Robert P. Murphy’s linked to this post he wrote at the Institute for Energy Research. Murphy is concerned that Obama is going down the same path as that interventionist Herbert Hoover did. Hoover passed the Smoot-Hawley Tariff Act, which led the United States into the Great Depression. Murphy thinks that carbon tariffs could be on the way!
Here is an an excerpt from Murphy’s post:
…the Obama administration—under the guise of fighting climate change—is testing the waters with new restrictions on imports. Specifically, lawmakers on the House Energy and Commerce Committee are considering imposing “carbon tariffs” to prevent foreign nations from gaining a competitive advantage vis-à-vis U.S. producers who are burdened with a forthcoming cap-and-trade regime. The idea is that the U.S. government would slap a huge “compensatory” tax on imports that were produced in foreign nations that do not impose carbon legislation on their manufacturers.
Murphy explains why free trade increases the prosperity of all nations, by promoting efficient production:
Even without retaliation, a unilateral tariff increase makes Americans poorer. The gains to the workers in the “protected” domestic industry are more than offset by the loss to consumers who have to pay higher prices. A tariff is a tax on American consumers; the government says to its own citizens, “If you want to buy a product from a foreign producer, you have to make a side payment to the U.S. Treasury.” You don’t make a country richer by jacking up taxes on its own consumers.
International trade allows countries to specialize in their “comparative advantage,” or their areas of relative expertise. It would be catastrophic if everyone had to grow his own food, sew his own clothes, and drill his own cavities. We all benefit tremendously from the ability to specialize in occupations at which we are better than our peers, and then trade with each other.
The same principle applies to entire countries, which are simply aggregates of the individuals living in them. Because of differences in resource endowments, industrial infrastructure, weather, and the skills of the workforce, it is much more efficient for certain regions of the world to concentrate on a few key items and export them to other regions. When the government raises tax barriers, it interferes with this process and makes everyone poorer on average.
Not only do tariffs hurt consumers, but they also destroy businesses that export products. First, those businesses will have to pay more for raw materials. Second, the goods they export to other countries will face import tariffs. This will cost more American jobs than are “saved” by imposing tariffs. And the government gets the money from tariffs, not the productive private sector.
Murphy explains how global warming is really just a euphemism for economically-ignorant socialism:
Even if the threat from man-made climate change is as serious as some scientists claim, this fact would not overturn the centuries of work done by economic scientists. We know from both theory and history that raising trade barriers in the middle of a severe worldwide recession is a terrible policy. We also know from theory and history that government central planning does not work. When the technocrats reorder the economy, deciding which firms will survive and which prices are too high or too low, the results are disastrous. It doesn’t matter whether the justification is “fighting the Depression” (as in the 1930s) or “fighting climate change” (as in today’s discussions). Either way, central planning will wreck the economy, and it won’t even achieve its ostensible goals.
I recommend you go there and read the whole article. Think of the future of your children, and of your neighbor’s children.
Related story over at Stop the ACLU: “EPA may soon deem CO2 a threat to human health“. I blogged before about cap and trade, tax hikes on oil, the world’s anger at tariffs, and the myth of global warming.