Carbon taxes are fine, unless they work

The BC provincial Liberal regime in Victoria seems set to introduce a carbon tax as early as this spring’s new budget, scheduled to be delivered by out-going Minister of Finance (and apparent Republic reader—she took our advice, a lone voice in the media wilderness, and steered herself away from a try at Vancouver’s mayor’s office), Carole Taylor.

Environmental activists from Arnold Schwarzenegger (huh?!) to Elizabeth May (double huh?!) seem set to roundly applaud the measure. As will the Vancouver Board of Trade (who’ve never failed to whip a horse once it’s bolted the barn). Who wouldn’t welcome the greatest idea yet on how to save the world from floods, storms, droughts and the other horsemen of the apocalypse? Even the business pages of both the Globe and Mail and the National Post now embrace a carbon tax, and like grumpy breakfast eater of old, Mikey, they don’t like anything!

There’s one problem.

A carbon tax is entirely predicated on reducing industrial activity and worker and consumer driving by making these activities, which spew greenhouse gasses, more expensive. (Or “so-called greenhouse-gasses,” as Michael Smyth expertly calls the by-products of fossil-fuel burning, despite the fact every last accredited meteorological scientist in the world has affirmed these as greenhouse gasses). And what does the entire edifice of government do whenever industrial activity and consumer driving fall? Why, they engage in a round of economic stimulation to get industrial activity and consumer driving growing again. And what do they do when industry and drivers complain the price of doing so is getting so high they might cut back? Why, the entire edifice of government tinkers with the tax code to reduce those costs and prevent industry and consumers from cutting back.

The last time gasoline prices at the pump surged to their present levels, the pressure on government from drivers and nearly all the media (excepting, again, The Republic) to reduce gasoline taxes to take the bite out of the surge and maintain everyone’s ability to keep on doing what they do—which is burning up fossil fuels and spewing so-called “so-called greenhouse gasses”—was enormous. Even MLAs on both sides of the floor argued reduced gas taxes to help “the working family” who was at risk of being forced to reduce the number of car trips they take to school, hockey practice, WalMart, and, lastly, work.

So if carbon taxes actually work by making industrial activity and consumer driving more expensive to the point where industry and drivers begin cutting back on their activities, what do you suppose the government is going to do? Why, it will invest in economic stimulus packages and tinker with the tax code to reduce the price pressures and continue to expand these activities. Will the government state a commitment in this spring’s budget to engage in no economic stimulating or tax code tinkering when the carbon tax begins taking effect and begins reducing industrial and consumer driving activity? And if it did, would Ah-nauld and May and the National Post and Globe and Mail continue to applaud?

We know they won’t. Economic measures and tax code adjustments are already available to any government as effective means of reducing industrial and consumer driving activity without the need for any new exotic and thoroughly green-washed hair-brained schemes like carbon taxes, and yet none of them have ever considered such simple mechanisms. Indeed, such measures are anathema to everything our governments do, which has over time been reduced to nothing but stimulating economic growth.

All wars are local—including the current ones

Dr Alexander Woodside, in a Chinese history course twenty-two years ago at UBC, taught me how to think with other points of view. In that case, it was the American conflict in Vietnam, portrayed to me in everything I read or heard about it up till then as a geo-political clash between the US, the Soviet Union, and China, with all criticism of the US restricted to complaints over how the US had conducted itself within that frame.

It was Woodside who pulled the chain on my lamp when he asked his students, which included me, to consider whether the Vietnamese fighters might not have cared about or even known about this grand geo-political frame, but might instead have been fighting wholeheartedly against foreign intrusions on their patch by anyone and everyone, as they had done repeatedly, and successfully, throughout their long and proud history. The war, he suggested, was not at all some big meaningful 20th Century ideological battle between Capitalism and Communism. It was a battle between a fantastical delusion and a foreign occupation.

The US, with Canada in two this time, is again militarily occupying foreign lands—Iraq and Afghanistan. And what do they find? A mysteriously highly-motivated resistance. Rather than reach for the easy and obvious source—people everywhere hate foreign occupations and will resist them—the Americans, Democrats and Republicans alike, as well as all mainstream Canadian political parties, entertain yet another fantastical delusion giving rise to fevered imaginations of a big meaningful 21st Century ideological battle waged against them by, variously, Saudi Arabian Wahabists, Iraqi Bathists, Iranian Mullists, neo-Taliban jihadists and a few other –ists that seem to be conjured up by the day.

Hey America: the world doesn’t hate you per se, the world hates foreign occupations, just about as much as you would too. Start with that frame of mind and see if it leads to more fruitful ideas of how to fix your problems.

Once-in-a-lifetime opportunity

Like it or hate it, there are pretty good arguments for preferring a world in which America is still around, if only the country would join the family of civil nations and behave itself. It is certainly in Canada’s interest to see America survive intact the coming tribulations it must face, and it’s mostly in the world’s interest to see an America emerge that can be better tolerated around the world.

Most of the candidates for President from both the Democratic and Republican camps have expressed the need to restore America’s credibility and standing in the world, and have offered various ideas on how that can be done.

This widespread, nearly unanimous admission that America’s role in the world is broken is an encouraging start. But even the most radical of available ideas floating around about how to fix it fall far short of what will be needed. Candidates talk of diplomacy, of scaling back on the military posture, and of proceeding in multilateral ways. But these aren’t the reasons why America has lost its role in the world. People around the planet have a hate on for America because the nation has killed a lot of people in pursuit of some nightmarish delusion.

What is needed, if America’s role is to be restored in the world, is a presidential candidate who promises to deliver to the International Court of Justice the principles of the present administration to stand trial for war crimes, to promise to apologize to Iraq, Afghanistan, and the world on inauguration day, and to promise appropriate war reparations payments to afflicted societies.

Seeing Bush, Cheney, Rumsfeld and Rice locked up in jail would go a long way to re-establishing America in the eyes of the world as a nation guided by law and justice. An administration that did this would quickly find itself welcomed in virtually every foreign capital on the planet, and in most streets of those capitals too.

Even for those Americans who don’t think those four did anything wrong, four sacrificial lambs thrown to the wolfs in exchange for an attitude adjustment toward America from around the world, a change that would otherwise take a couple generations of good behavior to achieve, seems like a pretty good bargain.

Canada can get a head start on capitalizing on this once-in-a-lifetime diplomatic opportunity by publicly calling for such an announced policy from any and all presidential candidates now.

Don’t say we didn’t warn ya

About 18 months ago, The Republic predicted that A) Rising housing costs would be revealed as a classic economic bubble, that B) Collapse of that bubble would remove inflated home equity as a support for consumer credit-based purchases, that C) Consumer credit-based purchases would be revealed as the only basis for growth in consumer spending, as opposed to consumer income-based purchasing, that D) Consumer spending would be revealed as the only consistent support for the economy as a whole, that D) The collapse of the housing bubble would therefore result in downward pressure on consumer spending, removing the last support there is for a healthy economy, but that E) consumer spending on gasoline would continue to rise as a result of Peak Oil and lack of choices for people who must drive cars for work, shopping, school and so on, so that F) consumer spending would sharply decline at all retailers as a result of this impending double whammy.

Based on this set of predictions, The Republic called on the BC provincial and the Vancouver civic and regional governments to take measures in the one area they can affect: creating other choices for people who must drive cars as a policy to save the future of small business retailing, which is the soul of the city in that this sector provides most jobs, most services, most civic tax revenues, and most social fabric to our communities.

Instead, our predictions and instructions were summarily disregarded and the provincial government began construction on a car-based $3 billion highway and bridge system and the City government began planning major road widenings for the expected increase in the number of cars entering and leaving the city because of the hugely expanded highway. Now this, from the New York Times of Monday January 14, 2008, about right on schedule according to our predictions 18 months ago:

“Strong evidence is emerging that consumer spending, a bulwark against recession . . . has begun to slow sharply at every level of the American economy, from the working class to the wealthy. . . . Beginning in December, Americans cut back significantly on personal consumption, which accounts for 70 percent of the economy. . . . December turned out to be a bloodbath for retailers at every rung on the economic ladder. . . . At the same time, the number of overdue payments on American Express cards is surging. ‘The falloff in spending is everywhere in the country, but it is greatest in those areas like south Florida and California, where home prices have fallen the most.’. . . The big exception is gasoline. American Express and the Consumer Federation of America say that consumers are buying just as many gallons as ever, but paying more for them, and that has forced cutbacks in other purchases. . . . Gia Trumpler, 37, a travel consultant who lives in Manhattan . . . is trimming costs where she can by bringing lunch to work from home, rather than eating out” at a local lunch counter, presumably, where local people are employed. Local retailers in Vancouver, just like their counterparts across the continent, also took a “bloodbath” in December, also because inflated home-equity-backed consumer credit-based purchasing has fallen off a cliff, while volumes of necessary gasoline purchases have stayed the same despite sharply rising gasoline prices, bringing much less discretionary spending to those same retailers, spelling business closures, job losses, and declining civic revenues in the offing, each of which will lead to still more crimped shopping at local retailers.

All of which could have been greatly mitigated at least locally with massive investment not in gasoline-burning car-based transportation infrastructure, but in electricity-fueled mass-transit-based infrastructure. Which is what the BC government has finally announced just earlier this week—but without making the economic argument.

Like throwing a pit-bull in a pit of snakes

The Vancouver 2010 Olympic Organizing Committee announced that it wants to put the grab on the Britannia Ice Rink. A great many locals are firmly opposed to this idea for a great many reasons. A further consideration VANOC might want to take into account is this neighbourhood’s propensity for protest.

There is no question that protesters will want to make themselves visible to media and visitors at every Olympic venue in the city, such is the affront to local sovereignty, local spending priorities, local housing and local sensibilities that the whole Olympic song and dance represents. Those protesters mostly live on the eastside, and proliferate most especially around Commercial Drive, the address for Britannia Community Centre, such is the level of intelligence and awareness of local and international issues of residents here generally (not least because The Republic circulates here most). An Olympic venue located in the protest community’s own backyard will be a venue most targeted for such protests. Olympic venues in this post-9/11 madness will be most conspicuous by the security fencing and police and army guards deployed to make freaked out Americans feel safe. They will be deployed most especially to a venue like the Britannia Community Centre because this is where previous confrontations between protestors and police have gotten out of hand (like when the Premier was scheduled to visit the new child-care facility, a visit that was cancelled because his safety could not be guaranteed by police, such is his public approval rating on this side of town).

So VANOC, by attempting to take over Britannia for a practice venue, runs the risk of providing international media their easiest access to pictures and video of police and army personnel wailing on protestors carrying placards about housing and poverty issues exacerbated by the Olympics. And there are certainly enough articulate people around to describe to those media exactly what those issues are, and how it all relates to the tazering death of a visitor in 2007, the mass murder of prostitutes over several previous years of police inattention, and the proliferation of homelessness all over the city.

For their own public relation’s sake, VANOC ought to can this idea right now. Emotions are already so high in this neighbourhood still two years out that by 2010, people are going to get hurt.