Chances are you haven't seen the video on youtube titled "If I wanted America to fail" which has the tagline: "The environmental agenda has been infected by extremism—it's become an economic suicide pact. And we're here to challenge it. " It was produced by a group called Free Market America which is a project of Americans for Limited Government and Citizens for Lower Taxes and a Stronger Economy. The narrator of the video lists off all of the things he would do if he wanted America to fail; which largely focus on energy and environmental regulations. The producers of the video believe that America should be unshackled from the chains of energy and environmental regulations, and only then can we prosper. Well I'm here to tell you they're wrong.
First, let me say that there is a very fine line between too little and too much regulation, but it is an important line that deserves intelligent debate and decision making, not right-wing populist propaganda videos. I'm not an environmental extremist, nor do I consider myself a liberal. But I am observant enough to realize that if fossil fuel energy companies operated without any regulation, the great nation of the United States of America would be a much dirtier, nastier place to live. Even with some regulation, the true cost of coal is much more than what is revealed with our cheap electricity rates.
To call for simply doing away with regulation is ignorance. Those who lament the lack of a "free market" obviously don't understand energy policy and the nuances of externalities. Do you think utilities operate in a free market? Do I and many Americans have a choice where they buy their electricity from? Can I choose to buy electricity that doesn't pollute the air I breathe or scar the Appalachian mountains? No, I can't, because the utility has a monopoly on customers in my region. That is far from a free market. And yet this video would have viewers pity the poor utility harmed by evil environmental regulations (that make our air cleaner to breath and limit the days children with asthma spend in hospitals during smog alert days in the summer).
The funniest and most ironic (unintentional as it was) piece of the video is this little gem:
(If I wanted America to fail...) I'd devise fictitious products like carbon credits and trade them in imaginary markets. I'd convince people that this would create jobs and be good for the economy.
While I'm not a huge fan of carbon credits, let me tell you about a little free market fictitious product that was much bigger player in the global financial meltdown that we're currently living through than any environmental regulation will ever be: synthetic CDOs. The fat cats on Wall Street fought against any regulation of these complex financial derivatives. Alan Greenspan, the chief of the Fed and free-market maven, stated: "The regulation of derivatives transactions that are privately negotiated by professionals is unnecessary. It hinders the efficiency of markets." Ha! How can someone labeled as a genius be so foolish to think that financial professionals will always operate ethically and with the good of the American public in their hearts. Who knows if more regulation would have prevented the meltdown of mortgage derivatives. But it may have prevented mortgage brokers to sell loans to people who knew they couldn't pay them back or bankers from packaging up groups of mortgages that they knew were crap in a way that the idiots in the ratings agencies couldn't see through. What we do know is that it wasn't regulation that brought down the global financial system. It was greed.
And that's the issue at the heart of it all isn't it? There would be no need for regulation if individuals and companies weren't greedy and operated ethically at all times. But we are greedy. We all are. It's human nature. When it comes between preventing a little more pollution or saving a few more dollars, most of us are going to opt to save more dollars. What's a little more pollution anyway? It's a big earth. We don't care what happens to pollution once it's out of our view.
I love the free market. I love it as long as it accounts for all the externalities it creates. But it doesn't, and that is why regulation is needed. The goal is to figure out the right amount of regulation that protects the environment and the public but also allows private companies to prosper. "If I wanted America to Fail" is a farce that preaches idealism that doesn't exist in the real world. Hopefully you are smart enough to realize this.