Thin Air Meets Hot Air: Monetary Policy and Climate Policy Collapse Together

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Two favorite
authors of mine now have books out with the same title — Meltdown.
They don't talk about the same thing, but I see strong connections.
One takes on thin air; the other tackles hot air. Both oppose current
political state policies.

Creating money
"out of thin air" has been the stock-in-trade of the wizards
of the Federal Reserve. Every ruler attempts this gambit, so he
can seem to be able to finance all the wars he can profit by and
to buy all the votes needed to stay in privileged rule, but none
gets away with it forever. Our current economic depression is the
expected result of no longer getting away with it. The gig is up.
The piper must be paid. This "thin air" is what Meltdown
by Thomas E. Woods is about. It's the freshest blockbuster.
Hot off the shelf. It deals with my oldest interest – economic
freedom – by dealing unflinchingly with the Federal Reserve
and its failed inflationary framework. Woods masterfully
explains why the stock market collapsed, the economy tanked,
and government bailouts will make things worse.

Creating catastrophe
out of "hot air" has been the stock-in-trade of vanguard
protectors-of-the-planet since the early seventies when these alarmists
cried out about a coming ice age. Nimbly, alarmism shifted from
freezing to frying as some slight warming occurred. Even more nimbly,
"global warming" has morphed into simply "climate
change," upon a pause in warming. Patrick J. Michaels' Meltdown
confirms the predictable distortion of "hot air" global
warming by scientists, politicians, and the media.

Monetary policy
and climate policy were monolithic untouchables. Monetary policy
was Hamiltonian centralist guiding wisdom utilizing an impartial
Federal Reserve group above politics to steer the ship of state
through steady inflation while avoiding crashes. Only in the Colonial
beginning was there debate about monetary policy. Jefferson lost
that debate. The debate is forcibly being taken out of Federal
Reserve hands now.

Climate policy
has been chiefly Al Gore's vision of required wrenching transformation
by mankind in order to restore balance to Mother Earth, acting always
out of achieved consensus and settled science. There was never debate.
Climate alarmists don't debate. This debate, too, is being taken
out of alarmists' hands now.

Besides,
current headlines reveal just how hard it is today to get any respect
as a catastrophic man-made global-warming alarmist:

  • "Cyclist
    braves brutal cold to battle global warming"
  • "Global
    warming activist limbs go numb from cold on trek to Antarctica"
  • "Minnesota
    dog sled race cancelled because of too much snow"
  • "Eiffel
    Tower closed, flights hit by snow"
  • "Blizzards
    close down over 1,000 village roads in Turkey"
  • "The
    day the sea froze: Arctic conditions continue to grip UK"
  • "Communist-era
    power shortages hit as deadly cold, heavy snows grip Europe"
  • "Indian
    geologist declares: Global cooling will lead to our extinction"
  • "Poor
    burn books to stay warm in chilly India"
  • "Record
    levels of CO2 unable to stop record cold!"
  • "Earth's
    average temperature showed no detectable warming from December
    1978 until the 1997 El Nino"
  • "NCDC:
    the U.S. cools down by 0.49 degrees F per decade"
  • "Global
    sea ice ends year at same level as 1979"
  • "Reality
    check: Politically left scientists now rejecting climate fears"
  • "Claims
    of impending marine species extinctions due to CO2 warming refuted
    by real-world evidence"
  • "Princeton
    professor fired by Gore says warming-fear promotion has turned
    into a cult"
  • "Sunspots
    had been predicting major cooling since 2000"
  • "Extreme
    –60F Alaska cold grounds planes, disables cars"

Not only does
real weather not cooperate with warming alarmists, but a few stellar
deniers have been pulling the wraps off the Goracle's
methods. MIT Meteorology Professor Richard S. Lindzen writes a devastating
critique
exposing Gore's corrupted science. Lindzen details how climate science
in general and Al Gore in particular are not designed to answer
questions.

Many scientists
are unable to stand the hypocrisy any longer. Six hundred fifty
of them have signed a minority
report
stating their beliefs that, contrary to the UN and former
Vice President Al Gore, no consensus exists among scientists on
man-made global warming. The story
of Gore's mentor, Roger Revelle, is a telling one. Revelle, the
grandfather of global warming, backed away from the carbon dioxide
alarmism before his untimely death. Gore called Revelle senile and
blew past, but the hot air hype is cooling.

Hot air policy
has engendered as much exaggeration and as many outright falsehoods
as has thin air policy. Corruption is rampant. Doctoring data is
bad behavior, especially when the scientist playing doctor is one
of the most prominent alarmist advocates. James Hansen should know
better, but he adjusted
temperatures
upward so that cooling trends look like warming
trends. Hansen of NASA's Goddard Institute for Space Studies (GISS)
is in an untenable conflict-of-interest bind as he alters recorded
temperatures. GISS has just had to admit that their "warmest
October" claim was wrong. Hansen's former boss, Dr. John Theon,
last month publicly disagreed
with Hansen's work. Perhaps Hansen had felt empowered by watching
the whole world swallow the fabricated famous "hockey stick"
graph that was the prize prop of the alarmists for six years before
being caught out.

Beyond mere
corruption, bamboozlement's popularity is also waning. As crazy
as it is to brand any carbon — the stuff of life — a "pollutant,"
think how crazy it is to create "money" out of carbon dioxide. But
that's what the current carbon markets have tried to do. They initially
soared. Counting on monopoly position and privileged green-energy
projects, managers and investors jumped onto the gravy train of
carbon markets and cap-and-trade restrictions in a future ruled
by men who would ration energy, deciding who dies and who thrives.
But, Enron and Lehman Brothers have been casualties of this inflated
carbon market now taking its deserved deep economic hits.

On top of the
green carbon market tanking, all of those green energy projects
which boast that they do not emit carbon dioxide are behaving just
like other bubble-induced poor investments. Think housing boom.
All have gone begging.
Renewable projects expanded quickly because of subsidies and mandates,
but have shriveled just as quickly in the economic realism that
the projects were not financed by any savings, just thin air credit.

We will face
the same government-induced green unemployment problems that countries
like Spain are now facing as Obama foolishly tries to spend us out
of this depression by throwing funny fiat at problems caused by
the lack of real production and real savings. Hot air policies are
collapsing because workers today want to hear about jobs, not about
costly climate change policies that are asking them to cut their
carbon emissions by 90%. That just is not going to happen. Nor does
it need to.

Additionally,
some U.S. Democrats have become sensitive to the economic damage
climate policy will inflict, especially in the Midwest and Plains
states, while President Obama tries to move quickly on his environmental
promises. Obama's plans are being designed by those from California
and the East Coast, not by the states that still have working manufacturing.
The already crippled and hemorrhaging car industry faces increased
regulatory costs of $1,500 to $3,000 per automobile now that California
is going to set its own regulations on greenhouse gas emissions
from vehicles. This will pit
the car industry against Obama. California intended to lead the
country in green jobs. The experiment did not
go well. It leads the country in unemployment now.

Unfortunately,
Sen. John Kerry is behaving as if the United States still had money.
Kerry expects to be an influential player at climate change talks
in Copenhagen. He insists,
“People have to get beyond the Bush mentality and realize it’s a
very different ball game” under Mr. Obama. Mr. Bush resisted committing
the U.S. to economywide curbs on greenhouse-gas emissions, whereas
Mr. Obama has called for legislation to cut U.S. emissions 80% from
1990 levels by 2050." Sen. Kerry is eager to begin spending
the $825B created out of thin air in the bill just passed by the
illustrious and confused Senate.

Even though
breathing out emits carbon dioxide, don't hold your breath waiting
for Obama to spend those false fortunes combatting global warming.
No real money exists. We are broke.
The Federal Reserve is within two percent wiggle room of insolvency.

All of Obama's
and Kerry's efforts at stimulus will simply further impoverish us
all because wealth creation has ever only been about savings and
real production, not about thin air credit and debt-ridden consumption.

Depressions
and collapses do have unintended consequences of drastically lowering
carbon dioxide emissions, if you are someone who happens to think
that would be a good thing. There are few emissions from collapsed
industries. Hot air and global warming policies should waft away.
Be thankful that no more will be wasted upon such a fruitless endeavor.

Additionally,
the collapse of the house of Keynesian cards that produced money
out of thin air will permit market clearing to begin its heavy work.
A fresh monetary policy will be constructed upon competitive currencies,
sound money, no legal tender laws, an abolished Federal Reserve,
100% redemptive reserves, no sales or capital gains taxes on precious
metals, and reaffirmation of the enforceability of gold clauses
in contracts. This new monetary policy will give Americans a safety
net against total financial collapse. We do not have that now.

Now the air
is neither thin nor hot. The air is cleared. There is work calling.

February
13, 2009

Floy
Lilley [send her mail]
is an adjunct faculty member at the Mises Institute. She was formerly
with the University of Texas at Austin’s Chair of Free Enterprise,
and an attorney-at-law in Texas and Florida.

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