Small Business Cheers   Leave a comment

You’ve probably heard the hysterical wailing and gnashing of teeth in the media following President Donald Trump’s withdrawal from the Paris climate agreement. Dogs will be mating with cats and polar bears with penguins any day now. It’s the end of the world as we know. President Trump cited a National Economic Research Associates’ study in his speech and  the New York Times, in one of its most hyperbolic editorials in recent years, heaped disgust and disdain on the citation of this study:

“Mr. Trump justified his decision by saying that the Paris agreement was a bad deal for the United States, buttressing his argument with a cornucopia of dystopian, dishonest and discredited data based on numbers from industry-friendly sources.”

Image result for image of climate changeThe study (which you should read and decide for yourself, but I found credible … and alarming) speculated that meeting the emissions targets could cost 2.7 million jobs, with manufacturing hit particularly hard. Overall growth would suffer. Professional economists today are skeptical of such studies, and the authors definitely hedged their bets while writing it, but you don’t even have to read such studies to know that more industrial controls via government will cost jobs and productivity. That should be common sense and history bears it out. Financial market’s responded positively to Trump’s move to withdraw, which makes you wonder what the media hysteria is about.

What exactly did we decide to opt out of? The US declined to plot decades of mandatory, top-down regulations governing the precise pace of technological innovation concerning greenhouse gases. That appears to have reduced some economic anxiety, perhaps even made some businesses breath a sigh of relief.

As someone who lives in a cold climate where heating our homes is not something we can choose not to do, I know I felt a bit of relief to know that bureaucrats in Paris would not be driving up the cost of the fuel I require to heat my home in an attempt to control the global climate.

 

Image result for image of climate change debunkedThe New York Times’ freak-out makes it seem that to be “friendly” to “industry” is enough to discredit what you say. You don’t need to know what was said and you certainly needed look at the data they used to support their conclusion. Knowing they’re “industry-friendly” is enough to disqualify any opinion, no matter how well supported, they might have. It’s like arguing economics with a socialist who uses the Marxist trick of dismissing any economic logic on grounds that its source is a member of the bourgeoisie and therefore intellectually trapped and unable to see socialist truth.

So any study paid for by those most affected by a policy must automatically discredit itself. “Industry” is supposed to be a bad thing. To be “friendly” to “industry” is proof enough that no one should ever pay attention to what you say.

But if you read the editorial, you see the NYT’s then complains that Trump ignored the advice of top industry “experts”:

Perhaps most astonishing of all, a chief executive who touts himself as a shrewd businessman, and who ran on a promise of jobs for the middle class and making America great again, seems blind to the damage this will do to America’s own economic interests… America’s private sector clearly understands this opportunity, which is why, in January, 630 businesses and investors — with names like DuPont, Hewlett Packard and Pacific Gas and Electric — signed an open letter to then-President-elect Trump and Congress, calling on them to continue supporting low-carbon policies, investment in a low-carbon economy and American participation in the Paris agreement.

 

Image result for image of climate change debunkedWell, that’s interesting. Elon Musk (Tesla) resigned as an advisor in the Trump administration in protest of the Paris pullout. Most CEOs won’t go that far, but many of the heads of the largest US companies are on record in support of the Paris climate agreement. Again, the New York Times reports:

Many prominent business executives have advocated for policies to address climate change. They’ve made the case not just on environmental grounds but on commercial ones, saying that American competitiveness would suffer if the United States abdicated leadership on climate.

It’s an entirely different picture among small- and medium-sized businesses, which make up 90% of the employers in the nation. Loud cheers went out among these owners and managers when Trump pulled out. A report from Toledo, Ohio:

“While multinational corporations such as Disney, Goldman Sachs and IBM have opposed the president’s decision to walk away from the international climate agreement, many small companies around the country were cheering him on, embracing the choice as a tough-minded business move that made good on Mr. Trump’s commitment to put America’s commercial interests first.”

What could possibly cause such a split? It really comes down to crony capitalism. Large companies are fine with the regulations, and even advocate for them. Smaller companies employing a few hundred people – which account for half of private sector employment – are almost universally opposed. There really is no such thing as “industry interests” in the political arena. There are well-connected big businesses versus everyone else. I’m in favor of the free market, but we need to be honest that the political influence of big business is not always in the best interest of everyone else.

 

Image result for image of climate change debunkedFor more than 100 years, big business has lobbied extensively for more intense government controls over trade, enterprise, labor, and property in general. Go on. Read some history which will show that government controls can benefit existing companies in the competitive process while hobbling upstarts and innovators. The large, established businesses can bear the new costs while their smaller competitors cannot.

And, thus we have a political split between big and small business over the Paris climate agreement. Whenever you hear that politicians are gathering “stakeholders” from the “business community” to find out their thoughts, become suspicious. That word “stakeholders” is synonymous with “special interests”. The interests of large companies are frequently different from the interests of free enterprise in general.

Why would the “progressive” voices at the New York Times weigh in on behalf of large business against smaller business? Well, it is itself a big business, which means … no matter what they pretend, they aren’t on the side of the “little guy”. Historically, progressives and corporate interests have often linked arms to build the state at the expense of everyone else. This includes the legions of activists who believe they are fighting for the little guy when in reality they are rigging the system to favor elites. If you drill down just a bit to the pressure-group politics behind the Paris agreement you find a partnership of government, various corporate interests, and ruling class intellectuals trying to skew the system in their favor.

The Paris agreement is not really about magically manipulating the global climate to take a certain shape in another century. That’s probably not even possible, given the size of the global climate, our current technological level and the fact that the planet has cyclically warmed and cooled for billions of years without any help from humans. We might as well just start throwing our virgin daughters to the the god Hephaestus in the same way the ancient Germans did to Ullr back when the glaciers were encroaching in the alpine meadow. It’ll have just about the same effect. And in reality, that is what we would be doing if we crippled the US economy to satisfy the Paris climate agreement … sacrificing our children’s future in order to appease an idol of man’s imagination. By choosing not to walk lockstep off an economic cliff, the United States keeps its options open. It can still try to affect the climate through environmental improvements, but without shipping trillions of dollars to the 3rd world that we might need to adapt to infrastructure damage and other issues tied to global climate change.

 

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