Why the carbon tax?

Julia Gillard has been having an awful time in politics because of the carbon tax. She's been roundly criticised for stating during the election that it was not on the table, then backflipping the moment she became PM (this is not an isolated case, of course). The opposition really lay into her for that. Then there's the fact that it is mathematically certain that a) the carbon tax will have no direct measurable effect on global temperatures even if in theory it did reduce overall carbon dioxide emissions and carbon dioxide is a major problem and global temperature rises are a major issue, and b) it will further hollow out the already nearly dead industrial base in Australia. Point a means that it will never be possible to tell from the global temperature measurement whether the carbon tax has had the desired effect. Point b means that production currently happening in Australia will almost certainly move to other countries where the power is cheaper and dirtier, so the nett effect will be to increase over all carbon dioxide emissions in accordance with the well-known Law of Unintended Consequences.

Given the furore and the heavy hits she's taken in the polls, and the fact that she's still the Labor leader, I have speculated in the past that it may be due to pressure from the UN that this is happening at all. It is well known that Labor and the Greens are in cahoots, especially given the fact that the Labor government is a minority government, but to me that did not seem like enough reason to waste all the Labor party's political capital in this way. UN countries really hate it when some people become too wealthy, and a carbon tax is an ideal way to really scupper a country's productive capacity and make its people poorer. Thus it's possible the UN wanted to cut us down to size. If Gillard gets a job at the UN, World Bank, IMF or ITO in the near future we'll know beyond a reasonable doubt, but in the mean time there is another issue that has come up.

Recently ol' Julia has been criticising the states for the extreme rise in electricity prices, and threatening that if prices don't come down the Federal Government will act to force them down. For anyone familiar with economics this should be ringing alarm bells the size of planets. A few of the questions that might be raised are:
If prices genuinely are too high, why isn't the "market competition" that's been introduced in recent years driving down the prices?
If prices are simply the response to carbon taxes, won't a plan to force them down cause shortages?
Why didn't the energy futures market provide a better buffer to the power prices?

This threat from the Federal Government got me thinking about who is benefiting from this whole thing. In politics one should always look for where the money is. The people who asked for a given piece of legislation are usually the ones who benefit from it, this is merely common sense.

One group that might benefit from this bill is producers of "green" power and the manufacturers of the technology used in its production (mostly windmills). Of course, it's mostly the foreign manufacturers of the technology are helped because CO2 inducing electricity must be used in the types of heavy manufacture that producers of green power technology employ.

Another group that could conceivably benefit is the Federal Government itself. This could well be some type of power grab to seize control of all of Australia's power infrastructure from the states. Another obvious benefit is the potential for greater tax takes and indirect control of the energy producers themselves who will be only too happy to beg and roll over if the Federal Government threatens to raise taxes.

The third group I can think of that might benefit is unionised and or skilled labour. Expensive energy makes capital intensive processes more expensive and will increase the over-all demand for labour. This, in turn, will drive up the price of labour, especially of skilled labour of the type that can stand in for capital goods. Along with the controls over entry into the skilled labour market due to barriers to entry, licensing, compulsory unionisation and a number of other regulations this could well have a significant effect on the price of skilled labour, which will of course have a negative impact on the general welfare and particularly on the poor.

Now, I know that any minute now you expect me to reach for my tinfoil hat. Why so conspiratorial? you might well ask. We have learned the hard way that in a democracy politicians are still only doing what will get them more votes, money and power. I think I've outlined a credible case of how those three objectives might be served by this bill. The policy is merely a continuation of the fundamentally fascist way public affairs and "public good" businesses have been conducted in Australia for some time, and most especially since the acceleration of privatisation during the Howard government.

I believe this attack by Gillard on the states is an extremely worrying sign, another expression of the economic fallacy that if a small group of monopolists are doing a bad job the solution is to create a single monopoly. Time will tell if it will materialise into a fully-fledged takeover of the power grid by the Federal Government but I wouldn't be the slightest bit surprised if that were the endgame.

They are there to see that Justice is Done.

The following comes from an episode of The Games:

John: "Who are the other side?"
Dennis: "When I say 'the other side' I mean the people running the inquiry."
"Who are they?"
"There's a chairman and a barrister who's called Counsel Assisting."
"And who employs these people?"
"Well, they're employed by the legal process. They're there to see that justice is done. That is their duty, that is their sacred trust, and that supervenes any and all other responsibilities in their mind."
"Yeah. They're employed by the government, aren't they?"
"They're indipendent people, chosen for their jurisprudential and evidential skills in areas deemed most useful for determinations of this kind."
"Are they paid for their services, these people?"
"Oh, some moiety may inhere in work of this type, of some kind, yes."
"And who pays them?"
"The question of emoluments would rest with the state in this instance."
"Yeah, they're paid for by the government."
"Yes."
"The government the Mininster's a minister in."
"Well, the enquiry will have quite clear guidelines."
"And who writes the guidelines?"
"They'll be prepared by the Attorney General."
"Yeah, another minister. So the government's going to hold an inquiry into its own activities, supervised by itself and run under conditions jacked up by the Attorney General. It's no wonder they want a bit of fresh blood in there, is it?"

Sound familiar?