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Higher Cost Energy Worsens The Shameful Rise In American Poverty

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"Everywhere you turn, there are proposals and regulations to make prices go higher. The trend line is up, up, up. We are going into uncharted territory,"  Daniel Kish, Senior Vice President, Institute for Energy Research

Policies that admittedly increase the cost of energy in the name of "improving health" must always be challenged. That's because wealth is the root of our health, and higher cost energy takes money away from us, disproportionately hurting those that can least afford it. Simply put, there's nothing better that we can do to allow Americans to live healthier, better, and longer lives than increase their earning potential and disposable income. Because energy is a necessity, affordable energy is fundamental to our progress and frees up money to be spent to grow our consumer-based economy.

Unfortunately, Americans today face a growing anti-fossil fuel agenda designed to: 1) increase the cost of energy to reduce usage and greenhouse gas emissions and 2) prop up the more costly and less reliable competing sources.

Ultimately, however, this movement is based on reducing disposable income of families and increasing the cost of doing business in America. Thus, the Clean Power Plan and the New Methane Rule (which will be the most expensive regulation in history) cannot be as beneficial as proponents claim because such overregulation increases the cost of indispensable items like electricity, oil, and natural gas.

This attack on fossil fuels is the real "wealth and health problem" because they constitute 85% of our energy, having nowhere near large-scale replacements, particularly not the higher cost, naturally intermittent sources of energy that the anti-fossil fuel movement promotes. And we already know what these policies bring: drastically higher energy costs. See EuropeCalifornia, Ontario, and Australia.

We need "facts, not fear on U.S. air pollution," as our pollutant emissions continue to plummet, and Americans have never been healthier.  The "Law of Diminishing Returns" indicates that incremental gains in air quality are becoming much smaller and costlier, and "these costs are ultimately paid by people in the form of higher prices, lower wages, and reduced choices."

Meanwhile, our worst health problem, poverty, worsens. The BLS' Electricity Price Index continues to break record highs, and critically, we know that it's policy that's increasing power rates because fuel prices for electricity for both natural gas and coal (which are a combined 70% of U.S. electricity) have fallen and remain very low.

Indeed, when you can't solve the very real domestic problems of today such as spiraling poverty, it's much easier to over focus on the more eccentric and distant ones whose solutions lie in the actions of other countries. In short, "tackling climate" is much easier than "tackling poverty" because progress, or the lack thereof, is much less defined.

As related, "climate scientists" are typically tenured university professors where losing your job is virtually impossible (unless you do something REALLY stupid!), in stark contrast to the typical American who can easily get laid off when costs such as energy increase for companies. For many, climate altruism comes pretty damn cheap.

American Poverty is Rapidly Worsening Source: U.S. Census Bureau

Even worse, policies that increase the cost of energy are being promoted under the guise of helping our most vulnerable, when the exact opposite is true. That's because our most vulnerable are the ones that can least afford higher costs for indispensable necessities like energy - minorities, the elderly, women (especially single mothers), and children. They have far less ability to take care of themselves. As such, we should be doing all we can to decrease, not increase, energy prices.

"Working minority families lag behind white ones in every state," and the Kaiser Family Foundation has the U.S. poverty rate at 24% for Hispanics, 27% for African Americans, and just 10% for Whites. The National Black Chamber of Commerce estimates that the Clean Power Plan will lead to 7 million job losses for African Americans and 12 million lost for Hispanicswith the poverty rate increasing by more than 23% and 26%, respectively. Another study by the Pacific Research Institute found that the rule would increase home energy bills for African Americans by $410 a year.

Over 70% of U.S. elderly live on fixed incomes and simply can't absorb higher energy costs. In fact, a monthly Social Security check gets devoured just paying for the utility bill each year. The 60 Plus Association reports that 72% of likely voters aged 55 and over put the effect of government regulations on their energy bills among top concerns.

Indeed, the real "War on Women" is being waged by those that push policies that increase the price of energy. With 11 million single mothers and female-headed families much more likely to be poor, poverty is the ultimate "women's issue." The female-to-male earnings ratio is still less than 80%.

Pew Research estimates that about 38% of African American children live below the poverty line, and are four times as likely as White or Asian children to grow up poor. For the first time since 1974, the number of poor African American children (4.2 million) outnumber White children (4.1 million), even though there are three times as many White children in America. And there are 5.4 million poor Hispanic children, or equivalent to the entire population of Minnesota.

Researchers at the University of California, Berkeley document the obvious: how being poor erodes health and increases mortality rates, all exacerbated by already rising living expenses like utility bills. Overall, three million more children are in poverty since 2008, 22% of all kids are now poor.

Minorities Are Hurting Most (African Americans as the Example) Source: U.S. Census Bureau

Policies that increase energy prices have very real and even deadly consequences. A staggering 110 million Americans - 35% of the country - are eligible for the Low Income Home Energy Assistance Program (LIHEAP), but typically just 10-20% get that vital help. From 2009-2015, LIHEAP funding fell 33% to $3.4 billion. Keeping cool in hot Summer and warm in cold Winter are necessities for health and safety, and higher energy costs make them much harder for tens of millions. As Joan McCarty of American Association of Retired Persons New York puts it: “every extra dollar that goes to a utility bill is a dollar less for food and medicine.”

Higher electricity and other fuel prices like gasoline or diesel are the proverbial "double whammy." Not only do they directly make Americans pay more to use those key products, but they also increase costs for businesses, which just get passed onto consumers in the form of higher priced items (Reagan once explained this on Carson, see here).

Today, 1 in 5 U.S. families survive on food stamps (SNAP program), with over 46 million Americans on SNAP for over 35 monthsPer Feeding America, “Hunger in America exists for over 50 million people…including more than 1 in 5 children." For low-income families responses to rising energy bills, the National Energy Assistance Directors Association finds that:

  • 24% went without food for at least one day
  • 37% went without medical or dental care
  • 34% did not fill a prescription or took less than the full dose
  • 19% had someone become sick because their home was too cold

Food Insecurity in America is a National Calamity Sources: Feeding America; Children’s Sentinel Nutrition Assessment Program

"Environmentalists" should know that higher energy costs for U.S. companies simply mean more jobs shipped overseas to places like China where there's less stringent environmental standards. Ontario is now seeing how policies that increase the cost of electricity can decimate a once strong manufacturing sector.

And when it comes to the goal of reducing greenhouse gas emissions, which is inherently a global issue, "environmentalists" should also know that "out of sight, out of mind," is a contradiction of their own purported convictions. To illustrate, California posits itself as a global leader in climate policy, but the state is responsible for 34% of all U.S. imports from China, at $130 billion a year. This insightful article here shows how it's been more trade with the West that has surged all-important China's CO2 emissions, where coal is nearly 70% of the energy that powers the export engine.

Governor Brown, your second main trading partner has a carbon intensity 2-3 times higher than that of the U.S., and the International Energy Agency projects China's CO2 emissions to INCREASE 1.6% per year from 2012-2040. Is any of this factored into the "Establishment of a California-China Office of Trade and Investment?I didn't think so.

Unfortunately, we continue to ignore the costs of higher cost energy in the name of reducing greenhouse gas emissions. For example, advocates promote California's progress toward meeting its emission targets for 2020, but disregard the far less appealing statistics for "The Golden State." California has electricity prices 45% above U.S. average, gasoline prices 40% above U.S. average, imports for 33% of its electricity, oil policies that favor OPEC, lost nearly 700,000 manufacturing jobs since 2000, easily lead all states with lost jobs to coal-based China, soaring inequality hurting minorities mostand 12% of the U.S. population but 34% of the Americans on welfare. 

It's true, you can indeed accomplish anything if you completely ignore the costs.