President Reagan’s Economic Advisor vs. Ed Gillespie

How pathetic is likely 2014 Virginia Republican nominee for U.S. Senate, Ed Gillespie? The latest example is his laughable attempt to attack Mark Warner for stating what almost any economist will tell you: that putting a Pigovaian (“intended to correct an inefficient market outcome…by being set equal to the negative externalities”) price on “bad” stuff, like carbon pollution, would be a far more market-oriented (and effective) approach than a complicated, gameable approach like cap-and-trade.

Even better, as recent resesarch has shown, a revenue-neutral carbon tax (e.g., one in which revenue raised is returned to people, for instance by cutting income taxes or corporate taxes) would be a significant net positive for the economy – more jobs, more economic output – and for clean energy (wind, solar, efficiency, etc.) rather than carbon-based energy (oil, coal, natural gas). It also would help slash greenhouse gas pollution.

So, what’s not to like about a revenue-neutral carbon tax? Simple: the word “tax” is in it, and unscrupulous, pandering politicians like Ed Gillespie feel like they can use it to launch what they believe might be an effective attack on their opponents (in this case, Senator Mark Warner, who is 100% correct from an economics and public policy perspective in what he says in the video).

The underlying assumption by Gillespie and his ultra-cynical political advisors, of course, is that Virginians are…well, not very bright. Because anyone who looks at this subject for a few minutes knows that a revenue-neutral carbon tax, with corresponding cuts to income and/or corporate taxes, makes a tremendous amount of sense. Heck, even Ronald Reagan economic advisor Art Laffer and conservative ex-Congressman Bob Inglis fully understand this.

Is Ed Gillespie not as bright at those guys? Again, my guess is that he understands the issue perfectly well (after all, it ain’t rocket science), it’s just that he doesn’t care. Anything to launch a political attack by consummate, inside-the-Beltway political player Ed Gillespie. That type of person, of course, is THE LAST person we’d want representing us in the Senate.