A Message from Your Local Danish Dumbass

"A Message from Your Local Danish Dumbass" The Sunday Blog by Joe Still LinkedIn Edition 2023.06.25 ________________________ Warning Label: You may interpret this message as political satire masquerading as a farcical editorial. But while seasoned with a touch of jocularity and a smattering of tongue and cheek, this week’s muse is backed up by a bevy of publicly available knowledge. Whatever your stripes, just use your own common sense, and salt and pepper your opinion as needed. ___________________________ During last week’s Video Seminar Zoom call, one of our people shared and unfortunate thing that had happened to her the day before. She told us that she went out to her car and smelled gas. She also noticed that her tank was almost empty. So she went to her car dealer, they checked it out and told her, “Well lady, someone drilled a hole in your gas tank and swiped your gas.” Let’s pause there…if you live in Washington, maybe you’ve noticed something: gas prices are up. Not just sort of up, not just kind of up, but noticeably up. About 45 cents or just about 10% per gallon in the last month. There’s a reason for that, and that reason is called “cap-and-trade”. This is a policy instituted on all of us Washingtonians by our legislature (our Parents) and signed into law by our Governor Jay Inslee (our Dad). Chickens and Blankets You may not remember, but in 2016, Jay Inslee (our Dad) ran for president for what seemed like about 4 minutes. His entire platform was the environment. No bashing here….we should all agree that the environment is important – very important – and that matters no matter what color your political stripes. But we must also remember that we live in an economy, and like it or not, our economy is fueled by energy. It’s energy that lets you have an iPhone and it’s energy that lets you go to the store to buy a chicken instead of having to be a chicken farmer so you can trade one for a blanket. But we’ll get back to that. Our Parents and our Dad say they want the best for we the children, so a couple of years ago they quietly set up a workgroup in the legislature to think tank on how they could make life better for all of us. They didn’t pick homelessness or the fentanyl crisis (by the way, Seattle has now had more deaths from fentanyl in the last 9 months than deaths by the pandemic in its first 9 months), instead they picked CO2 emissions and greenhouse gas. It’s one of our Dad’s biggest peeves. “Change, or Else” Those of us who have studied tax law know that taxes are really a form of “social engineering”. To get the people to change their behavior, governments impose tax liabilities or provide tax incentives. Apparently our Parents and our Dad want us to change too, but since they’re woken up and now live in a perpetual state of woke, they also want to make it sound like they’re saving us from ourselves and not screwing us over. So they came up with this brilliant scheme to force change on the evil industries who actually produce the energy we need so we can go to work, have an iPhone, and not have to trade blankets for chickens. It’s called “cap-and-trade” and it’s modeled it after the failed California policy of 2013. Cap-and-trade starts with an “allowance” which is a concept employed by parents to punish and reward children for centuries. Our Parents drew that allowance at 25,000 metric tons of carbon emission and greenhouse gas. That’s how much the energy producers and other industries are allowed to put in the air before having to pay the “tax”. This tax is paid by them in the form of purchasing carbon “credits” that are auctioned off by the state to cover the excess over the 25,000 metric ton allowance. So if you’re a business in Washington who puts out more than 25,000 metric tons of gook, you have to participate in this auction to purchase credits to offset the amount you send over your allowance. And if you don’t buy these credits, you get fined $50,000 a day. Our Parents and our Dad did all of this for us, and we didn’t even have to ask. Isn’t that awesome? Actually, most of us didn’t even know. Maybe you didn’t either. But we’re just getting started. This gets better my brothers and sisters…much better. I’m a Danish Dumbass I’m a dumbass, but I’m also Danish (really), so I guess I’m a Danish dumbass. And being a Danish dumbass, I had no idea how much 25,000 metric tons of gook is, so I did a little digging around about the other things that put gook into the air besides our need to go to work, charge the iPhone, maybe hit Disneyland with the kiddos, and of course, not have to be a chicken farmer to get the blanket. Suddenly a voice came to me: “Remember, only you can prevent forest fires”. I couldn’t find an article comparing forest fire emissions to human created emissions on a scientific basis in the US., but I did find one for Canada. Apparently in BC, the gook put into the air by forest fires is 2 – 3X more than the amount from humans burning fossil fuels for energy. But it is Canada, and they’re sort of the chilly apartment above the garage, so you have to keep that in mind. Meanwhile, back here in the lower 48, apparently our forests are shooting about 290 million metric tons of gook into the skies each year as they burn. Is that good? Of course not. But here’s the point: it’s 11,600X more than the 25,000 metric ton allowance imposed by our Parents and signed into law by our Dad. Somehow that just doesn’t pencil. A Couple of Billion When our Parents were ready to auction these credits, our Dad went on the tv and told us this: “This is pennies people…maybe 1 – 2 cents per gallon, you won’t even notice it. And we’ll create a ton of new green jobs. It’ll be awesome.” It sounded pretty good at the time, and he is our Dad, so most of us just want back to our happy lives of being our Parent’s adopted children. Remember: our Parents and they want what’s best for us just as all parents do. In the first auction, they (the state) raked in about $300 million. In the second one they made about $480 million. And to keep the hurt on those who dare exceed the allowance (remember – those are the villains who make the energy so we can charge the iPhone and buy the chicken instead of trading it for the blanket), there will be fewer and fewer credits available in the future. This will make each credit required more and more expensive. It’s really the perfect storm of tax policy, social engineering, and supply and demand. And here’s a double word score of it all: apparently they set aside first $150 million to fund a bureaucracy to support enforcement of the new law, hire people, pay salaries, benefits, time off, you know how it goes. And now this 1 – 2 penny thing that our Dad promised us was just a lot of nothing has silently become a new $2.1 billion income line item in the next biennium budget. It’s pretty brilliant really. The Danish Truth In Danish lore, there is a fable about the Emperor’s clothes. If you don’t know it, it’s a little story about a king being duped by his advisors and ending up buck ass naked in front of his minions. Everyone knew he was buck ass naked, but no one was brave enough to call him out except an innocent child. Maybe this is a good time to set aside all of our politics and just be real. Do you honestly think these companies are going to take the knee with some kind of apology? Do you really believe they’re just going to eat the cost of buying these credits and carry on as if nothing ever happened? And do we really believe that fining and taxing polluters actually stop the pollution that this is supposed to be all about anyway? Apparently our Parents and our Dad thought that was exactly was what was going to happen, but it didn’t. What happened was all of these energy creators and polluters said, “You tax us, we’ll just tax your children. Where else are they going to go to get the energy and other things we make, and they need? Are they all going to become chicken farmers?” You must admit, they do have a point. Again, the air is important. Super important. But so is your everyday life and the public problems in it…schools, roads, cops, homelessness, drugs, dot, dot, dot. That $2.1 billion doesn’t address any of those things. That’s our money brothers and sisters, and this is how it’s being slowly extracted from you. If you’re ok with it, then be ok with it, but let’s call it what it is. Yes, I’m a dumbass, it’s true. But I’m a Danish dumbass, and the Emperor is buck ass naked. Welcome to Washington There’s a simple phrase that anyone and everyone in business should write in red lipstick on the bathroom mirror: “If you have no other way to differentiate, then the only way you can differentiate is on price.” (shoo – go write it in the mirror, I’ll still be here). As I sit here writing this to you, I’m in a border town in the Columbia River Gorge in Washington. I’m two miles and one dollar away from Oregon. Gas in Oregon today is $.85 a gallon cheaper today than in our Evergreen state. It’s the same gas, probably from the same refinery. And it’s a similar story today with many border towns that Washington shares with Oregon and Idaho. Why would you spend another $25 to fill your tank when you can drive 10 minutes and save that? You wouldn’t, that’s just the nature of a market, and that’s why those are dollars leaving Washington small business for other states. This isn’t a story of market forces or the Covid, this is a story about how the government has interfered with the market. The government just increased its take-home pay by a billion dollars a year, while screwing the good folks who are trying to make a decent buck and getting all of us to pay for it by fiat. And here’s the other thing…the cost of moving your food around just got higher too, so did a lot of other things in our already inflationary world. Energy drives the economy, and state government has now interfered with the energy market. Social engineering through taxation, that’s all this is. I know, I know…I’m just a dumbass (but a Danish one). The Two Ironies If you’re still with me, there are two things about this story that are actually kind of ironic: 1) When I get to Oregon I don’t say, “Wow, this Oregon air tastes gross, it hurts my eyes, and it makes me wheeze and sneeze. You guys have the worst Parents and the worst Mom ever.” I don’t say that at all because that’s ridiculous. The air in Oregon isn’t any different than Washington or Idaho. The only difference is this this cap-and-trade policy is making the people of Washington poorer every day. 2) Next time you’re at the pump, look at the sticker. It will tell you how much tax on each gallon goes to the state. That’s supposed to be earmarked for fixing our roads. If you’re going to tax us to get us to drive less, we’ll buy less gas, and you’ll get less to fix our roads. And if you want us to all go electric, it’s the same conundrum. But they are our Parents and they want what’s best for us. At least that’s what they told us. Balance Two years ago, a woman who I love very much gave me a gift. “It’s a balance bracelet”, she said. Ever since she gave it to me, I’ve never taken it off. It reminds me every day of the greatest struggle we all face in this human life: finding balance. I told this woman I love that she would be an excellent First Lady of our state for a lot of reasons, but one of the biggest is that she is an advocate of balance, just as we all should be. Balance is the key to sustainability, both personally and publicly. You can’t just turn off the switch at one end of the system without expecting a consequence from the other. The environment matters, but so does the economy that we have to live in, and while our blue Parents often remind us that they care most about the poorest among us, the simple truth is this cap-and-trade policy is screwing the poorest among us the most. This did not need to happen. It’s too bad when ideology is masked as public policy because ideology never solves problems; it can’t, and anyone who is intellectually honest knows this. Artificially creating the highest cost gasoline in the entire country by punishing all of us to change isn’t going to resolve air pollution either and everyone knows that too. So I suppose at the end of all of this you will draw the conclusion that works for you about cap-and-trade. I just do what I can being the self-confessed Danish dumbass that I am. To me this whole thing is just buck ass naked. Good luck and have a good week. ________________________ Cite “I say exactly what I think, and very often it’s totally politically incorrect. I always get chastised for it, but I think I’m the one who says, ‘The emperor has no clothes.’” – Joan Rivers You can read past issues and subscribe to The Sunday Blog @ www.joestill.net. #CapAndTradeConsequences #ConsequencesOfCapAndTrade #SustainabilityMatters #IdeologyVsProblemSolving #CapAndTradeIrony