In a deposition released by the House Committee on Oversight and Government Reform, John Beale, a former top official at the Environmental Protection Agency’s (EPA’s) Office of Air and Radiation, exposed the agency’s intent to “modify the DNA of the capitalist system” through various regulatory actions affecting America’s primary source of electricity generation.

Project: Fundamentally Transform Economic Liberty—i.e. Capitalism?

It is important to note that Beale testified under oath on December 19, 2013, after pleading guilty to stealing government property and posing fraudulently as a CIA agent for more than a decade. His testimony, therefore, could have no bearing on the disposition of his sentencing; he was free to tell the truth.

According to the deposition, Beale was assigned to lead a three-phase project that he and (then Assistant Administrator) Gina McCarthy devised over a private lunch on or around April 29, 2010. Beale explained the three phases of the EPA’s strategy in his sworn deposition:

“There were several phases of this project as we had outlined it. There’s an enormous body of literature on the subject. Sometimes it’s referred to sustainability literature, sometimes it’s referred to green economics. And so phase 1 of the project was for me to become very familiar and transversant [sic] with that literature. Phase 2 would have been out and interviewing academic experts, business experts, people in other countries that are doing things.

And then phase 3 would have been coming up with specific proposals that could be – could have been proposed either legislatively or things which could have been done administratively to kind of modify the DNA of the capitalist system…”

Within a year of that meeting, the EPA proposed costly regulations on existing coal-fired power plants such as the Mercury and Air Toxics Rule (colloquially called Utility MACT) and the court-deferred Cross State Air Pollution Rule (CSAPR).

Ongoing Regulatory Assault

Recently, the EPA proposed CO2 emissions limits on new power plants that will further advance President Obama’s goal of bankrupting the coal industry, which has been his well-documented agenda since before his first inauguration. More importantly, the EPA is poised to unveil even more disastrous regulations on CO2 emissions for existing power plants. Indeed, a recent study finds that Utility MACT and CSAPR alone could force 60 gigawatts of coal-fired generating capacity to shutter by 2016, which represents almost 20 percent of the total coal-fired generating capacity in the United States. Adding unrealistic greenhouse gas rules for new and existing power plants would likely deal a death blow to the U.S. coal industry.

Now the EPA, through the sworn testimony of one of its once-highest paid officials, has revealed the administration’s true agenda. The war on coal is not a figment of the imagination of tens of thousands of coal workers throughout the country, but a concerted effort at the highest levels of President Obama’s executive branch to eradicate affordable, abundant, reliable energy. At this point, no one should doubt the seriousness of Obama’s campaign promise to bankrupt the coal industry. It is but one part of “modifying the DNA of the capitalist system.”

Beyond Coal, Beyond Gas, Beyond Comprehension

Thanks to EPA Administrator Gina McCarthy and pretend erstwhile CIA spy John Beale, President Obama’s goal to “fundamentally transform America” is closer to becoming reality. Indeed, bankrupting America’s chief source of electricity generation—and putting thousands of coal miners out of work—would fundamentally modify the DNA of America’s capitalist system, but not for the better. The “skyrocketing electricity prices” that President Obama promised would also change America for the worse.

Look no further than Mexico to see the folly of discarding economic liberty in favor of executive fiat. While America’s energy production on state and private lands has boomed in recent years, production from Mexico’s government-owned Pemex has faltered, just like production on U.S. government lands. But Mexico is finally learning its lesson—proposing to ease restrictions on energy development to encourage private investment—while the Obama Administration goes the way of McCarthy, Beale, and all the other government planners through the centuries who thought they were smarter than the general public and could solve all the problems if they could only exercise control over everyone else’s life.


Capitalism is nothing more than economic liberty or, put differently, economic individualism. When the Obama administration talks about changing the DNA of capitalism, they want to restrain economic liberty and reduce the ability of individuals to make their own decisions—whether about their own health care or about their energy future.

The Beale deposition may, in the end, reveal the true motivation behind the Obama climate action plan. Rather than concerning itself with climate change or carbon emissions, it may be that the administration has determined that controlling America’s economy is the number one priority. If, as Beale contends, the final goal of Gina McCarthy’s EPA is to affect the basic structures of the American economy rather than environmental policy, then it becomes increasingly more important for Congress to explore the underpinnings of the Obama climate action plan, which may masquerade as environmental policy when in truth serving a more politically subversive role of undermining the basis of America’s economic strength, namely, capitalism itself.

This week’s revelations doubtlessly warrant further congressional inquiry and more transparent regulatory disclosure by the Environmental Protection Agency and its current administrator, Gina McCarthy.

IER Policy Associates Travis Fisher and Alex Fitzsimmons authored this post.

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