The Wall Street Journal - 02.10.2019

A16| Wednesday, October 2, 2019 THE WALL STREET JOURNAL.

Is a Carbon Tax the Least Bad Green Plan?

Christopher Crane and Ted Hal-

stead tout the Climate Leadership

Council’s (CLC) proposed carbon-

emissions tax combined with a car-

bon dividend paid to American fami-

lies as a pro-business, pro-

environment and pro-consumer

climate solution (“How to Cut Emis-

sions Without Wrecking the Econ-

omy,” op-ed, Sept. 23). They say that

a carbon “fee” will start at $40 a ton

and increase annually at 5% above

inflation. Assuming 2% inflation, the

$40 fee will be $110 (an increase of

175%) in 15 years. That type of finan-

cial bite will accomplish a desired

change in American lifestyles, but

also might depress business and

consumer sentiment, disrupt vital

economic sectors and dampen eco-

nomic growth. “Dividends” (i.e., re-

bated tax money) will offset the

pain, but in Washington the house

always wins.

A study indicates that the bottom

70% of American households (ranked

by income) will receive more in divi-

dends than they pay in increased en-

ergy costs. There is a significant in-

come-redistribution teaser to make

the plan more popular, but no tax

plan in the U.S. has ever been pro-

gressive enough to satisfy progres-

sives. Also, Messrs. Crane and Hal-

stead reassure us that the tax-to-

dividends conduit will be secured by

ironclad legal covenants that prevent

any diversion of funds. The “lock-

box” for Social Security and Medi-

care isn’t an encouraging example of

Washington’s fiduciary conduct.

One appeal of the proposal is that

it could be viewed as a hush-money

payment that keeps the Green New

Deal zealots at bay for a couple of

years, but the risks of economic mal-

feasance in Washington outweigh

the plan’s meager effect on global

climate change and the temporary

sidelining of Green New Dealer’s de-

manding zero carbon emissions and

a full overhaul of the U.S. economic

system.

RONALLEN

Columbia, Md.

The market-based proposal by the

CLC may be one of the last chances

for American conservatives to have a

voice in the crafting of legislation

fighting climate change. Make no

mistake, this is coming; public and

private perception of the effects of

climate change will force it.

Conservatives may be able to de-

lay Congress, but allowing climate

change to worsen even more before

starting to take action will increase

the chance that radicals will craft

the needed response as voters be-

come more frightened.

The sooner we adopt a market-

based solution like the carbon-divi-

dend plan, the better the chance we

have to avoid the worst conse-

quences of both climate change and

the actions needed to address the

problem.

E.J.PARKER

Long Beach, Calif.

The authors lead us to believe

that 70% of Americans will see a net

benefit in the carbon dividend. As-

suming that is true, then 70% of

Americans would be disincentivized

to reduce their carbon emissions.

How do the authors propose to hit

their emission-reduction targets?

JOSEPHSCHMIDT

Kew Gardens, N.Y.

The CLC believes not one dime

will be siphoned off to pay for other

noble climate causes, including many

of those outlined in the now infa-

mous Green New Deal. The CLC says

its plan is “revenue-neutral and

won’t increase the size of the federal

government.” Who, but the federal

government, has the authority to es-

tablish and maintain carbon border

adjustments for the tens of thou-

sands of products—from foodstuffs

to manufactured goods—that enter

and leave the U.S. every year? The

bureaucracy needs to set, monitor

and reset these “adjustments.” The

reaction of other nations to all this

will be nothing short of massive.

The CLC needs to pull its head out

of the sand and look at the political

gold rush its deeply flawed plan will

set off.

PAULRANKIN

Annapolis, Md.

What I don’t see in this proposal

is a cost-benefit analysis. No men-

tion is made of the increased prices

of consumer goods and services that

will be necessitated by these “in-

creased energy costs.” Higher energy

costs, whether contrived or genuine,

will result in a lower standard of liv-

ing for all Americans.

WILLIAMMORSE

Grosse Ile, Mich.

LETTERS TO THE EDITOR

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“Is it just me or

is ‘flatbread pizza” redundant?”

THE WALL STREET JOURNAL

Pepper ...

And Salt

No End in Sight for California Homeless Mess

Regarding your editorial “Califor-

nia’s Hobo Paradise” (Sept. 24): Men-

tal illness, addiction and the release

of thousands of prisoners, all un-

doubtedly contribute to the current

California homeless situation, but the

core of the problem is supply and de-

mand. The Golden State has a 3.

million unit dwelling deficit, and last

year constructed just 125,000 new

homes.

California’s dirty little secret is

that its housing shortage, and the

homeless crisis it created, persist be-

cause every current California home-

owner and most politicians have a

vested interest in maintaining the

status quo. For the truly wealthy, it is

a matter of scenery, proximity and

density. No tech titan or Hollywood

celebrity wants his or her views

blighted with affordable housing.

Likewise, while they are all publicly

concerned with economic disparity

and childhood poverty, elites want

neither anywhere near their own

progeny. Finally, like everyone else,

they desire no more traffic than they

currently endure.

Most politicians, beholden to

wealthy donors, acquiesce to their

wishes. Even those politicians who

try to improve the situation inevita-

bly shoot themselves in the foot.

Watch the effects of statewide rent

control worsen the problem.

Any student of OPEC or De Beers

realizes that California’s housing

shortage isn’t organic, but purpose-

ful. The shortage, and the homeless

crisis it begets, will remain until the

housing supply dramatically in-

creases. The day before you pub-

lished this editorial, Gov. Gavin

Newsom, speaking at the U.N., noted

how humiliating he found the current

presidential administration. Evidently

the governor is more embarrassed by

President Trump then the fact that

130,000 of his fellow Californians

permanently reside outside, like live-

stock. Perhaps that, too, is part of

the problem.

RONDAROSS

Austin, Texas

There’s no evidence that even the

most liberal and generous approaches

to homelessness make any dent in

the problem. Indeed, the more money

that is spent on the problem, the

worse it seems to get. In San Fran-

cisco there are more than 8,000 core

homeless despite city expenditures of

more than $300 million a year to ad-

dress the crisis.

The current approach to homeless-

ness sets up a permanent homeless-

industrial complex, as Christopher

Rufo (“‘New Left Urbanists’ Want to

Remake Your City,” op-ed, Aug. 23)

points out. Armies of well-inten-

tioned—and salaried—outreach work-

ers beg homeless people to accept

free services and then report that

they are not ready yet.

A radical conservative approach to

the problem would begin with St.

Paul’s admonition: Those who don’t

work shall not eat. It’s worth a try.

DAVIDOWENROBINSON

Danville, Calif.

I agree. President Trump did per-

form a public service last week when

he highlighted the causes of home-

lessness in California, particularly

San Francisco.

Like many, for years I took my

family to San Francisco, looking for-

ward to walking the hilly streets, rid-

ing the cable cars, visiting the sea-

port, making our way to Alcatraz and

enjoying the diverse dining options.

San Francisco is no longer a destina-

tion for us. We simply don’t feel safe

there. When will the politicians

(Democrats) in California wake up

and see what their policies are doing

to this wonderful city? We have truly

left a piece of our hearts in San Fran-

cisco—and are not going back.

JOHNWARD

Darien, Conn.

Foreign Influence and Double Standards

W

ashington is in an impeachment
frenzy, which is a dangerous mo-
ment for facts and context. A classic
example is the political and
media overreaction to Mon-
day’s stories concerning Sec-
retary of State Mike Pompeo
and Attorney General William
Barr and impeachment.
Mr. Pompeo’s alleged mis-
deed is that he was among those listening to Mr.
Trump’s July 25 telephone call with Ukraine
President Volodymyr Zelensky. But why
shouldn’t a Secretary of State be on a call to the
new President of an important country? U.S.
foreign policy is the secretary’s job. As far as
we know, Mr. Pompeo isn’t responsible for Mr.
Trump’s decision to mention Joe Biden in that
conversation. This is not impeachable behavior,
or even impeachment news.
As for Mr. Barr, he is supposedly implicated
because he asked Mr. Trump to ask Prime Min-
ister Scott Morrison for Australia’s cooperation
with the Justice Department probe of illegal
foreign influence in the 2016 election. Mr. Barr
and prosecutors have also sought the coopera-
tion of other foreign governments.
We certainly hope they have. Everyone has
known for some time that Justice is investigat-
ing what happened in 2016, and Justice made
that public last week in a statement when the
transcript of Mr. Trump’s Ukraine phone call
was released.
“A Department of Justice team led by U.S.
Attorney John Durham is separately exploring
the extent to which a number of countries, in-
cluding Ukraine, played a role in the counterin-
telligence investigation directed at the Trump
campaign during the 2016 election,” the state-
ment said. “While the Attorney General has yet
to contact Ukraine in connection with this in-
vestigation, certain Ukrainians who are not
members of the government have volunteered
information to Mr. Durham, which he is evaluat-
ing.” Some media scoop.
Australia’s cooperation is important because
it relates to the role that Alexander Downer, for-
mer Australian foreign minister, played in tip-

ping off U.S. intelligence about Trump campaign

adviser George Papadopoulos’s comments about

Russia in July 2016. This relates to how the FBI

came to rely on Russian misin-

formation to open a counterin-

telligence probe into the

Trump 2016 campaign.

The press is portraying

Monday’s news as a plot to

“discredit” former special

counsel Robert Mueller. But the Mueller probe

is over. The former special counsel chose not to

investigate the Russian origin story and he

never publicly explained his reasons. Yet there

are many unanswered questions that deserve in-

vestigation because laws may have been broken.

It is routine for U.S. prosecutors to seek help

from foreign counterparts in such cases.

Note the double standard at work here. Dem-

ocrats and most of the press corps want to im-

peach Mr. Trump for inviting foreign help to in-

vestigate Joe Biden and his son’s role in

Ukraine. But at the same time they want every-

one to forget that the Clinton campaign in 2016

paid for foreign dirt that the FBI used to justify

a secret surveillance warrant against the Trump

campaign.

That is what Mr. Barr has asked Mr. Durham

to investigate, and the U.S. Attorney has a repu-

tation for being thorough and fair. He may find

there was no illegality involved. But investigat-

ing this is a public service because half of Amer-

ica now wonders if James Comey’s FBI took

sides in a presidential election based on foreign

propaganda ginned up by the opponents of Don-

ald Trump.

This attack on Mr. Barr looks like a pre-emp-

tive warning to steer him and Mr. Durham off

the case, or to discredit anything they might

conclude or prosecute. “Democrats’ worst fears

about William Barr are proving correct,” says

the headline on a news article by the Washing-

ton Post’s Aaron Blake that is a textbook exam-

ple of partisan framing.

We hope the prosecutors won’t be deterred.

When Washington is in impeachment heat, it

pays to be skeptical and look for the other half

of the story.

Democrats want to stop

Barr from investigating

what happened in 2016.

Liberal Meltdown at the FEC

F

or an example of why so many Ameri-
cans perceive administrative agencies
as partisan and unaccountable, look at
the antics of Federal Election
Commission Chair Ellen Wein-
traub, who has inserted her
agency into the Trump im-
peachment debate and dis-
torted campaign-finance law.
Last week Democrats
started calling for President Trump’s impeach-
ment over his phone call with Ukrainian Presi-
dent Volodymyr Zelensky. Ms. Weintraub, who
has been publicly baiting Mr. Trump for
months, posted to the FEC website a draft cam-
paign-finance interpretation designed to sug-
gest the President had committed a crime. An-
other FEC commissioner, Caroline Hunter,
objected to the rule’s inclusion in the FEC’s
email digest without further discussion. That
could lend the agency’s imprimatur to a parti-
san stunt.
The digest was never sent out. Ms. Wein-
traub then reproduced the digest in a series of
tweets Friday, which have been retweeted more
than ten thousand times. She wrote, “I always
thought these anti-regulatory people”—pre-
sumably referring to Ms. Hunter—“liked the
First Amendment well enough. I guess they
think it’s just for corporations.”
Speaking of the First Amendment, consider
Ms. Weintraub’s campaign-finance interpreta-
tion. Federal law prohibits “a contribution or do-
nation of money or other thing of value” to a U.S.
election campaign by a foreign national. Ms.
Weintraub wants to expand “thing of value” to
include information. Her draft rule states that
“soliciting, accepting or receiving information
in connection with an election from a foreign na-

tional” could “result in the receipt of a prohib-

ited in-kind contribution.” However, the Justice

Department found that Mr. Trump’s call with Mr.

Zelensky was not a campaign-

finance violation.

The rule Ms. Weintraub

proposes would likely be un-

constitutional. If any “infor-

mation” offered “in connection

with an election” is prohibited,

then gossip between an American campaign

staffer and a noncitizen Uber driver ahead of an

election could be prosecuted. There’s a reason

the Mueller report said treating “opposition re-

search or similar information as a thing of

value” could “raise First Amendment ques-

tions.” Perhaps “anti-regulatory people” simply

want to follow the Constitution.

Ms. Weintraub appears more interested in

grandstanding than in the substance of the law.

She posted the rule to the website unilaterally

and in response to political developments though

the FEC lacks a quorum to adopt it.

This isn’t the first time Ms. Weintraub has

politicized her position. She sent a letter in Au-

gust asking Mr. Trump “in terms a former ca-

sino operator should understand” to back up his

claims about voter fraud, and piped up with an-

other campaign-finance rebuke on Twitter after

Mr. Trump’s remarks to ABC in June. If she were

honest about her bias, she’d recuse herself from

FEC cases concerning Mr. Trump.

Regardless of whether Congress impeaches,

Mr. Trump will one day leave office. But by

casting aside constitutional considerations and

shedding even the appearance of impartiality,

bureaucrats like Ms. Weintraub are inflicting

serious damage to public confidence in U.S. in-

stitutions that may last far longer.

The chair politicizes

campaign-finance law to

support impeachment.

There Is a Commission-Free Lunch

C

harles Schwab caused brokerage stocks
to tumble on Tuesday by announcing
commission-free online trades that
could trigger a cascade across the industry. Be-
hold how competitive markets are making in-
vesting less expensive for ordinary folks with-
out government intervention.
Only 7% of retail broker-dealers offer online
or internet trading business, but they have be-
come popular among younger and small-dollar
investors who want to try their hand at stock-
picking. They also help banks and brokerage
firms attract new customers, which is one rea-
son they are cutting commissions and fees.
J.P. Morgan Chase last year announced 100
commission-free trades in an effort to recruit
young customers to its other investment ser-
vices. Fintech companies have also launched
free trades with smart-phone apps, and last
week discount electronic trading platform In-
teractive Brokers Group Inc. introduced zero-
commission trades.
This put pressure on Schwab, which has long
been an industry trend-setter, to eliminate its
$4.95 commission. Schwab’s stock dropped 9%
on Tuesday following its announcement, though
TD Ameritrade Holding Corp. (26%) and
E*Trade (16%) fell even more as shareholders
predicted they will also eliminate online trade
commissions to stay competitive.
Once commission-free online trades become

the norm, brokers may cut fees on other prod-

ucts too. As the Securities and Exchange Com-

mission recently noted in its broker best-inter-

est rule, “Although discount brokerage firms

generally provide execution-only services and

do not compete directly in the advice market

with full service broker-dealers and investment

advisers, entry by discount brokers has contrib-

uted to lower commission rates throughout the

broker-dealer industry.”

This price deflation is especially notable af-

ter Obama Labor Secretary Tom Perez sought

to ban broker-dealers from charging commis-

sions with his fiduciary rule, which was blocked

by the courts. The rule would have impelled

brokers to shift customers to fee-based ac-

counts that can cost small savers more than

trade-based commissions.

Many brokerage firms had already moved to

charging fees for investment advice because

they can be more profitable than commissions

for executing transactions. Mr. Perez elided the

practical distinction between the two, and his

fiduciary rule would have reduced competition

and limited retirement investment options.

The SEC’s new best-interest rule allows bro-

kers to continue charging commissions as long

as they aren’t putting their own pecuniary in-

terests ahead of their customers. But Schwab

is showing how competition can make busi-

nesses better stewards for their customers.

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