Cap and Trade - Adam Smith was Right ,Again

The House recently passed a "cap and trade" bill to regulate the emission of greenhouse gasses. Supposedly, if you buy the logic, it will help us become more energy independent and reduce our consumption of fossil fuels by setting limits for use of these things and then gradually reducing them.

But as with all proposals in Congress, it is good to read the fine print. The bill also includes a new tariff which would, beginning in 2020 impose new tariffs on trade with countries that don't follow the same standards that we do. Sponsors of this nonsense argue that American industry needs "protection" through a tariff from having to compete with countries who don't follow the standards. Specifically mentioned were steel, cement and a couple of other industries that are always at the government trough trumping up reasons why they don't need to compete. One year is it "we are a vital industry." Another is "our competitors are subsidized." Another it is "they don't follow our higher standards." In all years it is a way to impose costs on the American consumer that are concentrated in the industries that are seeking the help.

In the Wealth of Nations (Volume 1, part XI, p. 10) Smith comments "The proposal of any new law or regulation which comes from [businessmen], ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it."