuild it as it was.

And you think you have the moral high ground?

Where do get this from?
It is wrong. I know that many so called environmentalists think they are the ones who fight for the good values and that their opponents are all driven by personal greed. I think that is a rather naive perspective. There is no reason not to assume that there are just as many people with honest or selfish motives on each side on that debate.
It don’t imagine that I have any moral high ground, I just think it is interesting to share my thoughts about these important issues and try to be open minded to other views. Sometimes I learn something new and sometimes I comment on postings which I think are erroneous.
/Jan

Reply to  Jan Kjetil Andersen
September 3, 2015 11:02 pm

Ok we disagree, but it does not bother me much that some people insist that I think that I have the high moral ground. I do not feel it that way.
So say thank you for the interesting discussion for this time.
I hope we can take up some of the issues in later postings, especially the topic about whether we have already virtually eliminated dangerous or unhealthy air pollution, which is something worth studying in further detail.
/Jan

Reply to  Willis Eschenbach
September 4, 2015 1:27 pm

I said that IN THE INDUSTRIALIZED COUNTRIES we have already virtually eliminated dangerous pollution.

FYI : http://www.euractiv.com/sections/health-consumers/climate-action-will-reduce-risk-cardiovascular-disease-say-experts-317357
I almost made a comment on it but then decided it’s not worth my time . That a scary portion of the electorate can be so dog dumb to swallow this ever more absurdly exaggerated propaganda is , well , scary .

u.k.(us)
Reply to  Willis Eschenbach
September 2, 2015 6:11 pm

Willis.
Gotta commend you your restraint.
It actually makes the reading that much more enjoyable, knowing you are holding back.

Allan MacRae
September 2, 2015 11:13 pm

Dear Mr. Anderson – a few thoughts on de-carbonizing:
http://wattsupwiththat.com/2015/03/14/matt-ridley-fossil-fuels-will-save-the-world-really/#comment-1883937
I have no time to run the numbers, but I do not think we have millions of years left for carbon-based life on Earth.
Over time, CO2 is ~permanently sequestered in carbonate rocks, so concentrations get lower and lower. During an Ice Age, atmospheric CO2 concentrations drop to very low levels due to solution in cold oceans, etc. Below a certain atmospheric CO2 concentration, terrestrial photosynthesis slows and shuts down. I suppose life in the oceans can carry on but terrestrial life is done.
So when will this happen – in the next Ice Age a few thousands years hence, or the one after that ~100,000 years later, or the one after that?
In geologic time, we are talking the blink of an eye before terrestrial life on Earth ceases due to CO2 starvation.
________________________
I wrote the following on this subject, posted on Icecap.us:
On Climate Science, Global Cooling, Ice Ages and Geo-Engineering:
[excerpt]
Furthermore, increased atmospheric CO2 from whatever cause is clearly beneficial to humanity and the environment. Earth’s atmosphere is clearly CO2 deficient and continues to decline over geological time. In fact, atmospheric CO2 at this time is too low, dangerously low for the longer term survival of carbon-based life on Earth.
More Ice Ages, which are inevitable unless geo-engineering can prevent them, will cause atmospheric CO2 concentrations on Earth to decline to the point where photosynthesis slows and ultimately ceases. This would devastate the descendants of most current [terrestrial] life on Earth, which is carbon-based and to which, I suggest, we have a significant moral obligation.
Atmospheric and dissolved oceanic CO2 is the feedstock for all carbon-based life on Earth. More CO2 is better. Within reasonable limits, a lot more CO2 is a lot better.
As a devoted fan of carbon-based life on Earth, I feel it is my duty to advocate on our behalf. To be clear, I am not prejudiced against non-carbon-based life forms, but I really do not know any of them well enough to form an opinion. They could be very nice. 🙂
Best, Allan

Allan MacRae
Reply to  Allan MacRae
September 3, 2015 6:36 pm

Epilogue:
http://wattsupwiththat.com/2015/06/13/presentation-of-evidence-suggesting-temperature-drives-atmospheric-co2-more-than-co2-drives-temperature/#comment-1968600
To be even more clear Ferdinand, I sincerely hope that your hypo is correct.
As I said above, atmospheric CO2 is not dangerously high, it is dangerously low.
If you are correct, then humanity can, in theory, maintain atmospheric CO2 above dangerously low concentrations for a long time, perhaps even in perpetuity.
If CO2 is largely driven by natural causes including temperature, then one of the next major global cooling periods (ice ages) will be the end of carbon-based terrestrial life on Earth, and this will happen “in the blink of an eye” in geologic time.
As a member of this fascinating group of carbon-based terrestrial life forms, I feel that I have an obligation to encourage our survival on this beautiful blue-water planet, at least for a little while.
Best personal regards, Allan
Post script:
In 2002 I (we) predicted global cooling to commence by 2020-2030. I am now leaning towards 2020 or sooner. I expect the rate of increase of atmospheric CO2 to moderate as temperatures decline. How CO2 behaves will depend largely on the amount of cooling, of which I have no opinion at this time. Again, I hope to be wrong about this prediction – I can live with being wrong, much more than we all can live in even a slightly cooler world.

Reply to  Allan MacRae
September 4, 2015 10:01 am

Allan
It’s an old thread now so I will not following it further, but since you are asking me a direct question I will answer this.

I have no time to run the numbers, but I do not think we have millions of years left for carbon-based life on Earth.

Well I do, life has existed more than three billion years, another few million yeas is a just a blink of the eye compared to that.

Over time, CO2 is ~permanently sequestered in carbonate rocks, so concentrations get lower and lower. During an Ice Age, atmospheric CO2 concentrations drop to very low levels due to solution in cold oceans, etc. Below a certain atmospheric CO2 concentration, terrestrial photosynthesis slows and shuts down. I suppose life in the oceans can carry on but terrestrial life is done.
So when will this happen – in the next Ice Age a few thousands years hence, or the one after that ~100,000 years later, or the one after that?

You are may be right that this could have happened in the next 10 000 years if mankind had not started burning fossil fuels and sending the carbon back in the atmosphere.
The pre-industrial level of 280 ppm CO2 could have declined by 0.01 ppm annually to 180 ppm in the next 10 000 years. The level would then be low enough to start another ice-age. The reduced greenhouse effect would probably not be enough alone, but the higher reflection from growing glaciers would give a huge positive feedback.
But although we can always discuss what would have happened with the world if mankind had not used any fossil fuel in philosophical terms, but that is quite meaningless from a practical standpoint.
The fact is that we are using fossil fuels on a massive scale and we will continue to use it for a long time. As a result of this human caused carbon emission the CO2 level is not decreasing slowly, it is increasing very rapidly and it in an accelerating rate.
We do not know what this rapid growth in the CO2 level will bring, but we know that the level has not been close to the current level of 400 ppm in the last 800 000 years.
We should look for solutions to stop the acceleration and level off the growth. I am not saying that we have to stop using all fossil fuels now. What I am saying is that we should use less of it, and that the wealthy nations should make the largest reductions.
/Jan

StotheOB
Reply to  Jan Kjetil Andersen
September 5, 2015 12:39 am

You seem to have absolutely no problem just glossing over the fact that our current CO2 levels are about as low as they have ever been. We are in the bottom 10% here, still, even with the “rapid growth in the CO2 level” you are ever so worried about.
If anything, that is the dangerous part – that is, too low of CO2 even now.
Plants generally have ideal CO2 levels 3-4x our current ppm. They dont have it by accident, you know. And this arbitrary and mythical ~280 ppm you cite as ideal is actually a dangerous level for most vegetation. By calling that ideal, you are actually proposing a world with less resources for all life to survive on. That is really a better world in your mind, is it?
We should be celebrating the CO2 rise, and truthfully probably would be if the anti-capitalism crowd didnt decide to turn it into their catch all boogieman with which they would try and control the worlds economics.
So nope, now we have to demonize the building block of life as some kind of toxin which will somehow kill us all unless we allow governments to tax us to death and take us back to the inefficient, expensive & long ago abandoned energy technologies of the 1800s in the name of “progress.”