With economic growth remaining anemic, could intentional government suppression of economic activity have anything to do with it? Now that the president is safely re-elected, the government is resuming what I call the War on the Economy. Elements of the War on the Economy include things like blocking major profitable (and thus wealth-creating) projects (e.g., Keystone Pipeline), diversion through government subsidies of economic activity into wealth destroying ventures like green energy, encouragement of labor unions, massive new regulations to block economic activity, wild overspending on unproductive activities by the government, and I could go on and on.
I truly think that these people believe that economic activity and wealth creation come from the tooth fairy and that it doesn't make the slightest bit of difference whether or not the government is standing with its foot on the economy's neck. If we need more money, we can just take it from the rich. Our leaders have never spent even a moment wondering why the U.S. got rich when other countries did not; or, for that matter, why countries like Argentina and Venezuela (and ancient Rome) were once somewhat rich and then got poor again.
To take one of the bigger examples of government wealth destruction in the War on the Economy, let's consider EPA regulations relating to coal power plants. This morning's New York Law Journal has a column by Michael Gerrard of Columbia University on the EPA's resumption of the process of enacting new regulations now that the election is past: "Obama Reelection Clears Path for Numerous New EPA Regulations." Gerrard is a nice enough guy (I once debated him at a Federalist Society forum on global warming back in 2010), but also a seriously committed environmentalist true believer. However, I have no reason to think that his summary of the EPA regulatory agenda is inaccurate.
Do you remember all of the campaign nonsense about Obama's "all of the above" energy strategy? And of course, during the campaign, you didn't hear a peep from the president about his war on coal. Well, here's Gerrard's take on the next steps:
The reelection of President Barack Obama means that a long list of new regulations will be issued by the Environmental Protection Agency (EPA) in the coming months. Some had been held up because of their political sensitivity, and others were still in process, but many will soon be ready for further action.
Is there anything here that might have a noticeable effect on economic activity? How about item number one:
GHG [greenhouse gas] emissions from new electric generating plants. On March 27, 2012, EPA announced proposed new regulations setting GHG standards for new electric generating plants. The standards could be met by modern natural gas-fired plants. They could not be achieved by coal-fired power plants unless they were equipped with carbon capture and storage, a technology that is not yet commercially available.
You read that right. The EPA has a proposed regulation under which it plans to make all new coal-fired electric power plants illegal, unless they can somehow come up with a new technology that doesn't yet exist. When will that take effect? "[EPA] plans to issue the final rule by April 12, 2013."
How about existing coal-fired power plants? According to Wikipedia, existing coal-fired plants produced some 36% of electricity in the United States in the first part of 2012. Well, yes, they plan to wipe those out as well, although they haven't said exactly how and when:
GHG emissions from existing electric generating plants. . . . EPA has not announced what these standards will look like or when they will be announced; since existing coal-fired power plants are the largest source of GHGs in the United States, such standards are likely to receive a great deal of attention in the second Obama term. However, on Nov. 13 Gina McCarthy, EPA's assistant administrator for air and radiation, told the National Association of Regulatory Utility Commissioners that implementation of any such rule is at least several years away.
Are you comforted by the fact that they say it will be "at least several years" until they wipe out 36% of our electric generating capacity? Then there are the 91,000 people employed as coal miners in 2011 according to the EIA. I guess those people have "at least several years" before they go on government hand-outs.
Meanwhile, the idea that the United States can control world temperatures by unilaterally shuttering its coal-fired electric generating capacity is completely quixotic. People want electricity, coal is cheap, and if we won't use it someone else will. You've probably heard about China building a new coal power plant every week, 50 or so a year. But they're not alone. How about Germany? Germany! Yes, in the wake of the Japanese nuclear meltdown at Fukushima, Chancellor Merkel of Germany announced that they will be closing all of their nuclear power plants. And replace them with what? She didn't think that one through. They talk fantasy about "renewables," but the real option is coal.
Here we have the EPA, so let's shoot ourselves in the foot. As long as they think it's a good idea just to order large swaths of the productive economy shut, I wouldn't be expecting a period of rapid economic growth any time soon.