Personal Circumstance & The Economy

Yesterday, I posted a link on my facebook page to Sarah Palin's article on Cap and Trade. I received a lot of flack for posting a Sarah Palin article, and I'm not sure how much the content was actually read. It was a well-written article that I hoped would help people to understand why Cap and Trade is such a bad idea for our economy.

In addition to posting the article, it turned into a debate about which candidates should be supported. I still stand firm in that I would vote for a very smart economist who was a little right wing than a person who supported social rights in every manner that I do who had terrible economic policy.

I feel that the reasons for the argument I'm making are not clear, and it is with this posting that I hope to bring some understanding to those around me about why I make these statements.

Here is a run down of what Cap & Trade is going to do:
Cap and Trade is going to raise energy prices. We are going to be taxed for the amount of energy and carbon emissions we use, and rewarded for those we don't use. There will be a new market, similar to the stock market, for the sale and purchase of these credits. Since we are a global power, we are going to tariff anyone who does not meet our standards in attempts to better the planet.

How Cap and Trade will effect us as individuals and business owners:
With the raise of taxes, companies do not simply pay them and let revenues go down. The beauty of capitalism is that everyone is trying to succeed rather than just get by- but in this case that means passing on those taxes to the consumer. Because of this, energy prices are going to skyrocket. There is an Iowa-based energy company called Mid American energy that hasn't risen its prices in years, but under Cap and Trade prices will raise 25%, just to give you an idea how hefty this tax is.

While the job market is down; 9.5% is the most recent statistic, but this doesn't include people who now consider themselves self-employed, work one part time job just to get by, or are not receiving unemployment. If we include all of these people, unemployment would be closer to 15%.
Is Cap and Trade going to create jobs? Well, as Sarah Palin's article points out, the government knows its going to squash our energy businesses, and includes around $4,200,000,000 to cover unemployment under this new tax over eight years.

In addition to taxing the living daylights out of us all and losing jobs in the energy industry, this bill would also be yet another gut punch to our economy. The intention of Cap and Trade is to get us off oil and coal and most of the energy sources we use today. When our resident energy goes out of business, we will continue to turn to foreign countries to get the same efficiency of energy. Breaking the bank? Invest in Saudi Arabia.
So you might be wiping your brow, thinking, "Well at least we'll still be able to get the energy we need, right?" ... The bad news is these tariffs. If we tariff other countries who don't use the same energy, our energy prices will still be higher than they are now, but that's not the worst of it. Tariffing other countries will cause them to tariff us back. This is another hidden tax to be paid by all business owners who are interested in the "global economy" that our government keeps going on about.

So there you have it- not only will we as citizens be hard for a dollar, but our dollars will continue to leave the country and go to foreign countries. At the same time, our exports are gong to be seriously curtailed due to tariffing, which we will have to pass on to our customers here and abroad, which will cause sales to go down, which causes revenues to go down, and then ... more job loss. More pain in this economy. More of the same stock market crashes and rising unemployment.

Cap and Trade's only redeeming quality is that it will help to cure the national debt- one that we should take responsibility for and find the responsible way to clean up without taxing the life out of our citizens.

...

You might be curious as to why I seem to care so vehemently about the economy. Here's my story:

This year is my eighth year working at a motorcycle company. I do dealer licensing and registration as well as state licensing, on top of sending out corporate mailings to shareholders, copy editing and just boring office nonsense.
My boss (who doubles as my dad, coincidentally) was an economics major, is a conservative (both fiscal and social, I'm sad to say, but supports my stance on the drug war at least) and was owner of a brokerage firm back in the eighties when that was the hot thing to do. He understands the stock market better than anyone I know and also how the economy works. Its mostly thanks to him (and a few econ teachers I had at Iowa State) that I have the knowledge that I do.

At work, I keep tabs on how our stock is doing in regards to the rest of the market, and the market has been hit hard. I've seen some of my closest family friends hit hard times.
Three years ago, when I graduated high school, I was lucky enough that I was told not to try to get a job- school was my job, but in this economy that is no longer possible.

I know a man who had his life savings invested in Wells Fargo, only for the price of the stock to fall by 50%.

I'm seeing firsthand the effects of this depression- yes, depression- and its not pretty. The statistics don't demonstrate nearly enough what is really going on, and its not good. You probably have had something hit you hard right now, and it might not be as bad as finding out that your retirement just got cut in half (so if you live more than ten years you're kind of screwed) or losing your home like so many are.

...

In psychology, I learned about what is called Maslow's hierarchy of needs. Physiological is the first need, then safety, then love, esteem and self-actualization.
While all the needs are important- obviously safety is a big one, as well as love- while in this hard financial time, my main focus is money for rent and food. There really isn't anything more important for survival.
Continuing to curtail the economy is going to make these basic needs impossible to obtain for a significant percentage of the population. There are missionaries who go to third world countries to cure hunger: the United States is soon going to need them here if this is the way our country is continued to head, and that's the thing that no one seems to understand.

There has been talk of corporations "too big to fail." Well they've failed and the government has now taken them over in the grandest abrasion into the private sector this country has ever seen. With this, government is growing, the economy is halting, and with it, our GDP.

For these reasons, I would choose a candidate with the right mind economically than one who didn't. For the sake of the future of our country, economic stand point has to come first and foremost. I fear that without real economic recovery, this great nation will lose all the things that make it great: laissez faire, capitalism, freedom to succeed.

I hope you understand my position: the government is not immune from failure. The government is not "too big to fail," its just too big.