The Democrats in Congress are already holding hearings in preparation for the task of writing legislation aimed at reducing carbon emissions. They have already latched on to the cap-and-trade framework that is prevalent in Europe and down under. How they can consider enacting these draconian restrictions on businesses that are already massively suffering is unfathomable to me. So many companies are suffering layoffs and declining stock prices, and the solution of our government is enacting a measure guaranteed to shrink the economy. Similar legislation passed in other countries has estimated a one percent yearly decline in GDP, at least for the first few years. Of course, the trillions in new spending being proposed will not only offset the carbon trading declines, but also jolt us out the our current recession, right? While it makes sense that we need to do something about excessive carbon emissions, wouldn't it make sense to do it at a later time, when the economic harm suffered by American industry and workers won't be so dire?

Now is also the time to see who will set the upcoming legislative agenda in Washington. Will it be Democrats in Congress, or the incoming President? That situation will tell us a lot about the new President, I believe. If he acts decisively to set his own agenda, that will be a sign that he plans to be an active President, rather than a reactive one (at least as much as he can be). However, I fear that Congress will dictate the agenda, just like the Republicans in Congress did to Bush. Obama needs to demonstrate his willingness to veto legislation, especially if it is bad for the economy right now. Otherwise, Democrats will be setting themselves up for a fall in 2010, just as voters rejected the Democratic leadership in 1994 after they got too carried away with reforming health care and raising taxes.