Free Markets, Free People
Check out this graphic:
Right now the US imports about 70% of its oil. 30 years ago, we only imported 28%. What happened?
Well our economy boomed, we created a huge demand for more oil and we had to find other sources. But that’s not the only reason. The government of the US hasn’t been the most helpful ally in this battle for resources. ANWR is the perfect example of what not to do politically. The Clinton era narrative of “it will take 10 years before we have anything” rings hollow right now some almost 20 years later. Obviously had we done what was necessary then, we’d be reaping the benefit now.
But that graphic is stunning, don’t you think? In a partnership with Canada (the country from which we import the most oil and it is a extraordinarily secure source), who now provides about 20% of our total consumption (US + Canada = ~ 58% of our annual total), we could be 92% self-sufficient in 20 years. What that would mean is we could get that other 8%, for instance, from Mexico (now providing about 10% of the total). Or not. We’d no longer be held hostage by an oil cartel and unfriendly or unstable countries.
Right now 30% of our imports come from Saudi Arabia (2), Venezuela (4), Nigeria (5), Iraq (6), and Algeria (8). We could eliminate every one of them as a supplier. Every. One.
Of course that means doing something politically now. But that doesn’t seem to register with this administration. And that seems funny given the obvious screaming need for them to be seen creating jobs and driving the unemployment rate down.
Check out these numbers from a study by Quest Offshore Resources done at the behest of the American Petroleum Institute and the National Ocean Industries Association.
- Total offshore-related oil and gas employment could hit 430,000 in 2013 if the permit slowdown is reversed, including about 187,000 new jobs.
- New policies could result in a 71 percent increase in oil and natural gas spending in the Gulf to $41.4 billion.
- Texas (will reach 149,000 jobs) and Louisiana (129,000) would gain the most from a return to normalcy in the Gulf, but the jobs impact would touch a number of non-Gulf states as well – including California, Pennsylvania, Ohio and Michigan, Quest says.
- Tax revenues would accrue to all levels of government "if the government pursues a balanced regulatory approach that allows for the timely development of the backlog of (Gulf) projects in an environmentally responsible manner." Said API President and CEO Jack Gerard: "We need to create taxpayers, and that’s what this would be doing."
Result? A 20 year program that would result in jobs, revenue and energy resources.
Seems like a no-brainer right? Politicians are currently embroiled in debt ceiling negotiations, but take a look at what doing something like this would mean:
By granting comprehensive access to U.S. oil and gas reserves, $4 Trillion in state and federal revenue could be generated to fill American treasuries and eliminate nearly 30 percent of the national debt.
That growth would spur new jobs – lots of new jobs:
530,000 jobs could be created with increased access to U.S. oil and gas resources. To put that in perspective, that would provide enough jobs to employ 85 percent of Vermont’s entire population. By 2015, development of the Marcellus Shalealone could create 160,000 jobs in Pennsylvania, 20,000 jobs in New York and 30,000 jobs in West Virginia. Add that to the 9.2 million Americans currently employed by the oil industry and you’ve got the economic engine powering our economy and our way of life.
That is how you turn an economy around. That is how you increase revenues to government. That is how a smart government would approach the current problem (and in more areas than just gas and oil).
Instead we have the “permatorium”. If you’re wondering why this isn’t happening, you need to ask the administration:
"The slow pace of Gulf development since the accident has cost jobs, revenue and energy production," said API President and CEO Jack Gerard. "The study shows what could be accomplished on jobs if project approvals and permits could get back to a normal pace. We’ve done the necessary work raising the bar on safety. We cannot continue to delay developing energy and hiring people in the Gulf. The disappointing unemployment numbers from the government last week make this more important than ever," Gerard added.
The “accident” of course is the spill in the Gulf. And Gerard is right. This slow down, after the industry has “raised the bar on safety” is inexcusable. Especially in this unemployment climate. Especially in this economic climate. Especially with tax revenues down. And especially with energy insecurity so prevalent.
9.2% unemployment, a slowing economy, a revenue starved government, a country suffering from energy insecurity and a huge part of the answer sitting right there in front of them – and they refuse to act.
Obama says it’s time for us to “eat our peas“. Well, here’s the problem, jacka$$ – I don’t like peas.
I’m an adult. Been one for almost thirty years, in fact, so I have a lot of practice at it. I’m older than you, jerk.
So take your sage advice about how we adult citizens just have to suck it up and bend over for your political friends one more time, and shove it in Joe Biden’s cheek pouches.
If I were a political consultant for a Republican, tea-party-oriented candidate for president (or indeed for any federal office), I would suggest that a central campaign theme be “It’s time to start treating Americans like adults.”
I believe Obama’s condescending smarminess is grating and offensive to a lot of voters. The Republicans are fools if they don’t offer a counterpoint to it.
This “treat us as adults” theme encompasses many things. It means allowing us to make our choices about our lives and our jobs, and be responsible for the outcomes. That includes a whole host of areas that the federal government has completely screwed up in their attempts to treat us like irresponsible children.
– We need to be responsible for our own retirement. We don’t need to be treated like children who don’t understand the value of money, can’t see the future, and don’t have the self-discipline to save.
– We need to be responsible for our own healthcare. We don’t need to be treated like children who must be told what to eat, when to exercise, and what treatment they are to get when they are sick, without any thought to how to pay for it.
– We need to be responsible for our own businesses. The vast majority of business owners are adult enough to know what safety precautions to take, and what accounting standards to use. The small minority that doesn’t understand safety should have their butts sued off and lose their businesses when they are negligent. The tiny minority that commits accounting fraud should be put in prison.
– We need to be responsible for our property. That starts with allowing us to keep our own money, and spend it as we like. It also implies some stability that is not currently in evidence, so that we don’t lose huge sums in real estate and stock investments because of governmental incompetence and cronyism with the executives of large companies.
– We need to be more responsible for our own safety. Sure, there’s always a need for law enforcement, but it can’t be the first resort for personal safety. Any law enforcement that could do that would be indistinguishable from a police state. Therefore, we need the right to buy, possess, and use the weapons that provide that safety.
– We need to be responsible for raising our own children. We need to have more influence over their education, and we particularly need to stop wasting our time reversing the indoctrination they suffer at the hands of the educational bureaucracy.
– We need to be responsible for treating other people appropriately. If we are stupid or obnoxious in our treatment of others, we need to suffer social consequences, not legal ones.
I know transitioning to treating Americans as adults would be hard. We’ve now had a couple of generations of government dependents, and they have been actively discouraged from learning the skills and responsibilities of adulthood.
The problem is that we’ve reached the end of our rope on supporting this class, which has a natural tendency to grow.
The fundamental problem we face (and that all societies face) is that there are plenty of people who don’t want to be adults. They want to go on being children. It’s easier, at least superficially. Being an adult is hard; you have to make agonizing decisions sometimes. You sacrifice your own pleasures for your children. You deal with random outcomes, such as acts of nature. You have setbacks, and you only have yourself and those who will voluntarily help you to deal with those setbacks.
So these folks have made a pact with the devil. They get to go on essentially being children, with their housing, food, and healthcare guaranteed at a certain level. They can have children without the trouble of getting married and taking on a long term commitment. They can slough off their education. When things go bad, they can do the equivalent of a toddler’s temper tantrum by blaming any convenient third party for their own lack of capability to deal with life.
They never gain the satisfactions of being an adult, but they do get to avoid the responsibilities – at least, until the whole thing comes crashing down around them, leaving them completely unequipped to deal with the wreaked society into which they will eventually be thrust.
Some of them go one step up the ladder. They take jobs in the public sector. OK, at least they are willing to work, and a lot of public sector employees do work pretty hard. But they still exhibit many of the same childlike expectations. They expect that their job will always be secure, with no thought or concern for where the money comes from. They expect constantly rising compensation. They expect to be insulated from any real criticism by those outside the bureaucracy, i.e., the common citizens.
It’s no wonder that we’re having trouble as a society facing reality. We have created a large class of people whose entire daily existence is based on avoiding the real, adult world.
However, I believe that group is still a minority. At least, I hope it is. With its natural tendency to grow, however, it won’t be a minority for much longer.
So, while we still have a majority of people who prefer to be treated as adults, we need to appeal to that desire. We need to leverage it to shame some people into dropping their something-for-nothing expectations. For example, we need those archetypical self-sufficient farmers to give up every single subsidy they get, and run their farms like the self-sufficient adults they pretend to be. We need to shame businessmen to stop sucking at the government teat and provide goods and services that people will voluntarily purchase, without subsidies, special favors, or restrictions on their competition.
No society constituted with a majority of childlike adults is stable. Greece is the most obvious recent example.
Obama is never, ever going to treat American citizens as adults. He is psychologically incapable of it. Where Bill Clinton could give in and sign welfare reform, Obama can’t. It’s simply inconceivable to his leftist soul that society could move further from his leftist principles instead of closer to them.
The short term, then, is for Republicans to stand firm against his desire to turn more Americans into childlike adults. No more taxes. Insist on spending cuts, using whatever leverage comes to hand. Endure stalemate, if necessary, because it’s worse than the alternative. Giving in to Obama just means more ground to retake later.
The medium term is to realize that a complete turnaround is absolutely necessary in the relationship between American citizens and their federal government. Citizens must be allowed and required to be adults.
I believe if the GOP embraces this as a guiding principle, we would see a bigger electoral triumph than 2010, bigger than 1994, bigger than 1980. I believe there is latent demand in our citizens for being treated as equals instead of wards. I think they’re sick of condescending lectures on eating their peas from incompetent, smug Democrats who have failed at everything they have tried. I think many are disheartened that they want to take on the mantle of adult responsibility, but they can’t because they can’t find jobs.
However, if we get another Republican candidate who is from the same vein as authoritarian Democrats – say one that believes government control of healthcare is just fine and showed his true colors by implementing it in his state – then the GOP will forfeit a lot of that latent demand.
The GOP might still win with such an authoritarian-minded, political class approved, “to the manor born” candidate. Bill Quick thinks his Pomeranian could beat Obama, and it’s hard to argue with his reasoning.
But without sweeping majorities, clarity of mandate, and courageous, principled leadership at the top, the Republicans won’t be able to get anything of consequence done. They’ll fritter, attempt to look “bi-partisan” to please the mandarins at the Washington Post and New York Times, get gamed by the Democrats, and lose what is probably our last chance to make a real reversal before the debt resulting from our social welfare failures sends the economy into complete meltdown.
Seriously out of touch:
Three days after the U.S. Department of Labor reported that the national unemployment rate had ticked up from 9.1 percent in May to 9.2 percent in June, President Barack Obama said that the loss of jobs in the public sector is “evidence” that his $830-billion economic stimulus legislation worked.
“Now, without relitigating the past, I’m absolutely convinced, and the vast majority of economists are convinced, that the steps we took in the Recovery Act saved millions of people their jobs or created a whole bunch of jobs,” Obama said at his Monday press conference.
Except he can’t point to anything to prove his point. What we do know, however, is much of that money went to pay down the debt of the various states, which is hardly likely to create jobs. We also know it was spent on things like “Operation Fast and Furious” which certainly didn’t lead to any jobs – at least here in the US.
So this is the only place he has to point:
“And part of the evidence of that is as you see what happens with the Recovery Act phasing out,” he said. “When I came into office and budgets were hemorrhaging at the state level, part of the Recovery Act was giving states help so they wouldn’t have to lay off teachers, police officers, firefighters. As we’ve seen that federal support for states diminish, you’ve seen the biggest job losses in the public sector–teachers, police officers, firefighters losing their jobs.”
Or, ”we didn’t save anything, we just delayed, for a short time, the inevitable.”
That makes it hard to claim that the stimulus “worked”. Public sector jobs don’t contribute to the economy – they’re a drain. Oh sure we’ve decided they’re a necessary expense, but they don’t contribute to the economy the way a private sector employee does. What has been said for years is we can’t afford the overall expense of government – that it must cut back to “necessary” and drop the “unnecessary”. There was the easy way to do it (when the economy was good) and had they done so state governments would have been in better shape when the downturn hit. But they didn’t. Government has a tendency to expand when revenues increase, not contract. So when revenues contract, they are unable to fund the excess.
So the stimulus didn’t create or save jobs, it funded the excess jobs states and localities should have shed long ago as “unnecessary” and, more importantly, “unaffordable.”
Look, this unemployment problem is the beast that will devour Obama and he knows it. But if this is the best he can come up with, he’s in for a very long and bumpy re-election campaign, at least when it comes to this subject.
Many on the Right despise the very idea of a “tax subsidy” and think that a targeted tax credit or deduction is just letting people keep their money. To say otherwise, so the conventional wisdom goes, is to assume that the government owns all our income. I think there’s a well-meaning error in this thinking, and I’ll illustrate that with a simplified example.
Two countries are running deficits, or start with balanced budgets (take your pick). Country A decides that next year they’re going to establish a tax credit for farmers worth $X. Country B decides that they’re going to send an equal amount, $X, to their farmers as direct subsidy payments.
- In both countries, farmers have an extra $X in their pockets.
- Both countries must borrow an extra $X, meaning that future taxpayers in both countries are on the hook for $X plus interest.
There might be a minor difference in efficiency between having the IRS administer a tax credit and having the Department of Agriculture cut checks, but everything else is basically the same. Yet Country A acted through the tax side of the ledger, while Country B acted through the spending side. If Country B is subsidizing its farmers, then so is Country A. Hence, tax subsidy.
There’s no trick here. The key is that it’s not all about the spending and tax rates this year. It’s about future taxpayers too. If current taxpayers don’t pay for what the government is spending this year, then future taxpayers must. A deficit-financed “tax cut” without a spending cut is just shifting taxes into the future. That doesn’t lower the long-term burden of government.
Importantly, there’s no claim here about who should pay, this year or in the future. But the people who are really being “subsidized” are those who would be most politically vulnerable to getting taxed today if the burden wasn’t shifted onto future taxpayers.
Some on the Right say that if we raise taxes today, that won’t save future taxpayers anything because the government will just spend all the new revenues and then some, and we’ll be back in a deficit. So we might as well “starve the beast” by cutting taxes, right? That may have some strategic merit, but there’s still a tax subsidy to whatever extent “starving the beast” doesn’t work, and since big deficits tend to raise interest rates, there’s a built-in compounding cost to future taxpayers, so you better hope the strategy works well. In the meantime, accepting big deficits makes it easy for supposedly small-government legislators to justify protecting their buddies first, and constant borrowing by its nature tends to risk fiscal crises.
Yes, cutting spending is harder than cutting taxes. Promises to change tax rates and keep them there are more credible than promises to cut spending levels. But spending is where the real battle is, so anyone who wants to carry the small government banner should be at least proportionally more credible on spending than he is on taxes.