Confused Liberals

On the leftist Think Progress's "Wonk Room" blog, we see a typical misinterpretation of libertarianism by those on the left, that betrays a common inconsistency in the left's attitude toward government. The issue at hand is the debate between different variations of cap-and-trade programs -- whether a "cap-and-auction" program like the one recently proposed by Senators Lieberman and Warner, or a more libertarian "cap-and-rebate" (or "cap-and-recycle", as economist Peter Barnes calls it) program.

In all cap-and-trade programs, the government would auction off carbon-emission rights to companies, granting them the right to a certain amount of carbon emissions. The "cap" in this is the overall industry-wide limit on carbon emissions, and the "trade" is the ability of companies to trade the emissions "credits" between themselves. For example, if Company A's carbon emissions are less than its quota, it can sell the remaining credits to Company B, whose emissions would exceed its initial quota. The idea is that those with lower emissions will make money by trading unused credits and those with higher emissions will have to buy credits from greener companies. This provides incentives for lower emissions, and allows flexibility within industries by allowing some companies to emit more and some to emit less, as needed.

In the variation of this program proposed by Lieberman and Warner, the government would keep all proceeds of the initial auction (in which emission rights were first sold). The issue is that the funds are not reserved for any specific program. This raises the question: what would the government likely do with this substantial influx of funds?

The more libertarian version of this program, as put forth by Peter Barnes, is the same in its fundamentals, except that the proceeds of the initial auctioning would be returned to Americans in the form of rebates. The logic behind this is that, 1) these rebates would help Americans in our struggling economy, 2) Americans would best know how to spend this money for their benefit, as opposed to the government, and 3) the government does not "own" the emissions rights that it is auctioning off, so why should it keep the proceeds? As Barnes puts it, "If you assume the atmosphere belongs to government, then cap-and-auction is your choice. If you assume the atmosphere is a gift to everyone, then cap-and-recycle follows."

Since the proceeds from auctioning these emission credits would likely be on the order of trillions of dollars over the next 40 or so years, the question of where the funds should go is certainly an important one. Libertarians like Barnes realize that if the government keeps the proceeds, they are likely to be spent irresponsibly. Senator Bob Corker called the question of what to do with the funds "the mother and father of all earmarks", referring to the likelihood that the funds would go to legislators' pet projects. Most likely, lobbyists from various industries and special interest groups would determine where most of the funds went.

The leftists at Think Progress find Barnes' ideas to be extremely offensive. They say that Barnes' idea is "founded on the libertarian belief that government shouldn't be trusted with any money." They go further, characterizing Barnes' ideas as "corrosive" and "anti-American" since they imply that the government would not necessarily spend the funds in ways that best benefited the American people.

Coming from the same political group that, upon gaining majorities in the House and Senate in 2004, spoke passionately of the need to fight corruption, earmarks, special interests, and lobbyists' influence, this is truly unbelievable. When Republicans were the ones wasting billions of taxpayer dollars on bridges to nowhere and giving handouts to their favorite corporate lobbyist groups, Democrats rightly cried foul. Apparently, now that Democrats are in power, any implication that the government is wasteful or serves special interests is "corrosive" and "anti-American".

The truth of the matter is that our government is extremely wasteful and very frequently does not represent the interests of the American people. Liberals know this, conservatives know this, and anyone feigning outrage at such a suggestion should not be taken seriously. Obviously, Think Progress just doesn't like libertarians, and was desperate for a way to dismiss Barnes' suggestions.

No doubt they see these funds as the key to establishing one utopian socialist program or another. They also doubtless want the government to keep these funds, because in reality they don't trust Americans to do what is best for themselves. They believe that the best way to help Americans is to give lots of money to politicians and then let these "representatives", in their infinite wisdom, tell Americans what to do.

If this is an unfair assessment of these liberals' ideas, why would they be so hostile to the idea of giving Americans these funds so that they can help themselves? What ever happened to liberal mistrust of government? Do these liberals honestly think that the government wouldn't use the funds, at least to some extent, to support corporate and other special interests? This issue should be one where liberals and libertarians agree with each other, yet these liberals seem so enamored with their vision of the savior-state that they have become wilfully blind to the reality. The reality is that government is wasteful and beholden to special interests. The reality is that Americans know better than Washington politicians and bureaucrats how to help themselves.