Timothy Carney
2008-03-21 07:00:00.0
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WASHINGTON -

Julian Robertson, the legendary hedge fund manager, has placed a big bet on the long-term decline of the U.S. economy. Additionally, Robertson is invested in the nuclear energy industry and in Chinese biofuels. He’s also launched an aggressive lobbying campaign to pass federal legislation instituting mandatory caps on greenhouse gas emissions.

Whether his enthusiastic backing of the Al Gore agenda of constricting fossil fuel use is a way to strengthen his bet against the U.S. economy, an effort to boost his nuclear or biofuels positions, or simply — as the media have put it — philanthropy, is hard to decipher.

But Robertson’s story and the debate over climate change policy reveals the enormous double standard in discussions of regulation and government control: While the anti-regulation side always has its motives questioned, the pro-regulation side is rarely subject to skepticism.

Big businesses have long been lobbying for federal restrictions on greenhouse gases. Enron, General Electric, DuPont, Goldman Sachs and many top energy companies have lobbied hard for “cap-and-trade” laws that would impose federal restrictions on greenhouse gas emissions by manufacturers and power plants, but allow firms to buy or sell excess emissions credits. In many of these cases, it’s easy to see the financial motive of these “socially responsible” corporations.

GE is deeply invested in alternative energy sources that have little demand absent government mandates or restrictions on effective sources of energy such as coal and oil. The firm has already bought up “greenhouse gas credits” — worthless goods until Congress actually caps the gases. DuPont, Goldman and dozens like them have also positioned themselves to get rich from government action on this front.

When the media notice a large corporation standing to suffer from an intrusion of government or benefit from a deregulation or tax cut, we are immediately warned about conflicts of interest. Amazingly, when the media notice the Green Beltway Bandits lined up behind carbon caps, they see this as further proof that the time has come for government action.

As a case in point, unless you spend time going through federal lobbying records, you probably haven’t heard of Robertson’s big push for cap-and-trade laws. Robertson has hired top lobbying firm Akin Gump to advance such restrictions on Capitol Hill, in the public and in policy arenas. Akin Gump even runs a global warming blog now called “Climate Intel.”

Akin Gump lobbyists doing Robertson’s bidding on Capitol Hill include former Republican National Committee Chairman Ken Mehlman and former Reps. Bill Paxon, R-N.Y., and Vic Fazio, D-Calif. What’s Robertson’s angle? Environmental publication Greenwire described Robertson as a “former hedge fund tycoon and now a philanthropist.” Robertson indeed closed down his most famous fund, Tiger Management, earlier this decade, but is still a big investor. Getting richer — not merely philanthropy — motivates these investments.

Relevant to his cap-and-trade position are his investments in China’s leading biofuels maker Gushan and in a company that deals with nuclear waste disposal. Given the right global warming legislation, both of these investments will benefit.

A bigger Robertson bet, presenting a more insidious angle, is his short position on 10-year Treasury bonds paired with a long position on two-year Treasuries. Basically, if the U.S. economy is fundamentally unsound, Robertson gets rich. “I’ve made a big bet on it,” Robertson told Fortune. “I really think I’m going to make 20 or 30 times on my money.”

Robertson sees lots of reasons for an impending downturn, but severe restrictions on coal and petroleum use would help along a recession. A study released last week by the National Association of Manufacturers reports that leading climate change bill S2191 (which Akin Gump is now pushing) would, in the year 2030, cost the gross domestic product at least $631 billion, cost 4 million jobs, reduce household incomes at least $4,000, double electricity prices and nearly double gasoline prices.

Such a report, funded, albeit, by a trade group opposing the legislation, highlights both the down sides of climate-change legislation and a possible up side to the legislation for a man betting against the U.S. economy.

Maybe this is too conspiratorial an interpretation of Robertson’s actions, but simply ascribing them to “philanthropy” is granting a free pass — a pass the media would never grant to a company opposing regulation.

Examiner Columnist Timothy P. Carney is senior reporter for the Evans & Novak Political Report.