Cap and Trade
Cap and trade is the exciting new carbon-emissions legislation nearing ratification in the American Congress.
The premise is simple: carbon emissions harm the environment by contributing to global warming, and must be stopped. They will be stopped this way: companies that use energy, i.e. companies that actually make things, will receive tokens to account for their carbon use in the USA. The tokens initially will be free; eventually they will cost money, i.e., the companies will be taxed in order to obtain them.
The tokens, however, will be tradable. Goldman Sachs will be tasked with making a market in them. Goldman will get a commission on every transaction. Other companies will have to be retained as middlemen to analyze the technical details of the market and recommend to producing companies the most efficient ways to hedge the possibilities of their future energy needs, or lack of needs.
An energy derivatives market is not a new thing. Enron was a corporation that made billions of dollars in profit by trading energy derivatives. And if a derivative market generates billions of dollars in profit for someone, how can it be a bad thing?
1) A new direct tax on production, imposed during the worst recession in history, on an economy whose production sector has shrunk to 25% and continues to shrink despite policymakers' call that the current service-oriented economy is not viable long term.
2) A new derivatives market that promises to allow financial companies to skim billions off the top for doing - nothing? Not much, anyway.
3) The opportunity to build a whole new generation of profit-making energy derivative trading firms, using the shining historical example of Enron as a model.
What could possibly go wrong here? How could any patriotic American oppose this BRILLIANT plan? Write your Congressman and urge him or her to push this through immediately!