# How To End America's Deadly Coal Addiction



## EVDL Archive (Jul 26, 2007)

OpEd by Robert F. Kennedy, Jr highlights discovery of deep shale gas in the USA.

More...


----------



## PhantomPholly (Aug 20, 2008)

Will wonders never cease? Maybe something good has come out of Kennedy's stroke - he is finally coming to his senses that government regulation destroys the free market and also hurts the ecology.


----------



## Tesseract (Sep 27, 2008)

PhantomPholly said:


> ...government regulation destroys the free market...


I used to vote Libertarian, and I'm still very much a free markets kind of guy, but I can provide two recent examples of where blindly adhering to this ideology has led to unmitigated disaster: the wholly unregulated markets for credit default swaps (e.g. - what did in AIG) and mortgate securitization (e.g. - the housing boom, then bust).

No regulation is needed for markets when everyone is honest and there is a good balance between short term and long term profits and costs... and how often does that happen?


----------



## JRP3 (Mar 7, 2008)

Tesseract said:


> I used to vote Libertarian, and I'm still very much a free markets kind of guy, but I can provide two recent examples of where blindly adhering to this ideology has led to unmitigated disaster: the wholly unregulated markets for credit default swaps (e.g. - what did in AIG) and mortgate securitization (e.g. - the housing boom, then bust).
> 
> No regulation is needed for markets when everyone is honest and there is a good balance between short term and long term profits and costs... and how often does that happen?


Exactly. People love to pretend that all regulation is bad and that if left to their own devices people and corporations will do the right thing. History has proven that not to be the case.


----------



## JRP3 (Mar 7, 2008)

PhantomPholly said:


> Will wonders never cease? Maybe something good has come out of Kennedy's stroke - he is finally coming to his senses that government regulation destroys the free market and also hurts the ecology.


Of course that's not what he said. Not regulation in general, just mis guided regulation:


> By changing the dispatch rule nationally to require that whenever coal and gas plants are competing head-to-head, gas generation must be utilised first, we could quickly reduce coal generation and achieve massive emissions reductions.





> Natural gas comes with its own set of environmental caveats. It is a carbon-based fuel and its extraction from shale, the most significant new source, if not managed carefully, can have serious water, land use and wildlife impacts, especially in the hands of irresponsible producers and lax regulators. But those impacts can be mitigated by careful regulation and are dwarfed by the disaster of coal.


----------



## PhantomPholly (Aug 20, 2008)

Tesseract said:


> I used to vote Libertarian, and I'm still very much a free markets kind of guy, but I can provide two recent examples of where blindly adhering to this ideology has led to unmitigated disaster: the wholly unregulated markets for credit default swaps (e.g. - what did in AIG) and mortgate securitization (e.g. - the housing boom, then bust).
> 
> No regulation is needed for markets when everyone is honest and there is a good balance between short term and long term profits and costs... and how often does that happen?


Yes - there is a need for regulation to prevent FRAUD. That is what the credit default swaps and artificial strong-arming of the financial institutions to provide easy credit amount to.

When sovereign funds are large enough to disrupt the market, you do need regulation to prevent the 500 lb gorillas from causing the boom bust cycle repeatedly - that's why they developed the S.E.C. However, in recent years our Congress has repeatedly BEEN the 500 lb gorilla, or turned a blind eye (payoffs?) to obvious ponzi/pyramid schemes. When the protectors become your biggest threat, it's time to kick them out.

One interesting concept I heard simply required owning any artificial financial instrument (e.g. "Stock") for a minimum of 6 months, and increasing the time period by another 6 months for each level of abstraction (e.g. "Corn Futures" is a first order derivative; now they have 2nd and 3rd order derivatives - pure gambling). Pure gambling should be reserved for places like Las Vegas; it should not be allowed to thrash the entire civilization just so a few gambling addicts can play games.


----------



## PhantomPholly (Aug 20, 2008)

JRP3 said:


> Of course that's not what he said. Not regulation in general, just mis guided regulation:


You are correct - and there are simple guiding principles to which those whose philosophy of regulation I object do not wish to adhere to.

It is simple really. It is the government's job to prevent FRAUD or ENDANGERMENT OF LIFE. It should never be used to artificially create winners and losers, which they love to do under the disguise of "fairness."

*The Principles:* 
- Congress should pass no law which artificially creates winners at the expense of losers
- Congress should pass no law specifiying HOW a regulation aimed at protection from endangerment should be accomplished (violates the principle above - creates winners and losers). 

*Example 1:*

Congress wants to clean up the environment, but there are a bunch of old legacy coal plants generating < 20% of the nation's power but creating 50% of the nation's pollution. The cause? Congress passed laws protecting the coal industry - in violation of the first principle (and clearly a corrupt use of power). The effect? Power is actually more expensive, while generating more pollution. The solution? Simply tax in exponential proportion to pollution generated, leave the solution up to industry.

*Example 2:*

Industry wants to build new solar power plants, but Labor wants to strong-arm industry into using Union labor only. Unions file harassment suits against industry (no similar suits filed against Unionized initiatives). Government ALLOWS THE SUIT (corruption - creating artificial winners and losers) against JUST that business. Since the issue is the environment, the outcome of the suit should be applied to ALL such initiatives, not just the party sued - preventing artificial winners. Result would be NO union jobs, because the additional cost of environmental compliance would preclude profitability at Union pay rates.

Correct outcome should be government standards for ecology, all other suits should be dismissed with heavy fine for harassment.

*Example 3*: Providing a government seal of excellence (Triple-A rating from the S.E.C. - creating false confidence) to a product (mortgage backed securities) which is a derivative (essentially a gambling instrument) backed by a real commodity (homes) subject to artificial manipulation (the Clinton years' CRA bill - not being partisan 'cause folks on both sides of the aisle voted for it).

This particular FRAUD is the single largest example in history CAUSED by government - which is why they should NEVER be allowed to regulate in this manner. Bernie Madoff was an amateur by comparison.

Back this up and look at a way Government might have legitimately regulated the whole situation. The STATED goal of CRA was to eliminate discriminatory practices of lending based on race - a worthy goal - and to put more people in homes of their own - a dubious goal since it is attempting to "change the outcome" of the free market. 

All the government needed to do was require reporting on lending and, in the event that such discrimination was found, jail each and every Director, VP, President; and Board Member who had any knowledge of this practice for the rest of their lives for fraud. The problem would have disappeared without disruption to the economy nor artificial bubbles to the housing / building market.

Additionally, with this "solution" we would have seen a modest increase in the number of American homeowners. Why? Because our markets WERE improving, and jobs were being created. A rising tide lifts all boats. But the artificial bubble over-inflated the gains, and the result was a collapse - wiping out the gains and leaving millions homeless. Fraud.

The problem came in when Congress, in their arrogance, decided that they could change the outcome of the free market by providing easy credit. Like Price and Wage controls, the market cannot be "tricked" in this way - it will simply have a negative impact over the long term (losers) while artificially creating a few "in the know winners" in the short term. This, my friends, is fraud by regulation - and every Congressman who participated in it (or even failed to report it as a few did) should be spending a long time making small rocks out of big rocks.

*Conclusion:*

People are crooked and will cheat and steal given the opportunity. It is for this reason that the financial markets, upon which ALL of us depend for our security, should be regulated against fraud and manipulation.

However, the moment Congress crosses the line from protecting against fraud and into telling them HOW to do it or WHO can do WHAT, Congress becomes the greater fraud.


----------

