Why Deregulation Is Essential to Restoring Booming Economic Growth, and the American Dream
This column by ACRU General Counsel Peter Ferrara was published on July 19, 2014 on Forbes.com.
Last week, I discussed tax reform as the first component of a comprehensive agenda to restore booming economic growth, and the American Dream. This week, I will discuss a second essential component of such a growth restoration agenda: deregulation.
Last week, I attended and spoke at the Ninth International Conference on Climate Change in Las Vegas, organized by the Heartland Institute, the world headquarters for skeptics of anthropogenic (human caused), catastrophic, global warming. The event was co-sponsored by 32 organizations, demonstrating broad support for the Resistance. Nearly 700 people attended (a record among all 9 such conferences), with climate scientists from all over the world. Those included 64 speakers from 12 countries.
The event was broadcast live by CSPAN, and online by Heartland, where 6,000 more viewers watched at least some of it. The presentations are all still available online, where another 40,000 unique visitors have also watched them.
I came away from the conference convinced that the climate alarmists are right in at least one respect. The debate over anthropogenic, catastrophic, global warming is over. But it is the alarmists who have lost it. This is further confirmed by Australia this week repealing its carbon tax, with popular, newly elected, Liberal Party Prime Minister Tony Abbot calling the claim that humans are causing global warming “absolute crap.” Indeed, I as a lawyer and economist am intellectually fascinated by the subject, because the skeptics have by now so thoroughly trashed alarmist arguments.
Check it out for yourself. Read the latest Assessment Report of the establishment Intergovernmental Panel on Climate Change (IPCC). And read the three, thousand page volumes published this year of Climate Change Reconsidered II, written by the dozens of scientists in the Nongovernmental International Panel on Climate Change (NIPCC).
I see no science left after that for any argument that there is any real serious threat of catastrophic, anthropogenic, global warming. The international scientists at the recent Heartland conference do not dispute the theory that “greenhouse gases” have some effect in heating the earth’s atmosphere. But there is no sound science showing that such heating would be so substantial as to threaten catastrophic results for humans, other animals, and plants.
Yes, sea levels are rising. But not any faster than they have for the last 12,000 years, since the end of the last ice age. The polar ice caps are not melting. The Antarctic is at record ice levels, and the Arctic polar ice cap has been restored. Some glaciers are receding, but others are still growing. The weather is not getting more extreme. The worst hurricanes, tornadoes, and other extreme weather are all in decline. Now that the alarmists have been exposed for these scare tactics, they have lost all credibility.
The only argument for catastrophic, anthropogenic, global warming now rests entirely on climate models, which not only have never been validated. They have been falsified now by the almost 18 years of no global warming, which more recently has trended towards global cooling. Spare me the comments by pop tarts, all of whom turn out to be on the government payroll, claiming oh no that cessation of any warming is not true. Too many alarmists have now admitted as much, and it is even being discussed now in the socialist party press.
The growing, yawning gap between the spiking temperature projections of these models and the flat reality not only discredits the models. It is now proving that the climate is not nearly as sensitive to carbon dioxide, or CO2, (a natural substance essential for the survival of all life on the planet, not “pollution”) as the alarmists have tried to claim. That has been proven as well by the up and down pattern of global temperatures going back to the start of the last century, and beyond, despite steadily rising concentrations of CO2 in the atmosphere that entire time.
The NIPCC scientists and others at the Heartland conference argue that these climate patterns are more consistent with, and determined by, natural causes. Indeed, the most interesting and challenging scientists at the conference argued that these natural causes now portend a sustained period of global cooling.
Sebastian Luning, doctorate in geology/palaeontology, has been studying the history of solar cycles for 20 years at universities in London, Manchester, Wales, Vienna, and Bremen, Germany. He co-authored with Franz Vahrenholdt, long a leading environmentalist figure in Europe, the book The Neglected Sun, published in 2013. While the U.N.’s IPCC insists that variations in solar activity play no role in climate change, Luning emphasized at the conference that 99.98% of the total energy contribution to the earth’s climate comes from the sun. He postulated that slight changes in that huge force, as reflected in documented cycles of solar activity, would be the dominant factor in causing climate changes, rather than comparatively puny human activities.
Luning referenced a data set of reconstructed cycles of solar activity going back 9,000 years, published in the Proceedings of the National Academy of Sciences of the U.S. That data set shows the most well-known recurring cycles of 11 years, plus cycles of 90 years, 210 years, 500 years, 1,000 years, and even 2,300 years. He argued that these cycles were the dominant causes of the up and down pattern of global temperatures shown in the historical temperature records, including over the last 150 years, when the industrial revolution began contributing to rising atmospheric CO2 levels.
Periods of high solar activity, such as sunspots and solar flares, correspond closely with historical warm periods, such as the Medieval Warm Period, running roughly from 950 AD to 1250 AD, and the Roman Warm Period, from roughly 250 BC to 400 AD. Periods of low solar activity correspond closely with historical cold periods, such as the Little Ice Age, running from roughly from 1300 AD to 1850 AD. The IPCC’s climate models, which purport to show catastrophe if we do not cease using the energy that fueled the industrial revolution (bitterly resisted by environmentalist reactionaries today), cannot reproduce the temperatures of the Little Ice Age, or these other historical climate variations. So climate hysterics have tried to deny these variations occurred in the past. But the variations proved too thoroughly evidenced in historic records for such ploys to prevail.
Luning concluded that taking the impact of these solar cycles into account would ultimately reduce the estimated climate sensitivity from an atmospheric doubling of CO2 to just 1 degree. That estimated sensitivity is already being forced downward from a previous high of as much as 3, or even 4, degrees, by the now sustained lack of global warming for almost two decades now.
Dr. Habibullo Abdussamatov is head of space research at the Pulkovo Obervatory in St. Petersburg. He is author of Grand Minimum of the Total Solar Irradiance Leads to the Little Ice Age (2013) and The Sun Dictates the Climate of the Earth (2009). In 2013, the European Scientific-Industrial Chamber awarded him a gold medal for exceptional achievements.
The Little Ice Age from roughly 1300 AD to 1850 AD was accompanied by several cycles of dramatically reduced sunspots and other solar activity. The Wolf Minimum began in 1280 and persisted for 70 years until 1350. That was followed by a period of even lower sunspot and other solar activity that lasted 90 years from 1460 to 1550 known as the Sporer Minimum. During the period 1645 to 1715, the low point of the Little Ice Age, the number of sunspots declined to zero for the entire time. This is known as the Maunder Minimum, named after English astronomer Walter Maunder. That was followed by the Dalton Minimum from 1790 to 1830.
Abdussamatov argues that similar patterns of sunspots and other solar activity began in 1990, which he says was the start of another solar decline, caused by a quasi-bicentennial solar cycle. He says that all 18 periods of substantial climate change over the last 7,500 years have been caused by such cycles. Indeed, he has charted such effects going back 800,000 years.
That quasi-bicentennial phase has already shown up in sharp declines in the much smaller 11 year solar cycles. He argues that a new Little Ice Age resulting from this solar decline can be dated as starting this year, which he first predicted about 10 years ago. The solar decline will continue, he says, reaching a new solar Grand Minimum period starting in 2043+/-11 years. That will be the beginning of what he calls a “solar autumn,” passing from the recent period of “solar summer.”
The decline will continue, he says, passing into “solar winter” in 2060+/-11 years. That will be the equivalent of a new Maunder Minimum, which was the deepest cold period of the Little Ice Age. By then, global temperatures will have fallen about 1.5 degrees from current levels, he expects. The decline will then stabilize at that level for another 50 years or so. Abdussamatov argues that to prepare for this, governments need to be maximizing economic growth, so that countries will have the economic resources to best deal with the new frigid climate. Astrophysicist Dr. Willie Soon also emphasized the role of the sun as the dominant factor in climate change.
Dr. Don Easterbrook, Professor Emeritus of Geology at Western Washington University, emphasized instead the role of natural ocean cycles in causing climate change. He has collected data showing 20 periods of global warming and 20 periods of global cooling since 1480 AD, each lasting for roughly similar periods of 27 years on average. These were caused, he said, by the cycles known as the Pacific Decadal Oscillation (PDO) and Atlantic Multidecadel Oscillation (AMO).
On the basis of these historical cycles, in 1999 Easterbrook predicted 25 to 30 years of global cooling, as he estimated that the PDO began phasing from warm to cold in that year. That is the primary reason there has been no warming for almost 18 years now, with a slight cooling trend over more recent years. He says the 20 years of global warming before that were due to a natural PDO warming cycle, not mankind’s CO2 emissions from the burning of fossil fuels.
Overregulation Squelches Energy Production, Costs Necessarily Skyrocket
Politicians and “journalists” who insistently express fervent belief in catastrophic, anthropogenic, global warming do so not because of any science they have read, but because they want to believe in it. That desire stems from the recognition that the theory provides the justification for wildly expanded government powers of taxation, spending and regulation that would displace markets and capitalism. This applies to President Obama and his Democrats, Federal, state and local, and major media outlets like the New York Times and the Washington Post.
This is why Obama and his Democrats have so overregulated energy production that output of traditional fossil fuels such as oil, natural gas, and coal, on federal lands and other federally controlled areas (primarily off-shore) has declined sharply under President Obama, while such production on private and state lands has soared to record smashing levels. Today, America now has the resources to be the world’s number one producer of each of these energy sources, plus nuclear energy, which America originally pioneered, but since has ceded to other, rival economies.
This deprives America of the full scope of increased jobs, wages, income, and tax and royalty revenue that would result directly from a fully liberated energy boom as America reaches its renewed potential as the world’s number oil producer, number natural gas producer, number one coal producer, even number one nuclear energy producer. Clumsy overregulation has now killed the Keystone Pipeline, as Canada has given up on Obama’s misleadership, and decided to build a pipeline to its west coast to export its energy bounty to America’s emerging top rival China, which will soon surpass America as the world’s number one economy.
Moreover, the resulting supply of reliable, low cost energy from such an energy boom would fuel a broader, economy wide, boom. The fracking boom in natural gas production quickly earned an echo in the developing return of manufacturing to America’s shores.
But stunting the supply of traditional fossil fuels, plus adding the costs of unnecessary overregulation, will spike the cost of energy in America, as Obama boasted behind closed doors to deluded supporters in 2008, saying that under his plans, “the cost of electricity will necessarily skyrocket.” Forcing in addition a shift by regulatory requirement to necessarily much more costly “renewable” fuels like solar, wind, and biofuels will further skyrocket America’s energy costs.
These added costs are like an additional tax burden squelching the economy, just like the carbon tax that Australia just so wisely jettisoned. The Liberal Establishment told us the awful stagflation of the 1970s was the result of oil price spikes caused by Arab oil embargoes. But now that same establishment is telling us we must now voluntarily do the same thing to our own economy, for our own good.
Restoring maximum, booming, economic growth requires deregulation to remove this counterproductive overregulation, which the discussion above of the science of catastrophic, anthropogenic, global warming shows is not necessary. Restoring growth requires liberating energy producers to lead an historic energy boom directly creating millions of good paying jobs, spreading the 3% unemployment and booming wages of North Dakota across America. And producing burgeoning supplies of low cost, reliable energy that would spread the boom economy wide, through a renaissance of good paying jobs in manufacturing and other industries.
State governments should further contribute to the boom by repealing costly renewable energy mandates, and telling the EPA that if it wants states to adopt their own carbon taxes, or cap and trade, the states will see them in court.
Costs of Obamacare Regulatory Delusions
Both the Obamacare Individual Mandate and the Employer Mandate are regulatory disasters killing jobs and the economy in America. The Individual Mandate because exactly the opposite of what Obama promised it is sharply increasing health insurance costs by requiring the purchase of more extensive benefits than people want to pay for. That includes the costs of Democrat “fairness” in guaranteed issue and community rating, which are like requiring fire insurers to issue insurance policies at the same cost as for anyone else to those who call in to buy after their house is already on fire. And the Employer Mandate because it is adding these costs to employment, which is reducing jobs, at least full time jobs.
The Obama Administration was celebrating the labor report for last month reportedly showing an increase of 288,000 jobs. But those were all part time jobs, as the employer mandate does not apply to jobs of less than 30 hours a week, which is all that the economy is currently producing as a result. Full time jobs actually plunged by 523,000 last month. But part time jobs more suitable for teenagers skyrocketed by 800,000. As a result, overall, fewer than half of American adults are working full time. No wonder middle class incomes are falling so steadily, Obama’s misleading rhetoric notwithstanding.
Restoring booming economic growth requires removing all these costly, counterproductive, Obamacare regulatory burdens. More people would be covered through carefully constructed, free market incentives for health insurance, which free market economists have been advocating for 20 years. But the dishonest, so-called “mainstream” media won’t cover them, or tell anyone about it, because they will only support increased government power and control.
Dodd-Frank’s Regulatory Overkill
The Dodd-Frank legislation (Democrats thought it would be a great idea for those who caused the financial crisis to devise legislation to address it) imposes hundreds of new regulations on financial institutions that burden small and community banks the most. Instead of ending financial bailouts as advertised, the legislation actually institutionalizes them. The Justice Dept. is vigorously pursuing the same imaginary discrimination suits that led to the financial crisis in the first place, on the idea that denying loans to people who can’t pay them back is unfair and discriminatory.
This regulatory overkill has deprived the economy of the credit needed for a full recovery. Employers are constrained from gaining the necessary capital to start or expand businesses, killing the jobs and higher wages that would result. Consumers can’t get the credit necessary to support a booming economy. Restoring booming economic growth would require removing these unnecessary and counterproductive economic burdens.
Next week, we will discuss monetary policy reform, which may be the most important reform of all for restoring booming economic growth, and the American Dream.