Saturday, February 21, 2009

EPA + CO2 = < GDP

The Environmental Protection Agency (EPA) and the Obama administration are preparing to put more regulations on carbon dioxide emissions. Since many in the scientific community blame carbon dioxide for causing global warming, Lisa Jackson, the new EPA administrator, wants to find the latest research and prepare documentation that will explain our need for such regulations.

(In the spirit of full disclosure, I am personally a huge skeptic when it comes to whether global warming is actually happening and whether we are causing it, if it is. So, I don't believe that the new regulations would be necessary anyway.)

The fact is the new restrictions on carbon dioxide that have been proposed will raise the costs of energy like gas and coal. The price of manufacturing cars will go up as well because the manfactures would have to reinvent a car that will be able to comply with the new regulations.

This would be the last straw for the Big 3 in Detroit. If it costs Detroit more to make the cars, then, they will have to pass that higher cost onto the consumer in order to stay profitable. The already high price of cars will skyrocket, and people won't be able to buy the cars that they want, especially with the credit crunch in this country.

The three "too big to fail" pigs in Detroit will have to keep asking the government for more of OUR money because the Obama administration and the Democrats would be making it impossible for them to rebound and become profitable.

General Motors (GM), Chrysler, and Ford are getting attacked from both flanks in their fight for survival and profitability. The UAW is digging in their heels to demand that their workers continue to be paid way more than anyone else in the industry. They won't allow any of them to lower the wages. Although, they made some significant compromises. They eliminated jobs bank (which allows workers to receive 95% pay and benefits for a year after they were laid off from the Big 3), won't give automatic raises, and limited overtime that workers could get per week. Even with the compromises that they made, the UAW is still putting the Big 3 in a distinct disadvantage in their competition with other car manufactures.

Now that they were finally able to get the UAW to bend a little, why is the EPA wanting to make it even harder for them to turn around their businesses by making them retool all of their plans because of more restrictions that Lisa Jackson and most of the Democrats want to force them to comply to? These new requirements will make GM, Chrysler, and eventually Ford need more time and more of our money to make them viable again. GM and Chrysler have already asked for more money from the government this past week to stay alive. If Congress ever gets a backbone and says, "No" to them, it will guarantee bankruptcy and most likely bring about their fall.

The new EPA regulations would be the final nail in their coffin, if it comes to pass. They are already teetering on the verge of collapse without this kind of "help" of the administration. It is like a lifeguard trying to save the drowning man by giving him a ball-and-chain instead of a life jacket.

The automobile industry is not the only ones that would feel the effects of this ill-advised policy. Every industry will be hit with the higher prices of coal and gasoline. It will cost more to transport goods across the country and worldwide. Therefore, they will also have to pass the higher cost of transportation on to the consumers. As a result, consumers will buy less of their products or stop buying them altogether. After they stop selling, they will have to start laying people off because of a lack of sales. If sales dip too low, they will have to go out of business which will put everyone in the company out of work.

The rise in regulations will also hurt those of us that have the misfortune of having to live, eat, or leave the house. The cost of heating and air will skyrocket. Unless you want to live in the winter using just your fireplace in the winter (assuming the EPA won't try and regulate the carbon emissions coming from your fire), you will pay more to stay warm. Also, staying cool in the summer will also be much more costly.

It'll cost more to take the kids to school or go buy groceries. It'll also cost more to buy those groceries because of the higher transportation costs the companies will have to pay to get the food to the store.

This is just a bad idea any other time, but it could be a catastrophic one at a time such as this. The economy is holding on by a thread already. We don't need something like this to unravel that one string. The gross domestic product (GDP) will plummet, unemployment would go into the double digits, inflation will go nuts, and it could get us in a full blown depression.

Obama, just say no to the environmentalists. If the auto industry and the rest of economy rebounds, then you can try and get more regulations in gradually, but you can't sacrifice this nation's economy long term for the short term benefit of appeasing part of your base.

You need to put our money where your mouth is. You need to show that post-partisan spirit that you claimed to have throughout your campaign.

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