Politicians, being what they are, tend to have an inflated view of what they can do. Some claim to create jobs while others claim to raise taxes. In truth, they are limited to passing political laws. Once enacted, those laws run into the laws of economics – which have never been repealed and have been largely the same since the beginning of time. The results are often different than those intended – and so it is for Jerry Brown, whose policies fly in the face of economics and Californians are paying the price.

Few can doubt the magnitude of the economic problems facing our once Golden State. Unemployment is above 12% and underemployment is above 20%. Over 1.3 million less people are employed today than a decade ago. California homeowners have lost over $1.7 trillion in equity in the last 4 years – an amount nearly equal to the entire state economy. That combination has resulted in California suffering the worst of the nation’s foreclosure crisis including startling figures such as in Fresno, where 46.7% of the mortgages are under water, i.e. the mortgage is larger than the home value.

California businesses face taxes among the highest in the nation, even higher regulatory burdens and, just around the corner, potentially large workers’ compensation rate increases. It’s no wonder CEO Magazine ranks California 51st in the nation (behind Puerto Rico) as a place to do business.

All combined, these economic problems have resulted in revenue problems for California governments because people without jobs don’t pay taxes; homeowners without equity spend and borrow less; and businesses with mounting costs have lower profits. That’s economics – not politics.

For Jerry Brown, however, economics remains a mystery to say the least.

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It may just be wishful thinking but Politico’s ‘Morning Energy’ today was dropping heavy hints they expected President Obama to use this morning’s presser to defend against any culpability of his policies in ’skyrocketing’ gas prices.

Yeah, any such connection between Obama policies and energy prices is a pretty hard case to make, what with the Obama administration having immediately upon taking office canceled oil and gas leases, placed more areas off limits for domestic exploration and production, changing the Minerals Management Service to an offshore windmill permitting agency since all we need is some offshore windmills (not one but two senior administration officials have said this, including a cabinet secretary), then not letting the Gulf spill ‘go to waste’ by seizing it to strangle our biggest domestic source of oil.

Of course, there is also that long trail of aspirational comments, well beyond vowing to cause electricity prices to ’skyrocket’, indicating this steady gas price hike is their objective, even if overseas developments are causing problems for them [helping the rise advance too quickly such that people pay attention, with these developments adding to the price hikes the admin have built in, with much more obviously undone but hopefully on the way]. As I detailed with many more admissions ten months ago in Power Grab.

Obviously, this is one of the items worrying Team Obama, along with their foreign policy fecklessness. And — in lieu of gimmickry to redirect voters’ gazes from policies that contribute to this, such as by releasing Strategic [NB: not 'Political'] Petroleum Reserve crude — Obama cheerleaders (like Politico) note he could take the opportunity to push his “Clean Energy Standard”.

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This week the EPA celebrates its 40th birthday. In honor of the occasion, they’ve launched a dedicated website called EPA@40, and it’s head, Lisa Jackson, will take off on a week-long party circuit designed to “highlight the impact of [the EPA's] efforts to clean up the air Americans breathe and the water they drink and the communities they live in” as well as her agency’s crusade to attend to “the unfinished business of the environmental movement.”

What started as a way to help the government respond to environmental disasters and spread conservation awareness, however, has metastasized into a bloated, over-reaching disaster of it’s own, championing extensive governmental intervention, curbing freedoms and, most recently, costing hard-working Americans their jobs, all in the name of preserving the environment.

In the midst of an economic downturn, the EPA will once again retool it’s famous, founding Clean Air Act, rewriting the historical legislation to suit Obama’s own bureaucratic needs to reduce greenhouse gas emissions by 20% by 2020. Sounds fantastic, right? Well, it’ll have a devastating effect on the private sector:

Achieving that level of reduction in greenhouse gases won’t be easy or cheap. This immense new burden on the private sector comes at precisely the wrong time for an economy still struggling to create new jobs and reduce near double-digit unemployment…The cost estimates are indeed staggering, according to an econometric study by the Manufacturers Alliance that projects more than 7.3 million lost jobs by 2020. The hardest-hit states include Texas, which would lose 1.7 million jobs, and Louisiana, with 938,000 positions lost. Others include California (846,000), Illinois (396,000) and Pennsylvania (351,000). Total losses would reduce the nation’s gross domestic product by $1.7 trillion, according to the Manufacturers Alliance.”

Of course, these new standards wouldn’t just affect isolated industries or particular states.

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What is Cap-and-Trade? Cap-and-Trade is a political scheme ostensibly aimed at reducing greenhouse gas emissions with the goal of reducing the global temperatures.

With a Cap-and-Trade law in place, the government would set a yearly greenhouse gas emission target (carbon dioxide is the most common man-made greenhouse gas, you are exhaling right it now) and would reduce that yearly ceiling over time.  This is the “Cap” of Cap-and-Trade.

The “Trade” part of this scheme comes in when the government (read: politicians) gives out greenhouse gas emission credits, valued at billions of dollars, to favored industries.  So, industries with greater credits than emissions would be able to sell their valuable credits (basically, a right to emit greenhouse gases) to those industries (such as the coal industry or the oil and gas industries) which would need the credits to stay in business.

Over time, the government makes money, commodities traders make money, such as those on the Chicago Climate Exchange (yes, it exists, they make money trading carbon dioxide credits), politically favored industries make money (such as those former Vice President Al Gore has invested over $100 million in), and the rest of us get hit with the bill – up to $2,000 per family per year of higher energy costs. Thus, Cap-and-Trade is actually a huge energy tax on working Americans.

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