Tapping abundant US energy deposits would create jobs and restore prosperity

Our nation’s economic growth may finish an anemic 2% on the year. Faced with looming taxes and regulations, few companies are expanding, hiring or buying equipment. More than 14 million Americans are unemployed, excluding the nearly 9 million who have been forced to take part-time jobs, or the 2.5 million who’ve given up on finding work.

Meanwhile, 140,000 have been added to government payrolls, and the nation is spending $4 billion a day more than it’s taking in.

That is unacceptable, demoralizing – and unnecessary.

The White House and Democrats are clueless about reinvigorating the economy. But they have proven they know how to kill jobs, prosperity and hope. Their energy policies are especially destructive.

As President Obama made clear, under his tutelage electricity costs would “necessarily skyrocket,” gasoline prices would soar, “green” energy would become the law of the land, and he would “fundamentally transform” America. He is keeping his promise.

America’s vast storehouses of untapped oil, gas, coal and uranium could generate millions of jobs and hundreds of billions in revenues. Electricity generation industries and the factories and other businesses that depend on reliable, affordable energy could do likewise, if they were unshackled from excessive regulations that often actually harm health and environmental quality.

Instead, the Environmental Protection Agency, Departments of Energy and the Interior, and other government bureaucracies continue to impose a near-total shutdown of onshore and offshore oil and gas leasing. They drag their feet or simply reject drilling permits, display antipathy toward hydraulic fracturing to tap our 100-year supply of shale gas, and impose truckloads of punitive air and water rules designed to shutter dozens of coal-burning power plants.

The President claims he will “pare back regulation” by several billion dollars – out of an estimated $1 trillion in total annual regulatory compliance costs. EPA alone promised “$126 million” in supposed paperwork reductions, while imposing several hundred billion dollars in new EPA regulations.

Mr. Obama finally suspended EPA’s proposed ozone rules, which many had warned would be the most expensive environmental edicts in history. But they will be back with a vengeance after the 2012 elections. Meanwhile, bowing to EPA and environmentalist pressure, he postponed action on the Keystone XL pipeline, which would have created 20,000 almost-shovel-ready construction jobs.

Now EPA wants 230,000 new bureaucrats, just to process future carbon dioxide emission permits, based on bogus climate chaos models and scenarios. Even our worst nightmares cannot fathom the job-killing compliance costs this would impose on the 6,000,000 businesses these regulations would affect.

Again using questionable to fraudulent assertions about catastrophic manmade climate change to justify its actions, EPA is also demanding 54.5 mpg fuel economy standards – which will result in thousands of deaths and millions of injuries, as cars are further downsized and plasticized.

Even businesses on the leading edge of the “green revolution,” crony capitalism and lobbying for dollars are faring poorly. After lapping up $1.5 billion in government red-ink subsidies and loan guarantees, three US solar companies filed for bankruptcy and fired over 2,000 workers. And still the Energy Department shoveled more billions of tax dollars into more wind and solar projects, despite voter objections.

DOE also sponsored programs that cost $20 million to create 14 jobs and weatherize four Seattle houses in a year. It spent $80 billion to create 225,000 “clean energy” jobs – at $356,000 apiece. It shells out $6 billion a year to grow corn on an area bigger than Indiana, and convert it into ethanol that gets a third less mileage per gallon than gasoline.

This isn’t “green” energy. It’s “greenbacks” energy. It requires perpetual infusions of taxpayer money, confiscated from hard-working, productive sectors, and given to companies that have better political connections. That is unconscionable, and unsustainable.

America must promote and permit projects that actually generate energy, jobs and revenues. It must reward and encourage companies that provide affordable 24/7 energy to power virtually everything we make, grow, transport and do.

Unleashing America’s vast supplies of shale oil and gas, conventional petroleum, coal and nuclear energy isn’t a magic potion. But it is a vital part of the solution to what ails our nation.

The petroleum industry alone currently supports some 9.2 million jobs, but could do much more. Recent studies by Wood McKenzie, ICF International and other analysts conclude that opening currently off-limits onshore and offshore areas could generate an additional $800 billion in government revenues and another 1.4 million jobs, by 2030. That includes primary jobs for roughnecks on rigs; secondary jobs in steel making, construction, pipelines, refineries, transportation and other sectors; and indirect jobs in hotel, restaurant, retail and other sectors that benefit from the increased energy, payrolls and economic activity.

We could do likewise with coal, nuclear and hydroelectric projects.

We need American energy for American jobs – tapping resource bounties to help balance the budget, drive down unemployment and get the country going again.

We can and must protect human health and environmental quality – from real threats, not exaggerated, speculative or computer-generated threats. We can and must do so without raising energy and business costs even higher, killing more jobs, and stifling private sector and government revenue opportunities.

Over-regulation brings energy poverty and blackouts, destroys jobs, impairs families’ living standards and nutrition, leads to foreclosures and homelessness, increases stress and alcohol abuse, makes it harder for families to afford proper heating and air conditioning, and harms people’s health and welfare.

Those impacts must be fully considered, along with putative benefits of current and future regulations. If laws and rules don’t pass muster, they need to be rewritten, rejected or repealed.

Subsidies do not create jobs. Getting overzealous government out of the way, ending government deficit spending, letting business work within a sensible regulatory system, ensuring that companies have the affordable energy they need – that creates permanent, sustainable jobs and brings renewed prosperity. That generates revenue streams that curb the need to raise taxes on productive companies and workers.

As election year 2012 dawns, voters must demand that presidential and congressional candidates explain how they will reform our legal and regulatory system, to tap US energy bounties, while protecting environmental values from actual risks, and ignoring exaggerated, imagined and invented dangers.

Unaccountable politicians, bureaucrats and environmental ideologues have strangled our economy long enough. We the People must now lay the foundation for producing more domestic energy, creating jobs, and ensuring that our children can look forward to a brighter future.

American energy can ignite America’s renewal, and restore American jobs, opportunity and prosperity. Voters need to send Congress, the White House and EPA a message:

We need American resources for an American recovery. Slash the crippling regulations. Drill here in America. Produce affordable energy, to create jobs and fix our economy. Do it now!

Paul Driessen is senior policy advisor for the Committee For A Constructive Tomorrow and author of Eco-Imperialism: Green power – Black death.

 

WesternFront America

The most formidable couple in the world during the 1980s was Ronald Reagan and British Prime Minister Margaret Thatcher. Thatcher, a conservative and a woman of iron will, must be looking across the Channel with some amusement to see how her German counterpart, Chancellor Angela Merkel, is literally the only person keeping the European economy from collapsing and, it must be said, taking England and America with it.

The cover article of this week’s Business Week noted that “Merkel is the daughter of a Lutheran pastor. She won a PhD for a thesis on quantum chemistry…though childless, she is known as Mutti, for Mother.” Born in the post-war years, “Merkel’s worldview reflects the German desire for stability. Chaos plagued the German-speaking people long before there was a German nation…Later the hyperinflation of the 1920s and Depression of the 1930s, both of which undermined the middle-class, gave rise to Nazism.”

Plainly said, Angela Merkel is showing the rest of the world why Keynesian economics doesn’t work; that governments with huge “entitlement” programs and a tendency to throw vast amounts of money at their problems invite disaster. If Europe does not plunge into chaos, it will be because she refused to bail it out with the deutschmark.

Meanwhile, the Federal Reserve is moving billions to Europe to ease its lending crisis.

If you read just one book this year, I recommend James Rickards’ “Currency Wars: The Making of the Next Global Crisis” ($26.95, Portfolio Penguin). An advisor to the Department of Defense, the U.S. Intelligence community, and major hedge funds on global finance, he brings more than thirty years’ experience to a book that explains what has gone so terribly wrong and why.

Rickards spells out how the U.S. economic system has been gamed over the years to ensure that “elites captured most of that growth in income and profits.” It is the reason we are just learning that many members of Congress have grown wealthy using insider information, an act that would land anyone else in jail.

“Over time and with increasing complexity, returns on investment in society begin to level off and turn negative…Bureaucracies that started out as efficient organizations turn into inefficient obstacles to improvement more concerned with their own perpetuation than with service to society.”

This is a definition of the U.S. Departments of Education, Labor, Housing and Urban Development, Health, and Energy, along with the quintessential monster, the Environmental Protection Agency. For good measure, include Fannie Mae and Freddie Mac, the two mortgage loan agencies.

In a chapter titled “Endgame—Paper, Gold or Chaos?” Rickards looks at the weakness of the U.S. dollar, pointing out that “As the dollar and sterling were trading places in the 1920s and 1930s, there was never a time when at least one was not anchored to gold.”
“Gold is not a commodity. Gold is not an investment. Gold is money par excellence. It is truly scarce—all the gold ever produced in history would fit in a cube of twenty meters (about sixty feet) on each side, approximately the size of a small suburban office building.”

“Today, under Bernanke’s guidance, the United States is trying to do what England did in 1931—devalue…What is happening instead is that all the major currencies are devaluing against gold at once. The result is global commodity inflation, so that beggar-thy-neighbor has been replaced with beggar-the-world.”

Rickards’ book is a warning against what we are witnessing. “Perhaps the most likely outcome of the currency wars and the debasement of the dollar is a chaotic, catastrophic collapse of investor confidence resulting in emergency measured by governments to maintain some semblance of a functioning system of money, trade and investment.”

The two currency wars of the last century led to two world wars. Rickards warns that “The path of the dollar is unsustainable and therefore the dollar will not be sustained.” A return to the gold standard “offers the best chance of stability.”

Rickards recommends that the big banks be required to become smaller and that derivatives be banned because “they serve banks and dealers through high fees and poorly understood terms.” Derivatives are contracts between two parties that define the value of underlying variables. The “bundling” of mortgages that were then sold as assets is an example and, as the financial crisis revealed, their value was dubious at best, criminal at worst.

“The dollar,” says Rickards, “for all its faults and weaknesses, is the pivot of the entire global system of currencies, stocks, bonds, derivatives and investments of all kinds. It is the store of economic value in a nation whose moral values are historically exceptional and therefore a light to the world. The debasement of the dollar cannot proceed without the debasement of those values and that exceptionalism.”

The coming national election will be a choice between a President who does not believe the United States of America is exceptional and whoever the Republican Party selects to help the nation return to its fundamental values.

© Alan Caruba, 2011

 

WesternFront America

As the citizens of the United States and the seventeen member-nations of the European Union look on, a great drama regarding the future of the EU and its currency, the Euro, is occurring.

The essential problem is that both the U.S. dollar and the Euro are just so much paper, despite the promises and guarantees that they will be honored as real money. The trick has been to keep everyone believing there are sufficient real assets to back up those promises.

Since the U.S. dollar is a kind of universal currency to which other nations peg the value of their currencies the problem for everyone is that the U.S. is broke. Its debt exceeds its annual capacity to generate income, otherwise known as its Gross Domestic Product. Every hour of every day it must borrow billions to meet its obligations. Forty cents of every dollar the U.S. spends is borrowed.

There is a reason why television these days if filled with commercials offering to sell gold. Gold has always retained its value though it does fluctuate. The U.S. Treasury’s gold hoard has a value of more than $400 billion these days, but that value is the flip side of the Federal Reserve’s demolition of the dollar which has lost 95% of its value since1913, the same year the Fed was created.

Currently the Federal Reserve has been printing vast quantities of dollars—quantitative easing—that only serves to devalue it. The dollar is backed by the “full faith and credit” of the United States, but for the first time in our history our credit rating has been downgraded by agencies such as Standard & Poor’s and Moody’s.

Not that the rating agencies haven’t also been part of the problem. They are famous for telling everyone that the bundled mortgage assets of Freddie Mac and Fannie Mae were okay right up to the day the 2008 financial crisis occurred and Lehman Brothers collapsed

When the 2008 financial crisis hit, the American taxpayer was tapped to bail out a number of banks, a huge insurance company, and even General Motors. This was followed by “stimulus” spending, all of which drove U.S. debt levels to historic highs. The vast matrix of Federal Reserve central banks, government agencies charged with oversight of financial institutions, and the ratings agencies all contributed to the crisis.

The U.S. went off the gold standard in 1931, in effect exporting deflation around the world. Other nations followed suit. At the time, Americans were experiencing high debt burdens, unemployment, and money hoarding. If that also sounds like 2011, you’re right.

The crisis of 2008 was brought about by the “bundling” of mortgage assets. Fannie Mae and Freddie Mac, two Depression-era social justice inventions, currently own 50% of mortgages, many of which were the result of pressures on banks to make loans to people who clearly could not pay them back. What the banks considered “assets” were phantoms whose collateral could often not be traced.

Little noted is the role of the Federal Reserve. A government investigation into the causes of the 2008 financial crisis concluded that “The prime example is the Federal Reserve’s pivotal failure to stem the flow of toxic mortgages which it could have done by setting prudent mortgage-lending standards. The Federal Reserve was the one entity empowered to do so and it did not…”

What the Fed had done, in fact, was to lower the interest rate it charged for lending to banks to very nearly zero.

In his book, “Currency Wars: The Making of the Next Global Crisis”, author James Rickards explains what is actually occurring.

“The United States now has a system in which the Treasury runs non-sustainable deficits and sells bonds to keep from going broke. The Fed prints money to buy those bonds and incurs losses by owning them. Then the Treasury takes IOUs back from the Fed to keep the Fed from going broke.”

We’ve been here before in two previous currency wars, the latter of which led to World War II. The problem then and now is the need for job creation, something that can only be achieved by private enterprise.

The United States government has not provided a good environment for its business and industrial community to invest and expand. It has, as just one example, very nearly the highest corporate tax in the world; beyond that, a vast matrix of regulations makes doing business in America expensive, difficult, and often uncompetitive.

How this will all play out depends in large part on whether Americans are prepared to reduce the size of a government that grew precipitously in the 1930s and the second half of the last century. We must begin to slowly and fairly phase out the “entitlement” programs.

The great question facing Europe is whether the EU disbands and its members return to individual national sovereignty in a response to a continent-wide economic disruption caused by unsustainable debt in its southern tier nations. The EU was a response to a history that generated two major wars in the last century, bankrupting the continent morally, socially, and economically. The road back has been in part due to U.S. aid and protection against the former Soviet threat.

While the possibility of abandoning the Euro was unthinkable bare months ago, it is now an option; a very difficult option because of the vast interconnectiveness of Europe’s and our own banks.

In America the only real hope we have is that in November 2012 we will elect men and women who will turn the ship of state around before the latest currency war sinks ours and the world’s economies.

© Alan Caruba, 2011

 

WesternFront America

At present, the amount of the annual Gross Domestic Product, $14 trillion—the value of all the goods and services that generate income—is exceeded by the nation’s debts.

America is presently $15 trillion in debt and it grows daily.

In a November 21 Wall Street Journal interview, Erskine Bowles of the presidential advisory commission on the nation’s debt, said “If you take 100% of the revenue that came into the country last year, every single dime of it was consumed by our mandatory spending and interest on the debt.”

“Mandatory spending in English is basically the entitlement programs, Medicare, Medicaid and Social Security. That means that every single dollar we spent last year on national defense, homeland security, education, infrastructure, high-value added research—every single dollar was borrowed, and half of it was borrowed from foreign country.”

“That’s a formula for failure in anybody’s book.”

In truth, we are looking at a coming global financial collapse with experts from Credit Suisse to the Deutche Bank, the CEO of General Motors to Warren Buffett, all in agreement that the question is not if, but when.

It will come at a time when there is little, if any, real leadership to be found either in the U.S. or Europe, the most spendthrift of nations facing this crisis.

Thomas Jefferson, one of the most brilliant of our Founding Fathers, said “I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.” He also said that “It is incumbent on every generation to pay its own debts as it goes.”

Another Founding Father, James Madison, warned Americans against the concentration of power saying, “I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpation.”

Over the years, more and more power has been concentrated in the federal government and it requires the dismantlement and elimination of several of its components. Americans need to say no to the Departments of Education, Energy, along with the Department of Housing and Urban Development. These are all functions previously addressed by the states.

You will not find any of these activities specified in the Constitution. Consider when they came into being:

Education was established in 1953, originally as the Department of Health, Education and Welfare. In 1979, it was subdivided into Education and Health and Human Services.

The Department of Housing and Urban Affairs was created in 1965.

The Department of Energy was created in 1977.

Thus, between 1953 and 1979, a period of 26 years, the federal government took control of key factors of the nation’s affairs, most if not all are dealt with far better at the state and local level.

To these must be added Freddie Mac and Fanny Mae, two government “entities” responsible for the housing mortgage crisis and currently asking Congress for billions more to cover their losses.

The Tenth Amendment of the Constitution specifically says that “The powers not delegated to the United States by the Constitution, nor prohibited by it by the states, are reserved to the states respectively, or to the people.”

Congress is filled with men and women for whom their position has become a sinecure as they are elected and reelected, some for decades But Congress has proved itself unwilling to govern the financial affairs of the nation. A recent vote in the House rejecting a proposed balanced budget amendment reflects this.

In 2012, the voters will have the opportunity to reverse this failure, electing men and women who will vote for term limits, a balanced budget amendment, and other necessary changes.

We have witnessed what happens when Americans lose sight of the vision of our Founding Fathers and the Constitution they bequeathed to posterity.

We are that posterity.

The present generations of Americans are obligated to save the nation or see it fail.

© Alan Caruba, 2011

Related articles

• Financial Red Alert: Europe On Verge Of ‘Apocalyptic’ Debt Crisis, Only Days Remaining (colonel6.com)

 

WesternFront America

We are living in times when the structures involving the global financial system, national security, and self-governance are under attack, decaying, or just self-destructing due to all the ills to which humanity is prone.

Wars in the twentieth century were always an example of either the failure of nations to resolve their differences or of the ancient human inclination to steal whatever they can from their neighbor. Wars organize this into armies for that purpose. The other cause for war is the necessity to rid the neighborhood of the crazy guy who’s hoarding weapons and building bombs.

What is occurring of late, however, goes beyond the usual casus belli to something far greater, a loss of faith in national and international banking systems, aggravated by the failure of nations to act in a prudent fashion to protect the wealth of their citizens and their national sovereignty.

The cause of this is socialism, the polite name for communism. Like Islam, it exists for world domination, the control of the population for the enrichment of those holding the reins of power. It is no accident that the U.S. Congress is filled with millionaires or those who soon will be.

Communism, the creation of a man who never held a job in his life, Karl Marx, and its theoretically gentler version, Socialism, has proved to be a failure wherever it was implemented. It is always introduced as the antechamber to utopia, a better life for everyone and it has always led to the slaughter of millions in the name of achieving it. It is just another form of slavery.

Socialism, as practiced throughout the United States and Europe, dependent as it is on the “redistribution of wealth” in the form of “entitlement” programs is now crashing down around the heads of various elected leaders.

As the former British Prime Minister of Britain, Margaret Thatcher, once famously said, “Sooner or later you run out of other people’s money.”

When you pile on debt beyond the mind’s capacity to imagine and you empower “super committees” or hold desperate meetings as are occurring in Europe, public faith in national currencies begins to disappear and with it a rational world in which goods and services generate income.

We are now 66 years since the end of World War Two, the war that followed “the war to end all wars”, World War One. Peace—the absence of war—lasted a scant twenty-one years in Europe before the latter cataclysm began in 1939.

Times of turmoil are the perfect opportunity for tyrants of every description to emerge, organize the collective anger, and launch new wars. In the past 66 years of “peace” there has been a succession of wars, usually between Communist and Capitalist nations such as the Korean and Vietnam Wars or civil wars. The recent wars and revolutions in the Middle East have been about oil and who gets to pump it out of the ground.

Threatening the entire world is the rise of the Islamic Revolution. Islam is less a religion than a battle plan for global conquest that has the added fillip of enslaving its adherents in a faith system that demands total obedience on pain of death. Unbelievers in general face this threat. Israel in particular always has.

Capitalism isn’t a perfect system, subject to periodic cycles of recession and depression, but it does require a greater measure of individual freedom than any other in order to encourage the kind of innovation and risk-taking that creates vast wealth-producing economies.

The problem the West is facing has been brought on by the profligate and often corrupt waste of the people’s wealth. This has been the result of metastasizing laws whose ultimate purpose is to keep populations from demanding more freedom from rapacious taxing, borrowing, and spending. Even central banks are powerless against this. Ours, the Federal Reserve, has responded by printing dollars out of thin air.

On November 18th a proposed constitutional amendment that would require Congress to balance the budget failed in the House. The U.S. is currently $15 trillion in debt. The worst fears of our Founding Fathers are coming true. Presiding over the nation is a Marxist ideologue and his henchmen.

When the Congress of the United States of America refuses to obey the limits of the Constitution, you have failure.

When that same Congress refuses to reform “entitlement” programs and reduce massive spending, you have failure.

When the Federal Reserve—a central bank that is not a part of the federal government— owns most of the nation’s debt, you have failure.

In my lifetime, the United States of America went from a largely Capitalist system and society to one of near total government control. It is Socialism supported by an insane system of taxation lacking even the appearance of fairness.

The United States has moved too far away from the purpose of the Constitution, established to “form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity…”

We are that posterity,

In the decades since the last Great Depression a succession of Congresses has bankrupted the nation once again. It is happening as well in Europe because nations like Greece, Italy, Spain, Portugal, Ireland and France thought they too could defy common sense and fiscal prudence.

It is system failure on a global scale.

Americans and the citizens of Europe are the unwilling victims of too much government, too much regulation, too much corruption, too much taxation, and the general inclination of those in charge to acquire as much wealth for themselves while keeping the rest of the population complacent with “redistribution of wealth” schemes that always fail.

The Tea Party movement is calling for a restoration of America. We have precious little time to do that and it is the Democratic Party in league with unions who oppose that goal.

© Alan Caruba, 2011

 

WesternFront America

By Bishop Harry Jackson, Jr.

We should develop previously unavailable energy resources to generate jobs, revenues.

Maryland’s 7.2% unemployment rate is below the national average, but still too high. Budget shortfalls next year could reach $700 million or more, the Maryland Budget and Tax Policy Institute warns. Many of our cities and counties likewise face mounting debt.

Families need temporary assistance to address unemployment, poverty and homelessness. Aging roads, sewer systems and other infrastructure need repair. Revenue projections for 2012 and beyond will not cover these programs, education, healthcare, and public employee pensions, the institute cautions.

Faced with unpalatable reductions in programs and growing opposition to tax increases, the Free State clearly needs reliable new revenue sources.

One source could be natural gas from the Marcellus shale formation that extends beneath western Maryland and four neighboring states. Of the four, only Pennsylvania is tapping it so far, but the results are impressive.

The Pennsylvania Department of Revenue reports that Marcellus gas production generated more than $1.4 billion in state tax revenues since 2006; by 2020 it could generate $20 billion more. Those activities created 72,000 Pennsylvania jobs between October 2009 and March 2011.

By 2020, gas production from the formation could support 256,000 jobs across the five states, at an average annual salary of $73,000 – well above the national average – energy experts say. Abundant new natural gas supplies from other US shale deposits have helped cut the price of natural gas in half, to below $4.00 a thousand cubic feet, making it more affordable for home heating, electricity generation, petrochemical feed stocks, and backing up unreliable wind and solar installations.

A recent analysis found that Pennsylvanians saved $633 million in utility bills since 2006, due to these expanded supplies.

Maryland too could be harnessing Marcellus gas to boost its economy, job growth, and state and county revenues. Thousands of able-bodied workers would prefer employment at good salaries over welfare, unemployment and food stamps.

Drilling and production could also help thousands of small businesses that would provide goods, equipment and services to drilling, pipeline and related companies. In Maryland, 19% of these businesses are owned by African Americans – still more by other minorities.

And yet there is strong opposition to harnessing these resources – primarily because doing so involves a new process called hydraulic fracturing (HF or “fracking”). Actually, fracking isn’t all that new.

It has been used in more than a million US wells during the past 60 years. It employs high pressure fluids to create tiny fissures in impermeable, hydrocarbon-rich rock formations, allowing companies to tap their energy. But over the past few years, HF has been combined with horizontal drilling and other techniques, so that many wells can be drilled from one site, reaching multiple formations up to several miles away and unlocking huge supplies of previously unavailable natural gas.

But certain groups are using fear tactics to delay or stop fracking. They claim it is not federally regulated. They say it “could” contaminate groundwater and drinking water. They suggest it is incompatible with efforts to improve the Chesapeake Bay’s health.

In reality, hydraulic fracturing is regulated under state and federal laws, as well as industry guidelines. A 2009 Ground Water Protection Council review concluded that enacting additional federal regulations “would be costly to the states, duplicative of state regulations, and ultimately ineffective because such regulations would be too far from the field of operations.” US Environmental Protection Agency Administrator Lisa Jackson has said there is no recorded incident in which fracking contaminated a drinking water well. This shouldn’t be surprising.

Shale gas formations are typically thousands of feet below groundwater supplies, with layers of shale, limestone and other impermeable rock in between. The first several hundred feet of each well has special steel “casing” cemented in place to protect water supplies; the actual drill hole and pipe goes through this casing. In addition, the fluids used in fracturing are 99.5% water and sand.

The other 0.5% is mostly weak salts and acids, vegetable or other oils, guar gum and other chemicals, many of which are found in foods and common household products. However, we still should know what is in specific fracking fluids, and must ensure that they are handled, recycled and disposed of properly.

Faced with environmentalist pressure and public concerns, Governor Martin O’Malley signed an executive order to study fracking. His decision is understandable.

However, he should ensure that the study is completed in a timely manner; is based on facts, not protests and unsubstantiated fears; and does not result in unnecessary over-regulation. A proper review would also take advantage of the studies, laws, regulatory frameworks and hands-on experience in Pennsylvania, North Dakota, Texas and other states that have used fracking for years.

It would also recognize that hydraulic fracturing is essential for producing most natural gas (and all these benefits), just as we need to mine the coal that generates over half of Maryland’s electricity. In fact, every energy option (including wind and solar) requires mining and fossil fuels – and affects wildlife habitats and environmental quality. We need to be wise stewards of the Earth God gave us, in everything we do.

Responsibly developing this vital God-given shale gas resource would put thousands of Marylanders back to work, improve people’s living standards, generate billions of dollars in government revenues, balance county and state budgets, and produce more American energy for all Americans.

Bishop Harry Jackson, Jr. of Beltsville, Maryland is chairman of the High Impact Leadership Coalition and co-chair of the Affordable Power Alliance (www.AffordablePowerAlliance.org)

 

WesternFront America

“I see nothing in the present situation that is either menacing or warrants pessimism…I have every confidence that there will be a revival of activity in the spring, and that during the coming year, the country will make steady progress.” That’s what William Mellon, the U.S. Secretary of the Treasury, had to say on December 31, 1929. The Great Depression would last until 1941 when the U.S. entered World War Two.

“Could we have a crash a la 1929? The flat answer is no.” So said Dr. Pierre A. Rinfret, a noted economist, writing in Time magazine on October 5, 1987 and, on October 19, 1987—instantly dubbed “Black Monday”—the Dow Jones average plunged 508 points.

Despite the pronouncements of Presidents and pundits, it was the December 30, 1929 edition of Variety, a newspaper for the entertainment industry, that got it right. The day after the crash its headline read, “Wall Street Lays an Egg.”

All through history, the opinions of “experts” have been subject to revision and derision. The Internet has simply multiplied our access to a multitude of opinions. It behooves us all to pick our experts very carefully. A good track record is always a good sign, along with a healthy measure of common sense.

As the economies of the U.S. and several European nations totter on default it is essential to draw on lessons from the past. The most obvious lesson is that the governments of the U.S. and the Europeans have been spending far more than they can tax or borrow.

All have spent decades since the 1980s wasting billions on “alternative” sources of energy in the name of global warming or climate change. All have stayed busy before and since the end of World War Two consolidating power in the U.S. federal government and more recently in the European Union.

Herbert Hoover on whose watch Wall Street crashed in 1929 generally gets the blame, but five years earlier in an address to the annual meeting of the U.S. Chamber of Commerce, Hoover said, “The test of our whole economic and social system is its capacity to cure its own abuses,” warning that, “If we are to be wholly dependent upon government to cure these abuses, we shall by this very method have created an enlarged and deadening abuse through the extension of bureaucracy and the clumsy and incapable handling of delicate economic forces.”

“The clumsy and incapable handling of delicate economic forces.” Spoken nearly 90 years ago!

What a perfect phrase to describe what the nation has been passing through as Congress during the last days of the Bush administration and the passed two and a half years of the Obama administration has demonstrated.

The financial crisis of late 2008 was the result of government “entities”, Fannie Mae, created in 1938, and Freddie Mac, created in 1970, both intended to stimulate the housing market by securing the loans made by banks for the purpose of giving everyone, including those who could least afford it, the opportunity to own a house. By the time the crisis hit, they jointly owned more than 50% of all U.S. mortgages.

The failure of communism in the former Soviet Union (1922-1991) should be proof enough that government ownership of property and the means of production is one of the all-time bad ideas of the last century. A modified version exists in China with other versions existing from North Korea to Cuba. All depend on oppression and coercion.

The irony, of course, is that the Great Depression was extended by Hoover’s successor, Franklin D. Roosevelt, who believed that expanding the role of government was the best way to bring the Depression to an end. Instead, the Depression, experienced as well by European nations in the wake of World War One, gave rise to totalitarian governments and World War Two.

There is a reason that President Obama’s approval ratings, along with those of Congress, are at record lows. Most astonishing is the fact that, when Obama took office, the Democrats controlled both houses of the legislature, the Senate and the House. Even more astonishing, Obama pursued the same failed programs of FDR, most famously sponsoring a multi-billion dollar “stimulus” bill, along with taking over General Motors and Chrysler, ginning up a Cash-4-Clunkers program, and discovering belatedly that there were few “shovel ready” infrastructure projects.

By 2010, the voters returned political power in the House of Representatives to the Republican Party, largely on the basis on newly minted “Tea Party” candidates. Obama’s Congress had rejected his proposed budget and the nation has been operating with “continuing resolutions” to fund its activities and a massive battle over raising the debt ceiling for the same purpose. A farcical congressional “super committee” has been told to cut a trillion and a half dollars out of government spending.

The economic advisers that Obama brought into the White House have all departed with the exception of the Secretary of the Treasury, Timothy Geithner. The various government departments continue to spend millions authorized by the Congress every week or engage in dubious “loan guarantees” which give every indication of being a series of Solyndra scandals.

Despite the increasingly absurd assertions of the President, it’s not just corporations, large and small, making decisions about the current and near-term future of the economy. It is the vast body of Americans who are deciding what to purchase, whether to expand their business by hiring or not, whether to invest in stocks or gold, and thousands of individual decisions by which the real economy is shaped.

It is their decisions that determine how long the recession lasts, not the official pronouncements about when the last one “ended” or a new one begins. Economists of a conservative point of view know what must be done and should be listened to, but they are not advising this President, nor guiding the government’s decisions.

In the midst of this latest of many financial crisises at home and abroad, the campaign for the next presidential election has begun. Much depends on who John Q. Public elects to the office. Much depends on the long, hard slog to reduce the size and grasp of the federal government.

Will the wisdom of “the crowd” prevail over the present “experts” affecting the economy?
Stay tuned.

© Alan Caruba, 2011

 

WesternFront America

POLITICO Breaking News:
August 5, 2011

“Credit rating agency S&P has downgraded U.S. debt from AAA, the first debt downgrade in U.S. history, the Associated Press reported.”

When a nation’s debt equals its entire annual gross domestic product, it is bankrupt. It can still produce goods and services, but it will likely encounter fewer customers worldwide as they too are drawn deeper into their own debt crises.

When it must borrow billions daily just to meet its obligations to other nations and individuals who have purchased its treasury notes, it is has reached a point of “moral hazard” that threatens the wealth of every single citizen.

When it raises its “debt ceiling” to $14.58 trillion, the amount its Congress permits, and one day later its Treasury Department announces that its debt reached 100% of its GDP, it is in serious financial difficulty. Not since 1947 when the U.S. was recovering from the cost of World War II have we reached this point.

The nasty “debate” in Washington over the debt ceiling included the Republican demands that we reduce our spending and Democrat demands that we raise taxes. Those advocating sanity were called “terrorists” and “extremists.” The shallow reductions agreed to were stretched over ten years and barely begin to address the immediate financial crisis. Harder decisions were pushed off on a “super committee” that no one expects to agree on anything.

This news is bad enough for the United States of America, but it affects many other nations around the world in exactly the same way the Crash of 1929 did, leading to the Great Depression of the 1930s and putting in motion the events that led to World War II.

Does history repeat itself? Apparently so.

What is happening in America is happening around the world. Greece, a nation of 11 million people, had by 2009 managed to run up its debt to more than $500 billion. Its fellow members of the European Union took notice even though Greece accounted for only two percent of the EU’s economy. A year earlier, the tiny nation of Iceland, population 300,000, had literally bankrupted itself when its debt went from $8 billion in 2001 to more than $48 billion in 2007.

On September 29, 2008, the Irish cabinet held an emergency session by phone because the implosion of its housing market threatened to bring down its financial system. To avoid a bank run, it guaranteed all deposits and, not long after, England did the same thing.

Many people find history boring, but it does provide lessons and what America and its lenders all face is the potential for The Great Depression 2.0. The gyrations on Wall Street and worldwide are evidence of global fears.

In America, the Congress merely applied a band-aid to a gaping wound, the result of the “solutions” instituted during the Great Depression of the 1930s, the entitlement program of Social Security and, in the 1960s, the addition of Medicare. In the 1930s, the federal government guaranteed mortgages by creating Fannie Mae and later Freddie Mac.

When the financial crisis arrived in 2008, they owned half of all the mortgages issued by the nation’s banks. The government was forced to step in and seize both “government sponsored entities” to avoid bringing down the nation’s financial system. At the same time, it agreed to buy up the “toxic assets” owned by a number of banking firms and by the insurance giant, AIG. Billions in public funds were allocated to this.

There probably was no alternative.

In the same way the government in the 1930s initiated all manner of programs to put Americans back to work, the Obama administration created a “stimulus” program while, at the same time, taking ownership of Chrysler and General Motors. The Federal Reserve reduced interest rates close to zero, lending banks and nations billions. By contrast, during the Great Depression the government had allowed hundreds of banks to fail which, in hindsight, contributed the nation’s ills.

Franklin D. Roosevelt had been elected to end the Depression, but after nearly eight years of the New Deal has passed, FDR’s Secretary of the Treasury, Henry Morgenthau, Jr., addressed the House Ways and Means Committee on May 9, 1939, to say, “We have tried spending money. We are spending more than we have ever spent before and it does not work.” Unemployment remained high and would remain high until World War II intervened in 1941.

Much has changed since the 1930s, but much has not.

In 2010, power in the House of Representatives was returned to the Republican Party, but the debate over the debt ceiling revealed the difficulty it had marshalling support for raising it. Many new Tea Party caucus Representatives opposed it. Others argued that only massive spending cuts could remedy the growth of the nation’s debt. In the Senate, controlled by the Democrat Party, any deal that did not include raising taxes was dead on arrival.

Other than the so-called “stimulus” programs, the President devoted all of 2009 to legislation dubbed Obamacare that would have created a government takeover of twenty percent of the nation’s economy. By May 2010, a million people marched in Washington, D.C. to protest it. It has since been repealed in the House and has 26 States allied against it in the courts.

In the 1930s, efforts to keep the world’s economy from imploding found little political support for the measures needed to sustain an integrated world economy. In the modern era of globalization, the same problems have been encountered and, sadly, the United States has shown little taste for reducing its spending as it continues to borrow until, at some point, other nations decide to put their money elsewhere. So far that has not happened.

The United States’ financial future is in peril without a significant downsizing of the federal government and the international economy faces similar challenges as nations share similar debt levels that exceed their ability to meet their obligations.

It will take a minimum of a decade to meet the USA’s present need to reduce spending and reduce the burden of its borrowed debt. Let us hope the voters in 2012 take the first steps toward the political resolve needed by returning power to the Republican Party in the Senate and the White House. Then let us hope they show real political courage.

Let us hope it doesn’t take another world war to focus our attention on survival of a different kind.

Editor’s Note: This commentary was greatly aided by data in the “Lost Decades” by Menzie D. Chinn and Jeffry A. Frieden, recently published by W.W. Norton & Company.
© Alan Caruba, 2011

 

WesternFront America

“I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.” — Thomas Jefferson

My father was a certified public accountant, as is my older brother. I not only lacked any arithmetical skills, I spent much of my early years ignoring the ups and downs of the economy, thinking that these matters were beyond my comprehension. What I failed to understand was that the economy was as much a creature of meddling politicians as economic theories.

I was born in the midst of the Great Depression and have now lived long enough to be caught in a new one. I know that economists and others say we are in a Recession, but it feels like a Depression to me and to the millions of other Americans who are out of work and being laid off weekly. It feels like one to those who suffered foreclosure on their homes. It feels like one every time we go to the supermarket and gasp in disbelief at the cost of groceries.

The unimaginable debt that Americans have incurred by borrowing far too much as a nation and as individuals with credit cards, and the ease with which one could borrow against home equity, has now forced us to deal with the reality of a financial crisis that began in late 2008 when the housing bubble burst.

Historically, it started far earlier when Fannie Mae and Freddie Mac, elements of the 1930s New Deal, were created to bring “social justice” to the housing market. By the time of the 2008 implosion, they owned more than half of all mortgages issued in the nation.

While the politicians seek to position themselves to blame the other party, the saving grace is that in 2010 voters returned power in the House to Republicans; doing so by electing a large number of “Tea Party” candidates pledged to reduce the debt and reverse what have been the disastrous policies of the Obama administration.

Despite the breathless reporting of the 24/7 news channels, the parade of politicians on both sides explaining their positions, the real news is that Americans are finally engaged in a real debate over the debt and the nation’s future. In 2012 they will vote to change course and, just as European nations that also borrowed too much, they will have to accept austerity measures.

A lot of government programs and, indeed, whole agencies and departments should be ended.

It’s not the death of socialism in America, but it is the recognition that a government that seizes and redistributes the wealth of working Americans must be reversed, revised, and reduced in size and scope.

Too much taxation, too much regulation, too much borrowing, and too much wasteful spending is what the national debate is all about and it is a long overdue debate.

In the land of the brave and the home of the free, Americans want to be free to decide what kind of light bulbs they can purchase, what kind of cars they can drive, and end all the other restrictions that make doing business in America an expensive, unrealistic nightmare.

In a way, the infatuation with a completely unknown, untested, and inexperienced president has been a wake-up call. Barack Obama was packaged to be a celebrity, a “messiah”, when all he really was, was an ill-prepared, standard issue Marxist. He surrounded himself with economic advisors and unvetted “czars” who shared his belief that one last, big push could “transform” a nation that was more in need of a sensible budget than grandiose and failed socialist solutions.

The result was the appalling Obamacare law that attempted to seize twenty percent of the nation’s economy. The House has voted to repeal it. Twenty-six States have gone to court to have it nullified. A Republican president and Senate in 2012 will end it.

Obama and the “green economy” advocates around him have dumped billions into wind and solar energy companies that could not exist without government subsidies coupled with government mandates for their use. Combined, wind and solar provide less than three percent of the nation’s electricity and will never meet its needs.

The nation’s auto industry, once the envy of the world, is almost entirely controlled by the government that, even in the midst of the debt ceiling debate, was being told it must produce lighter, more dangerous automobiles to meet unrealistic demands that they provide more mileage per gallon. You cannot get more energy from a gallon of gasoline than you can from any other source of energy that is ruled by the laws of physics.

Openly scornful of fossil fuels, the Obama administration has rendered the nation more dependent on foreign oil and waged war on coal and now natural gas.

The Obama moratorium on drilling in the Gulf of Mexico has wreaked havoc on the oil industry, pursuing the same policies of earlier administrations that have thwarted exploration and extraction of the billions of barrels of U.S. oil that go untapped and unused. Oil rigs have been departing the Gulf to other nations, along with thousands of jobs and millions in the revenue they contributed to the economy. The vast resources of the Alaskan National Wildlife Refuge remain off-limits even though only the tiniest part of the refuge would be affected.

We suffered a socialist “stimulus” that stimulated nothing but an increased multi-trillion dollar debt.

I think America has turned an invisible corner and that as soon as we rid the nation of President Obama and his tax-and-spend Democrat supporters in Congress, the nation will begin to correct its borrow-and-borrow-some-more profligate ways. A smaller, less intrusive government may emerge in the years, the decades ahead.

The entrepreneurial energies of Americans will be unleashed if that occurs. The present Recession/Depression will join all the previous ones we have been through. We have all been chastened and we will conclude it wasn’t just Barack Obama’s policies, but decades of socialist policies dating back to the earliest days of the last century.

If that occurs, our children and grandchildren will have the excessive burden of debt lifted from them and American’s energy, innovation, and optimism will prevail.

© Alan Caruba, 2011

 

WesternFront America

You may recall during the failed fight over imposing term limits on members of Congress the Stasis Caucus argued that the country could not afford to deprive itself of the “leadership” and “experience” of veteran legislators.

In a country where the feds require you to put a sell–by date on water, the argument was politicians only get better as marinate over the decades in the heady atmosphere of Washington, DC.

Well here’s what 27 years in the Senate brings conservatives who view the debt ceiling fight as the first real opportunity to force the Obama abomination to reduce spending: Republican Senate Minority Leader Mitch McConnell offers a debt ceiling “contingency” plan that combines pre–emptive surrender with the approval of Nancy Pelosi.

Meanwhile, Sen. Tom Coburn (R – OK), who is in the last term of the two he’s pledged to serve, offers a list of $9 trillion in potential budget cuts on Tuesday.

The contrast speaks for itself.

Coburn represents voters who want spending cut and believe the debt ceiling negotiations represent a golden opportunity. McConnell offers a plan the Washington Post describes as, “offering President Obama new authority to raise the federal debt limit without cutting government spending” and then boasts in a news conference that, “What we’re not going to be a party to — in the Senate, I’m pretty confident — is default.” Meaning McConnell has lost touch with both reality and Republicans.

This is an epic confrontation. Democrat spenders and their media enablers versus Republicans who believe there is no time like the present to cut spending. House Republicans have the power to block any debt ceiling increase that does not require significant and tangible spending cuts. Looming in the background is the specter of “default.” Yet many have pointed out this “default” is beginning to resemble the same pile of hysteria we were sold regarding the dreaded Y2K and “global warming.”

Last week in an effort to frighten the masses the Washington Post had a page where you could choose “who gets paid (and who doesn’t)” if the debt ceiling is not raised.
It turned out to be a mistake. I took the $172.4 billion and paid all the essentials (Social Security; T–bills; Medicare; Medicaid; federal salaries and benefits; unemployment insurance; food stamps & TANF; military pay; Veteran’s Affairs; Dept. of Justice) and had $700 million left over to invest in Obama’s Capitol bust commemorating his one–term Presidency and the defeat of socialism.

No bond default. No granny being chased by wolves. No obese welfare recipients denied government cheese. Certainly these choices would be portrayed by Democrats and the media (but I repeat myself) as a heartless surrender to greed and selfishness, but I believe the majority of America voted last November for fiscally conservative government and they will support efforts to achieve that end, even if it results in a temporary government shutdown.

McConnell obviously either disagrees or can’t withstand criticism from Anderson Cooper, so he started cutting himself a backdoor to the Alamo. After completing his escape hatch, McConnell was not content to slink away and save himself from a risky and potentially damaging confrontation that could result in social ostracism.

No, he joins the enemy — holding a joint news conference with Santa Anna and praising the generalissimo for his innovative policy that replaces with land–intensive burial plots with sustainable funeral pyres that use all natural ingredients.

You can’t even dignify the McConnell plan by calling it a “contingency.” It’s a collaboration. McConnell expands the power of the Presidency at the expense of Congress in violation of the Constitution; imposes a super–majority requirement on what should be a routine vote; throws away any and all leverage Republicans have in Congress; undermines House Republican efforts to cut spending; and lets Obama and the Democrats continue the spending behavior the voters repudiated in the last election.
It’s pathetic, ineffectual posturing that insults conservative and independent voters and undermines the cause of debt and spending reduction, all in one neat package.
No wonder Nancy Pelosi likes it and Harry Reid (D – Can I supersize that spending for you?) wants to ratify the McConnell surrender.

To continue my Alamo metaphor, it’s time to draw the line in the sand. If it takes a temporary government shutdown to get the attention of Obama and the Democrats, then — Shut. It. Down.

Why continue the suspense? I believe conservatives and independents can win this fight for our country’s future. And if that’s wrong, and if the role of conservatives in the future is to manage the decline, instead of reverse it, let’s find out now and not put it off until November 2012.

Michael R. Shannon
MANDATE: Message, Media & Public Relations
703-583-6277
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http://www.linkedin.com/in/michaelrshannon
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WesternFront America