Senior editor of Marketplace, Paddy Hirsch, with another of his whiteborad explanations this time explains how Cap and Trade for CO2 emissions is supposed to work. He use a pie eating metaphor. Obviously it would be a bad thing if we ate all the pies and left none for our children.
MaxWildersays...

It's good to try to keep people informed about this future system, but the four sons metaphor is really unnecessary. Cap and trade is not a difficult system to understand, and he could have just started with businesses putting out pollution and greenhouse gasses.

Also, his arguments at the end are entirely one sided. There is a very real danger that the cap and trade system could do terrible harm to our economy and accomplish nothing for the environment since many polluters could pull up stakes and move to another country that is not concerned about pollution.

rougysays...

>> ^MaxWilder:
There is a very real danger that the cap and trade system could do terrible harm to our economy and accomplish nothing for the environment since many polluters could pull up stakes and move to another country that is not concerned about pollution.


Then let them go and nationalize the production centers that they leave behind, then start making the products ourselves.

Call it communism if you want.

We can no longer afford to let the welfare of our economy and ecology rest on the whims of the people who are only in it for the money.

NetRunnersays...

I think we can only be responsible for what happens in our borders; the fact that we don't own the world doesn't mean it's pointless to try to improve the situation here.

It's not as if heavy industry can easily move, it's not as if our car-driving population will leave.

It's not as if there's no other reason for companies to operate in the US, aside from our terribly lax pollution laws.

Memoraresays...

cap n trade meet exxon mobile, who would just as soon nuke sons 2, 3, and 4 AND dad AND the delivery truck and snatch All the pies for themselves rather than submit to such restrictions.

gtjwkqsays...

Keep the government out of it, they can't even deliver the mail profitably. Treat it like damage to private property and let the courts punish offenders.

Government => central planning => bad idea
Private citizens => best ideas are rewarded => everyone wins

rougysays...

>> ^gtjwkq:
Keep the government out of it, they can't even deliver the mail profitably. Treat it like damage to private property and let the courts punish offenders.
Government => central planning => bad idea
Private citizens => best ideas are rewarded => everyone wins


Central planning is a great idea. It's how things actually get done.

Waiting around for some rich people to decide how they can best get richer is foolishness.

The free market is not the hand of God, and leaving the welfare of our future in its hands is pure madness.

The US Postal service isn't supposed to turn a profit, by the way, and to the best of my knowledge they deliver to more places in the US, more cheaply, than any private carrier extant.

And by the way, in theory at least, "we" are the government.

NetRunnersays...

>> ^gtjwkq:
Keep the government out of it, they can't even deliver the mail profitably. Treat it like damage to private property and let the courts punish offenders.
Government => central planning => bad idea
Private citizens => best ideas are rewarded => everyone wins


Cap and trade is the exact opposite of central planning. It just forces the market to deal with a scarcity that it currently refuses to acknowledge.

The beauty of it is that it allows for your little conservative religion to finally be useful towards solving the problem, rather than just making things worse.

Your answer is a bit like saying we shouldn't have a rule that cars need to drive on one side of the road, instead we just need to provide a court to settle the damages once they happen.

MaxWildersays...

I'm entirely in agreement in regulating industry in regards to environmental protection, I'm just saying we need to simultaneously have a plan about how to deal with countries less concerned with ecology than we are. Otherwise we are simply encouraging businesses to kill the world from the other side of the world, with the end result still being that the world is uninhabitable.

Yes, we may do a lot of good with the industries that are stuck here, I'm just worried about the ones that are not.

NetRunnersays...

^ I agree, and I think we do need to join in with the diplomatic efforts with the G20 and UN to work on international environmental regulation.

Here's hoping Obama does more than just talk, and actually gets an environmental treaty signed and ratified by Congress.

A lot of the international efforts were falling flat because the US refused to sign on, if we change our stance it should be a big help in putting pressure on China and India to follow suit.

gtjwkqsays...

>> ^rougy:
Central planning is a great idea. It's how things actually get done.
Waiting around for some rich people to decide how they can best get richer is foolishness.
The free market is not the hand of God, and leaving the welfare of our future in its hands is pure madness.
The US Postal service isn't supposed to turn a profit, by the way, and to the best of my knowledge they deliver to more places in the US, more cheaply, than any private carrier extant.
And by the way, in theory at least, "we" are the government.

free market is you and me, it's consumers making decisions with their purchasing power, leave God out of this and don't presume it's invariably "controlled" by the selfish "rich". I'm OK with leaving our welfare in our own hands, it's the best incentive for people to care about it.

US POSTAL NOT SUPPOSED TO TURN A PROFIT? Stop criminalizing profit, it's a GOOD thing, wasting money and NOT turning a profit = bad, it means you're wasting other people's money (including taxpayer's money since it's a govt run service) to do a simple job that is delivering stuff. "more cheaply" you say? Did you take into account the "not being profitable" in your price calculation, the costs for society?

I don't get your "WE are the government". Unless you work for the government, you are a private citizen and you are paying for its crappy services. Unlike in a free market, you can't choose whether or not to pay and they don't have the incentive to do a good job because they don't care about profit.

gtjwkqsays...

>> ^NetRunner:
Cap and trade is the exact opposite of central planning. It just forces the market to deal with a scarcity that it currently refuses to acknowledge.
The beauty of it is that it allows for your little conservative religion to finally be useful towards solving the problem, rather than just making things worse.


It's not the opposite of central planning, it's just applying a rule so people can start caring about something YOU think they don't care about.

Do you think, really, that a market is less capable of defining scarcity than a politician?

The problem with not understanding politics is not seeing long term consequences to a rule. Most rules have the best intentions in mind and anyone can see their obvious short term benefits, but are completely blind to the disaster they usually create in the long run.

NetRunnersays...

>> ^gtjwkq:
Do you think, really, that a market is less capable of defining scarcity than a politician?


When it comes to environmental concerns, the answer is absolutely yes.

The problem with not understanding politics free markets is not seeing long term consequences to a rule. Most rules businesses have the best intentions in mind and anyone can see their obvious short term benefits, but are completely blind to the disaster they usually create in the long run.

It's a lot easier to change rules down the road than it is to fix the environment once it's been polluted. To put it another way, it will be far more expensive to just let things go as they are, than to take preventive steps now.

gtjwkqsays...

>> ^NetRunner:
The problem with not understanding politics free markets is not seeing long term consequences to a rule. Most rules businesses have the best intentions in mind and anyone can see their obvious short term benefits, but are completely blind to the disaster they usually create in the long run.


Clever. You do realize that, throughout human history, governments were responsible for FAR more destruction of property and human life than any business ever could? Just out of curiosity, the current economic crisis in the US, do you think it's largely the fault of businesses or govt? You sure you're being smart letting them be responsible for the environment?

Sounds like you underestimate "free markets" like you probably underestimate freedom in general.

For instance, if I apply your thinking to freedom of expression, we should totally have censorship because letting people express freely would lead to all sorts of stupid ideas that would make a lot of sense initially, so most people would fall for them in the short run, not realizing their disastrous long term consequences. So we need politicians who are smarter than everyone else to ban ideas that are dead wrong.

Free markets are a lot more adaptable and creative than you and I can imagine. Just like freedom of expression, what is the great idea or invention humanity is going to come up with now? I don't know, and neither do you.

You see an environmental problem and you tell me free markets can't solve it better than a politician. Maybe you should run for office.

NetRunnersays...

^ I think you misunderstand my position. I don't see government and free markets as being polar opposites locked in a struggle with one another for dominance, nor do I believe that "freedom" is the exclusive property of one or the other.

My view is more that the two exist in a symbiotic relationship, like the rulebook for football, and the game of football. You can't really have one without the other.

It's certainly possible that rule changes could be detrimental to the sport, but it's also possible rule changes could make the game safer, or more fast-paced, or more compatible with ad-funded television coverage.

To stretch the metaphor to the breaking point, if we're seeing excessive wear and tear on the fields after the game, what should we do? Just leave it up to the teams to curtail their own activity during games, or take it upon themselves to clean up the field without a legal or financial incentive to do so?

All we're talking about is saying that we'd like to add a new metric for measuring damage to the field, and letting each team have a certain amount of damage they can do during the season. Furthermore, we'll let them trade those credits between themselves. If they do damage without a credit, we dock their score for the game, so if they're smart they'll try to get through the season under the limit.

In other words, the idea here is to rely on the market's inventiveness to solve the problem, we're just changing their incentives so it becomes dramatically more likely that they will actually address it.

I say it often, but in a sane world, cap and trade would be the environmental policy conservatives would champion.

gtjwkqsays...

^ Let consumers and consumer groups who care about the environment boycott industries that harm it. Let private companies that check and endorse industries that respect the environment inform the consumers. Let environmental friendliness become a competitive advantage when the environment becomes a concern. Let news organizations and environment activists denounce industries that harm the environment. Let courts punish those who harm the property of others. The list goes on...

The problem with "shaping" the market to do what you want is that it has already been done many many times over and over, usually you don't get what you want, you just distort the market into all sorts of unforeseen consequences, and you open yet another precedent for more intervention and abuse to "correct" that distortion that you created in the first place.

In fact, what we have are already extremely distorted markets, and you're thinking cap'n trade, which is just another great idea, would just fly in and save the day?

I have to take a step back though, because the reason you would suggest "correcting" a free market is because, well, you don't trust it, right? Just say it. Left to its own devices, bad things will happen and free society will inevitably self-destruct and implode planet Earth. If that's the case, then it's where you and I disagree. There's a certain understanding about free markets that, when you get it, you know a free market has a tendency to correct itself with time. Even if it takes a while. I believe that's also the case when it comes to the environment.

Just like freedom of expression: I'm sure there's a LOT of crap out there, but I know that things that make sense, ideas that work, philosophies and knowledge that help us instead of deceive us, they end up staying. The rest gets slowly culled out.

It's not a "faith in humanity" thing, it's more like an understanding of the mechanisms, already in place, that favor this kind of selection.

You may have noticed I love making the free market <--> freedom of expression comparison a lot, not football or traffic, etc. For much of our history, our ancestors couldn't give a rat's ass about free speech, hell, not even 200 years ago, most people thought slavery was OK, or that women shouldn't be allowed to vote, etc. Today we know those ideas are absurd, yet they were unquestionably accepted by the majority not too far back.

Today, the concept people are entirely unfamiliar with in our own age is that of "economic freedom". We don't have it. We don't even know that we don't have it, it's like being born in a prison. Actually, it's more like almost the entire prison population is convinced that prison is better than being free, because that's what the warden and prison guards tell us, he's in charge of educating prisoners anyway, so that's what he's told them over and over to foil any escape attempts.

So when I talk about free market, it's like a chimera, most people can't imagine it, some even think it's bad, and few people care. I hope our descendants can laugh at us about it.

NetRunnersays...

>> ^gtjwkq:
^ Let consumers and consumer groups who care about the environment boycott industries that harm it. Let private companies that check and endorse industries that respect the environment inform the consumers. Let environmental friendliness become a competitive advantage when the environment becomes a concern. Let news organizations and environment activists denounce industries that harm the environment. Let courts punish those who harm the property of others. The list goes on...


Perfect plan. Why then did slavery go on for thousands of years? Certainly there would have been high-minded people who would've boycotted slave-produced goods, right? That would've led directly to slavery being abolished, right?

Or perhaps it was a market that refused to recognize that some things, like people, are not a commodity to be bought or sold. It took government to put an end to it by changing the definition of human rights, or arguably just the definition of human.

The problem with "shaping" the market to do what you want is that it has already been done many many times over and over, usually you don't get what you want, you just distort the market into all sorts of unforeseen consequences, and you open yet another precedent for more intervention and abuse to "correct" that distortion that you created in the first place.

Why ban murder or theft then? Clearly that hurts the protection racketeers and organized crime syndicates, who obviously serve a vital role in society since they remain economically viable, and "big police" hasn't been able to totally eliminate them, so why keep trying?

In fact, what we have are already extremely distorted markets, and you're thinking cap'n trade, which is just another great idea, would just fly in and save the day?

I know! In the good old days you could require 100 hour work weeks, never give any paid leave, benefits, pension, and you didn't have to worry about minimum wage cutting into your profits.

Oh yes, and can't forget all the child labor. Ahh, back in the good old days, there was no public education, and kids just went straight to work in the fields & factories...

I'm not sure why libertarian-minded people put forward this trivially disproven canard about how government interference in the economy have never, ever, in the history of mankind done anything that was a net benefit to society.

There's a certain understanding about free markets that, when you get it, you know a free market has a tendency to correct itself with time. Even if it takes a while. I believe that's also the case when it comes to the environment.

Many religious people tell me this same thing about God. Once you "get it", you realize that God's plan always works out for the best, even if it takes a while and lots of horrible things happen in the "short run."

That is faith, not reason. I can respect faith for what it is, but don't try to pass it off as some sort of scientific conclusion beyond debate. Your view of economics is equivalent to intelligent design -- it's "science" where the conclusion is the starting point for the the theory.

I'm not saying markets can't produce positive results, but I am saying there are no guarantees the the results it produces are morally superior to one that's been shaped by law. There's no guarantee laws will produce the desired results either, but many have, and have been successful beyond people's wildest dreams.

Just like freedom of expression: I'm sure there's a LOT of crap out there, but I know that things that make sense, ideas that work, philosophies and knowledge that help us instead of deceive us, they end up staying. The rest gets slowly culled out.

Only if people actually read their history. Only if information isn't manipulated. Only if people care. The scenario in 1984 is just as likely to be enacted by private industry as it is by government.

I don't know that a law could guarantee us a perfectly objective view of history. I do think the best law for that is the 1st amendment, which protects people's freedom of speech. By the way, that's a big "intervention" in the economy too, especially if you outlaw fraud!

You may have noticed I love making the free market --> freedom of expression comparison a lot, not football or traffic, etc.

I do notice that you repeatedly conflate them, rather than provide any practical real world examples that support your theory. Has a "free market" as you would define it ever existed? If not, how would you know how "free" it really would be?

So when I talk about free market, it's like a chimera, most people can't imagine it, some even think it's bad, and few people care. I hope our descendants can laugh at us about it.

It is very much like a Chimera! It's a mythological creature that nobody believes was anything but a convenient storytelling device, and while people can imagine that genetic engineering may one day let us create one, what would we make it look like? It's been depicted in thousands of different ways, and it's unlikely you could ever get people to unanimously agree that any one interpretation of it is the one and only true Chimera...

Our descendants will laugh at us, because they will say that by the 21st century the laissez-faire economic theory has resulted in horrors for humanity time and time again, and yet people still clung to it despite that.

They will also laugh (or cry) about how we so shortsightedly wiped out much of the Earth's ecosystem with our hubris, fueled by adherence to thoroughly disproven and discredited absolutist theories such as yours.

gtjwkqsays...

^ Slavery, murder, and theft are activities that require the use of force, they don't belong in a free market. Do you even know what the notion of a free market is? The reason we have a government is so that it retains a monopoly over the use of force, taking it out of the hands of society. You're making a fool of yourself.

Poorly paid workers is a problem of too little demand for work, a demand that grows once an economy itself grows and requires more production. Working conditions in China were awful and still are, but things over there are a lot better today because China is growing and will most likely have the richest consumers in the world not many years from now.

LOL, you think public education saved children from labor? Yeah, it's a great idea to have our children being educated by the government, let the wolves take care of our lambs.

A libertarian is not an anarchist: Government is a necessary evil. Emphasis on "necessary" and "evil". So the logical conclusion is that it should exist, but it should be the smallest possible (less evil). The government is necessary to avoid those crimes I mentioned before that envolve force and breach of contract. It is not necessary, however, for any purpose that does not require the use of force.

*roll eyes* I'm an atheist dude. It's not faith, I don't do faith. It's more like "I can't explain it all here" and also because it'll probably depart from your current "reality" so bad that you'll have trouble understanding it (not sure though, I don't know you). If you think I'm copping out, I can refer you to some books. I consider myself a very rational person, so I understand where you're coming from, but don't say stuff like that.

No real world evidence of free markets?? What about Singapore, Hong Kong, Taiwan, South Korea? What about the US for almost 200 years being the greatest country on Earth because of its freedoms? What about China, do you think its prosperity comes from the fact that its the fakest communist regime EVER or because of the economic freedom they enjoy over there?

Free markets are an ideal, yes, but prosperity is found in any country that is close to it. What can anyone say about prosperity linked to, say, communism? I know communism is an ideal too, but anything close to communism in history or today is usually linked to poverty and mass murder.

Oh and congratulations, Cap'n Trade will probably go through, more taxes on a ruined economy. WHAT A GREAT IDEA. Thank heaven I don't live in the US.

I love Peter Schiff's comments on it: http://www.youtube.com/watch?v=4MmlElFmJKI

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