Cap and trade not good for Kentucky

With the Obama administration intent on pushing climate change legislation, we must keep in mind that effective climate change legislation must work on both economic as well as environmental levels. Cap and trade, the administration’s method of choice for reducing greenhouse gas emissions, would establish a previously nonexistent financial market that could turn out to be not only unpredictable and unmanageable, but also expensive for states like Kentucky.

Cap and trade would limit the amount of carbon industries could put into the atmosphere, then grant permits that allocate portions of that total amount to private sector companies. The permits could then be traded between companies.

The trading of these permits alone would be a very big business. This new permit market would create billions of dollars in hard-to-define, difficult-to-track paper that would undoubtedly make a few people very wealthy. And that wealth would come courtesy of consumers.

The Congressional Budget Office has estimated that the Waxman/Markey cap and trade bill currently under consideration in the House would impose significant cost increases on companies, particularly those in the power generation business. Obviously, these increased costs would be passed on to consumers in the form of higher prices.

The CBO predicts that cap and trade would boost the retail price of electricity anywhere from 44 percent to 129 percent. The biggest losers would be people living in states that use and produce fossil fuels, as power plants are forced to permit their emissions or switch to higher-cost alternative fuels and natural gas. Kentucky ranks high in that category.

In addition to costing consumers, it might not even help the environment.

Cap and trade would impose a dubiously effective, politically risky climate change system on U.S. businesses that would directly impact the pocketbooks of Kentuckians.

Lois Ann Disponett, Lawrenceburg



Decision to close dealerships tough

Chrysler’s decision to close 789 dealerships was not an easy one to make. The closings will have a negative impact on their community — the dealerships spend thousands of dollars supporting community charities, sporting teams and other worthy activities and even more could be lost from the impact of lost sales to the community.

While it is traditionally very difficult to close dealerships because of the tough state laws protecting dealership rights, this unique “opportunity” to reduce dealerships is possible because of bankruptcy.

And the reality is that currently Chrysler has way too many dealers to support its total sales. This causes Chrysler, Dodge and Jeep dealerships to end up competing against each other instead of other companies. In other words, customers shop at five different Chrysler, Dodge or Jeep dealers to get the best price instead of shopping at Chrysler, Ford and GM to get the best car. All of the time, energy and expertise of an individual dealership is spent wooing the same group of customers as competing dealerships, and they reap no benefit if another dealer gets the sale.

So it’s a tough and emotional decision, and one that will cause Chrysler to lose sales in the short-term but that will enable a stronger dealer network and resale values in the long-term as fewer cars will be sitting on too many dealers’ lots.

Art Wheaton, School of Industrial and Labor Relations, Cornell University, Ithaca, N.Y.



Meeting called to defend Constitution

On May 21, many leaders of the national organizations dedicated to the defense of the Constitution are retracing the 1910 travels of the global financiers who covertly gathered at a Jekyll Island, Georgia, resort to plot the creation of what we know today as the privately-owned — and, in our opinion, unconstitutional — Federal Reserve.

This meeting will support the upcoming historic Continental Congress 2009 project where delegates from the 50 states will convene to recommend specific actions people can take to peacefully restore Constitutional order and end abuses such as the ongoing Fed and Treasury bailouts.

To learn more, visit www.WeThePeopleFoundation.org.

Lynda Farley, Edmonton, Ky.