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

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