The Washington Post decided to publish an op-ed by soon-to-be-former Governor Sarah Palin today. It's about cap-and-trade. It doesn't mention the words "climate change" or "global warming" once. It does, however, contain a lot false and unsourced arguments and literally promises that cap-and-trade will "destroy" our economy. Apparently, Palin hasn't taken Cap and Trade 101. Palin's basic argument is that to acheive energy independence (the only goal, in her mind, of cap and trade), we should open up ANWR, drill more off-shore (if only those Washington bureaucrats would let us!), use more coal and invest in nuclear power -- amazingly, she doesn't even bother paying lip-service to renewable energy sources. I've brought back this campaign season graph to address the question of expanded drilling. Nuclear power is hugely expensive for the government, coal is enivronmentally unfriendly, none of her ideas are sustainable in the long-term and they simply don't address the question of climate change. Best line in the whole piece, you ask? Probably this:The ironic beauty in this plan? Soon, even the most ardent liberal will understand supply-side economics.First reading this, I thought, "Wow, I don't understand supply-side economics, because cap-and-trade has nothing to do with that." But after a quick refresher, it became clear: Palin does not understand supply-side economics. Neither the success or failure of this plan will convince anyone that tax cuts pay for themselves.But in any case, not everyone is from a "huge, energy-rich state" where the government runs a socialist energy monopoly that provides subsidies to citizens and receives $1.84 back from the federal government from every dollar of taxes sent to Washington. Sometimes we have to use market mechanisms like cap and trade to put a cost on negative externalities in the public interest. There are economic costs involved, but as Palin recognizes and dismisses, revenues from the plan are targeted to alleviate those costs. Sigh. But a more interesting question: Does this mean that Palin intends to lead a campaign against cap and trade? Will there be more rallies and "drill, baby, drill"? It would be pretty amazing for Palin to go from Alaska governor to freelance oil industry lobbyist.
-- Tim Fernholz
