“Keystone XL – Should Have Been an Answer to Jobs and Debt”

Sydney M. Williams

Thought of the Day

“Keystone XL – Should Have Been an Answer to Jobs and Debt”

January 24, 2012

“We will be able to look back and tell our children that this was the moment when we began to provide for the sick and good jobs for the jobless; this was the moment when the rise in the ocean began to slow and our plane began to heal.” So spoketh the audacious (and arrogant) Barack Obama on June 3rd, 2008, in St. Paul, Minnesota, after having defeated Hilary Clinton to become the Democratic nominee for President. If the sick are better off than they were, it is because of continued advances in medicine and healthcare. Certainly, little that is positive can be attributed to the Affordable Healthcare Act that very few fully understand and has yet to be fully implemented, or paid for. I am unsure if oceans are rising or falling, or whether our planet is better off than it was, but good jobs have not been provided for the jobless. And federal indebtedness is creating an albatross around the neck of all our citizens, especially the young.

The jobs situation has been an unmitigated disaster. According to data from the Bureau of Labor Statistics, by the end of 2011, there were just over six million fewer people on non-farm payrolls than there had been at the start of the recession. For the first time since demobilization following World War II, disposable per capita income has shrunk, and has been shrinking for the past five years. And in the past three years, the federal government has tacked on an additional $6 trillion in debt, or about $20 thousand for every man, woman and child. Are we better off today than four years ago?

The country faces two monumental problems – jobs and debt, too little of the former and too much of the latter. While the first is of immediate concern and the second is a long term problem, the solution to both emanates from the same source – economic growth. From what we read and hear, the President plans to address the issue this evening, but that begs the question as to why he let a small number of wealthy environmental lobbyists block his approving of the TransCanada Keystone XL Pipeline. The obvious reason is because they are financially important to Mr. Obama’s reelection efforts – a campaign expected to cost a billion dollars! It is important to keep in mind that environmental consciousness is a function of wealth. Environmentalists, for the most part, are wealthy individuals – part of the one percent!

Policy makers must balance the economic interests of all their citizens against the demands of a few environmentalists. Saving the planet is a laudable goal, but creating jobs, at the moment, is more imperative. It is natural to want to live in the most pristine environment affordable, with the emphasis on affordable. I am both beneficiary and witness to those tendencies, living as I do within the estuary of the Connecticut River.

The XL Pipeline seemed to pass muster with most of these people. A Congressionally passed rider to the December 23 Payroll Tax Bill was designed to give the President a way out of the box he was in – placed between those who need jobs and those who, in the interests of environmentalism, would prevent them. That rider concluded that “no further Federal environmental review [regarding the Keystone XL Pipeline] shall be required.” Common estimates suggest that the $7 billion project would have created 20,000 direct construction jobs, and more than 100,000 indirect jobs along the almost 2000 mile route. With 8.5% unemployment and with Iran threatening the Straits of Hormuz, the decision seemed obvious. The President, however, deemed the pipeline not in our national interest and that, despite the message from Congress, more studies need be made. Presumably he must consider the only thing in our national interest is his re-election. Certain basic principals inherent to our political system are worth remembering at a time like this, as our leaders seem too often to forget them. The most basic tenet is that government workers are paid from taxes collected on those working in the private sector. Public sector workers are for the most part bureaucrats. They do not generate economic value. They consume the private sector’s dollars. They work for the people, and need to be reminded of that fact regularly. A second tenet is that Congress, not the President, enacts laws.

Ironically and with no thanks to the Administration, U.S. oil production has surged over the past three years. Horizontal drilling and hydraulic fracturing that have driven the natural gas industry over the past few years are technologies that are being used for the production of oil in regions such as the Bakken shale area in North Dakota. As a result, oil production has risen 17% to just under 9 million barrels per day. Nevertheless, approval of the pipeline would have created jobs and decreased oil dependency from unfriendly places like Venezuela and the Middle East.

Our country needs pro-growth economic policies. Higher nominal income tax rates are not the answer. The complexity of the code has become the briar patch for those like Jeff Immelt of GE and Warren Buffett, as it favors the very rich and crony capitalists who are in bed with their buddies in Washington. These people and companies don’t care what the nominal tax rate is. Their lawyers are paid to find ways of skirting its provisions and to lobby for specific deductions and credits. Simplifying the code, making it broader and flatter for both individuals and corporations, may cost thousands of lawyers and accountants their jobs, but that act would do more to stimulate economic growth than any government led investment, such as solar panels or wind farms. In the meantime, the President has cynically decided that money from his “green” friends has a higher priority than thousands of jobs for those in the nation’s mid-region.

Tonight the President will address the nation. His words will be eloquent and will surely resonate with the Left, as they have over the past four years. A year ago his three big projects were high speed rail, high speed internet access for all Americans and green jobs (think Solyndra), all of which proved to be more hype than reality. Obsequious sycophants like the three major networks, the New York Times, Newsweek, CNN, MSNBC and the Washington Post will fawn over his words. However, those of us who have grown skeptical of this man will want to see what he does, not what he says. Cynicism begets cynicism, as the decision in the case of the Keystone XL Pipeline makes obvious.