Carbon Credits–The next liberal lie

One person I have had the pleasure to get to know over the last couple years is Jonathan Hoenig. He runs a hedge fund known as Capitalist Pig Asset Management. As his name suggests, he is an unabashed unashamed capitalist who worships at the altar of Ayn Rand and free markets everywhere.

I have had several conversations with him over drinks and over the telephone. Those conversations are off the record. I consider him a friend, and look forward to sharing drinks with him again the next time I am in his neck of the woods. I will be doing an interview with him shortly, with a heavy part of the interview focusing on oil.

Yet today the focus is on the latest attempt by elitist liberals to convince other Americans that the left are not a bunch of liars, hypocrites and screwups. The most recent liberal lie comes in the form of carbon credits.

Before getting to a brilliant article by Mr. Hoenig, a little background is necessary.

Carbon credits, also known as carbon offsets, are basically screwup credits. It is equivalent to buying indulgences to get into Heaven, rather than actually doing good deeds.

The way a carbon credit works is as follows. Many limousine liberals, or in this century, lear jet liberals, use a ton of excess energy that supposedly hurts the planet. Rather than cut back on this energy usage, these gasbags purchase carbon credits, which are promises for other people to use less energy.

Why not have Hollywood celebrities throw lavish banquets with fancy food that goes uneaten and gets thrown away while people in third world countries eat less and starve to death? Actually that already happens, but if these celebrities gave food credits, the poor nations and their people would be paid to not eat.

An even better example would be a murderer sitting in prison for the rest of his life. The prisoner then finds out somehow that some innocent human being needs a kidney transplant. The murderer donates a kidney, saving the innocent person. Newspapers love these feel good stories. Liberals hail the story of how a man could take a life, and then give one. He is now neutral.

How about being life positive? How about not being a murderer to begin with?

Why can’t these leftist greeniacs just use less energy and convince others to use less energy, and be carbon positive?

The reason is because then these people would not be liberals.

I am not against energy usage. I am against others telling me how to live, when they live in the very same way, with greater excess.

It’s the hypocrisy stupid.

Now comes the investment world getting into the act. We are living in exciting times, and virtually anything can be wrapped into a financial product of some sort.

The other day, people had a chance to purchase shares in a carbon offset financial product with the simplicity of purchasing a stock.

So how many million shares traded on the first day of trading?


100 million is pretty impressive. However, I did not say 100 million. I said exactly 100 shares.

With all the money in this world, 100 shares traded.

Here are some observations by Mr. Hoenig.

WITH A WHOPPING 100 shares traded its first day, the iPath Global Carbon ETN (GRN: 50.20, +0.58, +1.16%) got off to a quiet but historic start on Wednesday. The exchange-traded note tracks the Barclays Capital Global Carbon Index, one benchmark of the quickly growing carbon credit market. With exchange-traded notes and funds on everything from platinum to pork bellies launched in recent months, this unequivocally takes the prize as the most obscure.

What’s worrisome about the notes, and “carbon finance” in general, is that the cap on carbon emissions is totally manmade and, unlike an investment in a bond or stock, serves no economic purpose whatsoever. The value of these worthless slips of paper is only what governments, spurred on by what I consider environmental heretics, dictate they are.

Even iPath’s promotional material admits it, stating clearly on page 7 that “the regulatory environment is the main driver of both supply and demand. If regulations change, increasing (or decreasing) supply, it will subsequently affect the market price of carbon credits.”

If you think the market for crude oil is manipulated by powerful interests, then consider carbon finance to be the ultimate rigged game. Carbon credits trade, by definition, on the whim of a regulator. In reality, there is no limit to carbon-based economic activity and no economic purposes served by passing out worthless credits. “Cap-and-trade” is simply a tax dressed up to appear like a free-market solution. But with the government behind the scenes pulling the strings for both supply and demand, there’s nothing free market about it. Tree-hugging politicians, egged on by the environmental lobby, will make up the rules as they go along.”

The bottom line is that the left knows that they are wrong. They just don’t care. Government regulation is not the means to a policy. Government regulation is the end result itself. Regulation equals power. It is control.

The left simply does not believe in the concepts of supply and demand. Liberals truly believe that governments function better at setting prices than free markets.

This is why liberals try to shut down conservative talk radio with the Fairness Doctrine. They tried competing with entities such as Air America. They failed in the marketplace.

Liberals try to get the government to regulate the game because they have colossally failed at it themselves. Lose an election? So what. It only takes one left wing activist judge to overturn most elections.

I am a conservative. I support big tobacco, big oil, big guns, big alcohol, and big red meat. I do not drink alcohol or smoke, but I support the right of the companies to engage in commerce in legal products.

The problem is not with liberals that want to ban everything (Ironically they do not want to ban abortion. After all, why bring a child into the world if it will be strangled by the government anyway.). Those people are bad enough. The problem is with the liberals that want to ban everything for everybody else while partaking in those supposed sins themselves.

When a right wing politician spends his life proposing anti-gay legislation, and then is discovered to be gay, the wolves and jackals in the media exact their pound of hypocritical flesh.

Yet crickets chirp when a left wing columnist is found possessing a handgun to defend himself while writing columns about why citizens should not own handguns.

The crickets chirp even louder when environmentalists gather on college campuses to bash President Bush, Dick Cheney, and big oil, right before leaving their signs on the lawn to ruin the grass as they head to their next rally.

Crickets chirp at the sound of a sonic boom when leftists at peace rallies shout antisemitic epithets and other obscenities linking President Bush to Hitler, all in the name of peace.

Carbon Credits is not the biggest liberal lie. After all, the Clintons did not come up with the idea.

Yet it is the most current liberal lie. Luckily, once this investment idea fails, liberals will get bored, and start wearing a new color ribbon to support the newest social cause that they know nothing about, and will soon not care about.

The idea will fail because liberals don’t actually care about these things when the cameras are off. The idea will also fail because people do not want to invest in a market unless it is a truly free market.


14 Responses to “Carbon Credits–The next liberal lie”

  1. Micky 2 says:

    I’m sorry, I might be missing something here.
    It certainly wont be the first or last time.
    I feel stupid after reading this, but I’ll ask anyway.

    Wasnt the intended purpose of these credits supposed to be that the funds be used to clean the environment ?
    And if we start trading them at competitive prices would that not hurt businesses that cant afford them if needed ?

  2. Well, I read the post and still have no clue what the “lie” here is, let alone the inanity of “elitist.” Kinda loony if you ask me. Carbon Credits, Offsets, and Cap and Trade are all interesting ideas and should be debated. Personally, I think they’re a little pointless. What we need is massive infrstructure development akin to to the WPA or the IHS – a national power grid, much more mass transit, massive solar and wind arrays. All that would really help, though it would take time and patience, a virtue not exactly ubiquitous in today’s America. The Free Market will adapt to whatever the state develops. There’s an old rule of Capitalism: if there’s a buck to made someone will make it, if it’s only 50 cents, someone will still make it. This is why Voo Doo Economics are known as “Voo Doo.” You do not need to inspire people to make money. It’s in all our self-interests. On the other hand, the prime prerogative of our government is to preserve our national security, and energy is a huge part of that. Just as we do not leave all our international diplomacy to the private sector, we can not leave all our energy infrstructure purely up to the Free Market. There are constructive and tangible approaches our government can employ to ensure the security and stability of our energy state. Tinkering around with credits, offsets, and cap and trade will barely address the very serious problem we’re facing today.

    I’ll say this though – ending our imperial ambitions in the Middle East would go a long, long, long way toward ending the current energy crisis.


  3. Micky 2 says:

    Imperial ?
    Are we conducting an ” imperialistic attitude of superiority, subordination and dominion over foreign people— a chauvinism and comportment relegating foreign people to a lesser social and or political status. ”

    If we took our influences, miltary or finacial out of the middle east we would be lucky to see one drop of middle eastern oil ever get to America.

  4. Micky, we don’t get all that much oil from the Middle East anyway. It’s a myth – a simplistic synopsis of the world oil trade for the consumption of people who don’t have a clue in the universe.

    And yes, we are “conducting an ”imperialistic attitude of superiority, subordination and dominion over foreign people — a chauvinism and comportment relegating foreign people to a lesser social and or political status.”” We’ve been doing it around the world for over a century. Welcome to reality.


  5. Micky 2 says:

    “Micky, we don’t get all that much oil from the Middle East anyway. It’s a myth ”

    The clue you dont have is that the reserves in the middle east are projected to last longer than any we know of right now.
    And since others who are our allies have their economies at stake we serve the purpose of securing those reserves for them as well in a global economy.
    The world gets a very nice chunk of oil from the middle east.
    “The top sources of US crude oil imports for April were Canada (1.952 million barrels per day), Saudi Arabia (1.453 million barrels per day), Mexico (1.259 million barrels per day), Nigeria (1.115 million barrels per day), and Venezuela (1.019 million barrels per day). ”

    ” Welcome to reality. ”

    Your perceptions and hateful spins do not dictate reality.
    And you can not show anything that we are doing in the middle east represents imperialism.
    Al Countries in the middle east remain sovereign.
    That is a fact.
    And fact dictates reality.

  6. Deja vu. Wasn’t I who reminded you that oil is a globally traded commodity and so therefore it really doesn’t matter where it comes from? Of course, it would be easy to change that: close the trading floors in America and Britain and end the futures contract speculation. These speculators are purely superfluous, unnecessary middlemen practicing essentially insider point-setting, illegal in most of life’s transactions. They are unregulated, and exist soley because of legal loopholes, ostensibly to stabilize oil prices – now, obviously a failure.

    Saudi Arabia has been a stable supplier for years. That’s why we did the Kuwait war, to keep them safe. They’ve been safe ever since. Back then, invading Iraq seemed like an obviously stupid option. Apparently, we’d gotten a lot stupider since then, though now we seem to better understand our mistake. We never needed Iraq, or Iran, or Cuba, or any of those sorts of states – all we needed was to shut down the traders, ban the cartels, and reduce our demand. That would have been in the best national interest. But there are people out there who really don’t care at all about the national interest. They only care about their own immediate personal interest, and that’s making money at the expense of our posterity. I find that disgusting and I wish they’d knock it off.


  7. […] Carbon Credits: The Next Liberal Lie […]

  8. Micky 2 says:

    Sorry to kill your ego but I’ve been well aware of globaly traded commodities for decades. I’m 51 years old.
    Whatever it is you say it doesnt change the fact that an interuption in the flow from any supplier would effect the market.
    Today, it could be disasterous.
    This is the market, thats the way it works.
    I have contempt for the rise of grain commodities because of corn based ethanol.
    I doubt the rise will be permanent once we discover that there is a greater market for food than crappy bio fuels.

    “Of course, it would be easy to change that: close the trading floors in America and Britain and end the futures contract speculation.”

    You’re high.

    ” all we needed was to shut down the traders, ban the cartels, and reduce our demand.”

    All I need is about 1.86 million to break clear and make it through retirement.

  9. I’m high??? I’ll tell you what’s “high” – oil. Too high. It’s ridiculous. I hate to say it, but I’m now officially convinced that unregulated American profiteers are wrecking, absolutely WRECKING this country.


  10. Micky 2 says:

    Hah, thats funny.
    I always thought that when the regulations were dropped our first settlers stopped starving.
    And you wanna bring them back ?

    ” close the trading floors in America and Britain and end the futures contract speculation.”

    ” all we needed was to shut down the traders, ban the cartels, and reduce our demand.”

    Yea , lets have the government run it, and our health care and our…

    If you guys had it your way by the time you got done there would be no one left to tax.
    Then what would you do ?

  11. You conservatives hate the American government more than anyone on the Earth.


  12. […] Tags: America, carbon, carbon credit, carbon credits, Carbon Tax, environmentalists, tax Related Posts […]

  13. carynswark says:

    Hey Eric! Sorry it took so long to get back to you — I have sick bunnies :( That’s not a euphemism, my bunnies really are sick.

    This post made me laugh, btw, as did some of the responses. It’s a typical rich response: let the poor do my good works and I’ll live in luxury with a clear conscience.

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