Frank Bernheisel: The View From Here
Frank Bernheisel
Frank Bernheisel
Posted 3.19.20
Just Outside Washington


Lock Down Message

We are in lock-down. Here in Fairfax County, Virginia, the schools, libraries, day care centers, and parks are closed; and Virginia banned all gatherings of 100 people or more. In some cities and states, lock-down is more severe than here. New York City ordered bars and restaurants closed to on-site patrons and theaters, nightclubs and concert venues be closed.

The Trump administration fiddled around for several weeks and downplayed the COVID-19 problem: it will all go away. After the past weeks decline in the stock market, the largest since 1987, President Trump said: We have an invisible enemy and recommended closing schools, restaurants, bars, gyms and other such venues, and limiting gatherings to no more than 10 people.

Meanwhile, "Nervous Nancy" put together a bill to help people and businesses weather the lock-down and the resulting economic slowdown. The House bill, now sent to the Senate, provides $8.3 billion for free testing for the coronavirus, paid sick leave and strengthens unemployment insurance. There is discussion about whether the House bill provides enough money and covers all those that need help.

Meanwhile, the Trump Administration is talking: we "back the airlines 100 percent", "We'll be looking for support for small- and medium-sized businesses", "we will be looking at a general stimulus", and "we're looking at sending checks to Americans immediately".

Wow! All this could have been avoided. As far back as 2008, Republican Congressman Bob Inglis introduced H.R. 2380 (the "Raise Wages, Cut Carbon Act of 2009"); and in 2007, a group led by former Secretary of State James A. Baker III, former Secretary of State George P. Shultz, and former secretary of the Treasury Henry M. Paulson Jr. said taxing carbon pollution produced by burning fossil fuels is "a conservative climate solution" based on free-market principles.

The group issued a report that a proposed tax of $40 per ton of carbon dioxide produced would raise an estimated $200 billion to $300 billion a year, with the rate scheduled to rise over time. They also proposed a "carbon dividend", amounting to an estimated $2,000 a year, for the average family of four. Baker and the group presented the concept to the Trump Administration to no avail.

Fast forward to today and the lock-down. If the Trump Administration had picked up the ball on the Baker Group's proposal, there would be much less need for emergency legislation to assist those without paid sick leave and much less need for increased unemployment insurance. All people would have an income cushion to help them weather the COVID-19 storm.

It has been argued that a guaranteed income such as the proposed "carbon dividend" would destroy individual initiative and incentive. However, the Alaska Permanent Fund, which is funded by revenue from the oil pipeline and pays all Alaskan residents an annual dividend, does not seem to have dampened the frontier spirit. Further, several studies including those of the Intergovernmental Panel on Climate Change of countries such as Sweden that have implemented carbon taxes, showed the carbon taxes have not harmed or limited economic growth.