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Great America

2009 Stimulus Was an Ineffective Tidal Wave of Nothing

When the government uses stimulus money to buy or build something it actually needs, it creates meaningful jobs and grows viable companies. Handouts, in contrast, increase dependency and slow economic recovery. Let’s not repeat our mistakes.

The White House has now proposed a massive $850 billion stimulus package. This money should not be wasted on special interests or unrelated social priorities.

In 2009, Congress passed the American Recovery and Reinvestment Act. The law called for approximately $550 billion in new spending. The money included an additional $144 billion in transfer payments to state governments to temporarily shore up potential shortfalls in public employee salaries and pensions. Another $86.8 billion was given to Medicaid. And $25.8 billion went to subsidize health care premiums for the unemployed.

Under the category of “education,” $53 billion went to prevent layoffs or salary reductions for teachers. $15.6 billion increased the size of Pell Grants. Some $13 billion was allocated, vaguely, to low-income public school children. And another $40 billion extended unemployment benefits and increased the amount received by $25 per week. In addition, $19.9 billion went to the Supplemental Nutrition Assistance Program (a.k.a. food stamps) and $14.2 billion was given as a bonus to people already receiving Social Security payments.

How much is $550 billion? Let’s consider some things that could be done with that much money.

The George H. W. Bush (“the Bush”), a Nimitz-class supercarrier, cost $6.2 billion to construct. It stretches 1,092 feet, can speed through the waves at 30 knots, and can operate 20 years without refueling her two nuclear reactors. The ship bristles with missiles and can hold up to 90 fixed-wing and helicopter flying craft. It has electronic warfare capability, sensor and processing systems, and makes a home for more than 3,000 sailors and airmen. The Bush is in the same class as the Nimitz, which was commissioned in 1975. The Nimitz is still in service. One can reasonably expect the taxpayers will receive 40 years of use out of the Bush.

In 2008, the European Organization for Nuclear Research (CERN) successfully fired the first protons in the Large Hadron Collider (LHC), the world’s largest and highest-energy particle accelerator. The facility required the excavation of 17 miles of tunnels and thousands of special magnets beneath the French and Swiss borders. It cost approximately $4.75 billion to build and it is capable of accelerating protons three meters per second slower than the speed of light. If nothing can travel faster than the speed of light, this modern marvel approaches the outer-bounds of theoretical physics and produces fantastic particle-smashing experiments that once could only be imagined. The experiments generated from this structure advanced science adding value to humankind for decades to come.

But we didn’t spend the 2008 stimulus on ships or scientific achievements. Nearly 12 years later, what do taxpayers have to show for this massive expenditure?

Unlike an aircraft carrier, a building, or a supercollider, these well-intentioned payments do not produce tangible, lasting, products. America could have built 80 aircraft carriers for the price of the stimulus. Society’s capacity to absorb well-intentioned transfer payments to the needy, elderly, poor, and unemployed is simply limitless. But our capacity to borrow or print money to pay for social benefits is not.

Years later, the vast surge in federal largess dissipated without significantly changing unemployment. Worse yet, the fiscal crisis of the states returned as soon as the stimulus ended. The poor, disabled, unemployed, and sick, remained more or less as they were without appreciable improvements in their numbers. What could we have built with that money? High-speed rail networks? A new space program? Modernization of the nuclear deterrent?

Ironically, had we demanded more value for the public for the money we spent, we also would have procured the meaningful and highly-compensated skills necessary to deliver this value. Instead, the only jobs needed to disperse the money were those of low-paid paper-pushing bureaucrats.

If you ask to see some tangible proof of the great tidal wave of stimulus money that washed ineffectually over our nation, what could you find? Nothing.

And that is all that remains of most of the $550 billion.

Building great public works is not anti-capitalist. “The third and last duty of the sovereign or commonwealth,” Adam Smith wrote, “is that of erecting and maintaining those public institutions and those public works, which, though they may be in the highest degree advantageous to a great society, are, however, of such a nature that the profit could never repay the expense to any individual or small number of individuals, and which it therefore cannot be expected that any individual or small number of individuals should erect or maintain.”

When the government uses stimulus money to buy or build something it actually needs, it creates meaningful jobs and grows viable companies. Handouts, in contrast, increase dependency and slow economic recovery.

Great America

Capitalism, Corporatism, and the Free Market

Increasingly, the intra-party debate on the Right is about who has the power to determine how we live. Individuals and families? Or corporate political interests masquerading as a free market?

The intra-party debate over economics is off and running on the Right. There is a strong temptation, however, to distill the argument into a binary framing between capitalism and some form of “anti-capitalism,” socialism, or statism. Such framing obscures the central issue.

No one on the Right rejects the free market. Or capitalism. In fact, the three individuals largely responsible for provoking this debate—Oren Cass, whose new project American Compass seeks to “restore an economic orthodoxy that emphasizes the importance of family, community, and industry to the nation’s liberty and prosperity,” and Senators Marco Rubio (R-Fla.) and Josh Hawley (R-Mo.), both of whom raise social criticisms of government policies that they claim prioritize corporate profits over the needs and humanity of the individual, their families, and communities—have all taken pains to emphasize that capitalism is essential to achieving the American dream. They just think the American dream has more inputs to it than a surging stock market.

In fact, the robust debate taking place on the Right is not at all a question of whether we should embrace capitalism or socialism. That’s settled in favor of capitalism. It’s about how the free market economy can best contribute to individual liberty and human flourishing.

But to have this conversation, we’d better acknowledge that our free-market economy, to a great extent, reflects the choices of policymakers.

There’s a peculiar tic on some parts of the Right that encourages people to treat the free market as if it has arisen spontaneously and exists separate and apart from any government action or policy. They decry any step by the government, even those taken to sustain the free market, with exaggerated terms like statism, protectionism, or even outright socialism. (Take your pick.)

But this viewpoint—that the government should not act—fails to align with the reality of our economy, in which the government acts constantly.

For example, our so-called “free trade” policy, in fact, is a jumbled mess of government interventions and choices made by policymakers over the years to favor powerful interests. President Trump has been criticized for using tariffs to bring China to the trade negotiating table. These tactics temporarily will disadvantage American corporations that manufacture their cheap products in China, and thus some have decried them as violating free-market principles.

The president’s ultimate and oft-stated goal, however, is to force the Chinese to open up their market and provide a fairer playing field for American manufactured goods. Adam Smith, in his free-market classic, An Inquiry into the Nature and Causes of the Wealth of Nations, addresses this:

There may be good policy in retaliations of this kind, when there is a probability that they will procure the repeal of the high duties or prohibitions complained of. The recovery of a great foreign market will generally more than compensate the transitory inconveniency of paying dearer during a short time for some sorts of goods.

It is also noteworthy that Smith goes on to address who should be making these choices—the legislative or executive power:

To judge whether such retaliations are likely to produce such an effect, does not, perhaps, belong so much to the science of a legislator, whose deliberations ought to be governed by general principles which are always the same, as to the skill of that insidious and crafty animal, vulgarly called a statesman or politician, whose councils are directed by the momentary fluctuations of affairs.

Similarly, the huge tech behemoths—Facebook, Google, and Twitter—only exist because of a special government protection given to them by Congress in 1996. Few industries in America have it quite so good.

But some conservatives defend tech’s special government protection, arguing that tech cannot exist without it, and that reform of the policy constitutes “government coercion” (the glaring contradiction in this argument—that it’s anti-free market or coercive to change the policy governing an industry whose growth was empowered by said policy—gets ignored).

Insofar as Facebook, Google, Twitter, and YouTube allow users to post their own ideas largely free from interference, this argument has some merit, and therefore they arguably should not be held responsible for material posted on their sites by users. The  argument breaks down, however, when they begin censoring conservative voices, banning and shadowbanning viewpoints, politicians, and thought leaders.

In 1984, the government stepped in to break up the telephone giant AT&T, which government policies helped create. But AT&T’s 60-year streak of near-total dominance was stifling innovation in the telecom industry. In 1996 (within the same bill that created Big Tech’s special privileges) Congress again intervened in the market to force phone companies to open up their lines to competitors. These interventions by the federal government arguably acted to enhance the free market, and spurred critical innovation in the Internet and wireless marketplaces.

The point here is not to suggest that the heavy hand of government is a good problem solver or that we need more of it. There are thousands of examples to the contrary, and I firmly believe the opposite. Rather, it’s to point out that the “free market” is not some existential, a priori creation, somehow untouched and unsullied by government policy.

Our free market is a function of our own design. It does what our government policy encourages it to do.

Not everyone questioning these priorities is questioning the inherent worth of the free market, or of capitalism, and suggestions that assume this are rather blatant mischaracterizations. Instead, people are taking issue with the parameters and interventions that policymakers themselves have set.

Corporatism Is Not A Free Market

And, to that end, conservatives like Hawley and Rubio are calling into question policies that may have become inimical to individual liberty and human flourishing—in particular that, for the last 50 years, the American economy has been designed to ensure that large corporations get larger.

This has been the bipartisan policy consensus for so long that corporatism—the policy choice to prioritize corporations and their profits—is now conflated by some with the free market. It’s become accepted orthodoxy that excessive policy deference to corporate behemoths is somehow the definition of “free.”

If the goal of a free market is to ensure personal and economic liberty, it is time to reassess the deference our policies give to corporations. Major banks, many of which exist because of the 2008 taxpayer bailout, and flourish thanks to government regulations and tax breaks, are now refusing to lend to firearm manufacturers or to finance gun purchases. Six major banks will no longer provide depository services for small businesses that work with Immigrations and Customs Enforcement.

Microsoft, Yahoo, Google, Facebook, YouTube, Apple, and Dropbox, all of which are the beneficiaries of favorable government policies, willingly gave the National Security Agency and the Federal Bureau of Investigation access to users’ audio, video, photos, and documents as part of secret spy programs.

Google, in particular, helped the Chinese government censor and spy on its own citizens, and still facilitates the purchase of apps used by the Chinese government to suppress its Muslim minorities. So does Apple.

Why should those who cherish liberty have to choose between being ruled by a tyrannical government or a tyrannical mega-corporation?

National Review founding editor William F. Buckley, Jr., rejected this premise when he proclaimed he would “not willingly cede more power to anyone, not to the state, not to General Motors . . . I will hoard my power like a miser, resisting every effort to drain it away from me.”

Increasingly, that is what the intra-party debate on the Right is about: who, ultimately, has the power to determine how we live? Individuals and families? Or corporate political interests masquerading as a free market?

A truly free market would be one that removes the special interest credits, the loopholes, the incentives, the corporate protections. But that is not the market we have, so instead, our free-market discussion actually distills down to one of trade-offs and prioritization.

A more honest discussion would be built around the truths and nuances of that idea. One that seeks to cast the debate as merely a binary choice between capitalism or socialism obscures the essential question: if the goal of a free market is to induce individual liberty and human flourishing, how shall we proceed?

Great America

The Coming Coronavirus Stagflation

As you find yourself buying bulk rice and toilet paper to prepare for the effect of coronavirus, let me offer one piece of advice: I can’t tell you whether gold or real estate will be sound investments. But there’s one can’t-miss place for your money: pay off your credit cards.

How should you position yourself to prepare for the coming financial upheaval that may result from the coronavirus? The coronavirus already has caused a supply shock that we have yet fully to comprehend. We can’t look into the future but we can look at the past. One possible way the interruption of Chinese manufactured goods will affect the economy is the way the oil shock of the 1970s did.

Back in the 1970s, all of the really smart economists used to describe the economy like a dial on a stereo that allowed you to adjust the balance between bass and treble. Economists believed one could achieve a perfect balance between inflation and unemployment by fiddling with the money supply until striking the magic combination of the two. Economists tend to favor central planning and technocratic approaches to economics because, let’s be honest, nobody pays an economist to advise governments to do nothing.

But in the 1970s, something happened to upend this theory: Inflation and unemployment took off at the same time. The Federal Reserve continued fiddling with the dials but unemployment and inflation both got worse anyway. Why?

In theory, the presence of easy money in an economy encourages hiring more workers to accommodate business expansion. Scarce money makes high prices unsustainable at the cost of higher unemployment. Lower interest rates mean more money gushing through the economy but higher prices. Higher interest rates mean lower prices but higher unemployment. The trade-off is quite intuitive—until it isn’t.

In 2018, China accounted for 28 percent of global manufacturing output. That number understates China’s importance because China specializes in mid to low-cost manufacturing. For another basis of comparison, China’s share of the world’s manufacturing accounts for more than its next two competitors combined, the United States at 16.6 percent and Japan at 7.2 percent.

There just isn’t enough manufacturing capacity outside of China to make up for a loss in Chinese goods on a short-term basis. As noted by the Wall Street Journal, the epidemic, “has paralyzed large swaths of the country and led many businesses to remain shut for weeks.” It further noted, “In a survey of 7,000 Chinese exporters released last week by China’s Ministry of Commerce, 90 percent reported shipping difficulties and canceled orders caused by delayed deliveries and factory shutdowns.” Worse yet, the “likelihood of a quick V-shaped recovery in the coming months is falling fast.” So what has any of this got to do with the 1970s?

In the 1970s, when the oil shock touched off stagflation, oil accounted for a paltry 5 percent of GDP. Energy has generally been excluded from inflation calculations because of its volatile nature. But energy nevertheless affected other prices as an input into almost everything.

Compare and contrast that to what China makes and its important role in the consumer price index. The cost of items like televisions, appliances, furniture, and other manufactured goods has gone down and down for decades thanks to China’s aggressive mercantilist approach which calls for underbidding competitors to gain market share advantages. The supply interruption of even a couple of months will cause shortages or price increases in items that have a significant effect on the formula for calculating inflation.

Like oil, Chinese goods go into everything. Many of those tiny little plastic parts that go into cars, toilets, and furniture are manufactured only in China. Our own automobile manufacturing soon could be impacted by an interruption of all those inexpensive little gadgets that go into cars.

Once inflation resulting from shortages is confirmed, the Federal Reserve dutifully will adjust interest rates to slow price increases. But these price increases will not be the result of overheated demand.

The coronavirus price increase, like the oil shock price spikes, will be the result of fewer goods being bid upon by the same money. Inflation will also make it relatively more expensive to hold cash as a store of value. To balance risk, investors will start shifting out of cash into non-cash assets. Cash will become almost toxic as inflation continues to rise. The Federal Reserve will raise interest rates even more, hoping to get in front of the panic.

We can remember that inflation at the end of 1979 reached an eye-popping 11.3 percent. The next year, it increased even more, to a banana republic level of 13.5 percent. In 1981, inflation declined slightly but remained very high at 10.3 percent. The year-to-year numbers might be scary but even more scary was the cumulative compound-interest effect of four years of high inflation. To combat this inflation, the Federal Reserve raised interest rates to a whopping 19.04 percent at its peak in June 1981. That resulted in the recession and high unemployment of the early 1980s.

At the beginning of the 2008 financial crisis, the M2 money supply was around $8 trillion. Today it is not quite double that amount at around $15 trillion. The GDP in 2008 was around $15 trillion. Today, it’s not quite $22 trillion. Thus, since 2008, the money supply has gone up almost twice as fast as the GDP. A lot of people feel secure holding cash as a hedge against uncertainty. That money isn’t circulating and driving up prices. If that confidence ever cracks, there’s a tidal wave of dollars waiting to come flooding back into the market.

Printing more dollars cannot make televisions magically appear to offset closed factories in China. Televisions and everything else made in China will become harder to get and more expensive. It’s just math.

As you find yourself buying bulk rice and toilet paper to prepare for the effect of coronavirus, let me offer one piece of advice: I can’t tell you whether gold or real estate will be sound investments. But there’s one can’t-miss place for your money: pay off your credit cards.

The interest rate is only going to get higher as the uncertainty unfolds. If I’m wrong, you can always run your balances back up again when the crisis abates. If you’re lending money, now might be a bad time to lock in a loan at a low, fixed-rate. These disruptions also tend to reveal too-good-to-be-true schemes for the frauds they are. Enron and Bernie Madoff, for example, were discovered as investors needed to withdraw cash out of their paper bonanzas. Now would be an excellent time to get out of that sketchy investment opportunity that seems to be defying gravity.

Oh, and wash your hands.

Greatness Agenda

Four Aces of Trump’s New Deal for Americans

Tax reform, trade reform, regulatory reform, and energy reform offer winning hand for all Americans.

President Trump’s populist economic program continues to stump the band of economists who pass themselves off as experts.

Remember Harry Truman’s definition of an expert: “a fella who was afraid to learn anything new because then he wouldn’t be an expert anymore.” President Trump’s booming economy in 2019 proved Truman’s dictum in spades.

Like Pharaoh’s priests, the experts refuse to learn anything new. But President Trump’s tetrad of populist economic nationalism has proven superior to the court magicians of the economic pharaohs.

The Trump four-fold formula, conceived in the campaign and delivered as promised in his administration, combines tax reform, trade reform, regulatory reform, and energy reform to supercharge national economic growth.

Its power comes from the combination of the four elements: together, the whole is greater than the sum of the parts.

Together, they work synergistically to make the United States the best place on earth to invest and do business—and to live, work, and raise a family.

And that is exactly what we’re seeing. While the economies of Germany and China stagnate, while economic riots grip France, Colombia, Chile, Tehran, Beirut, and Baghdad, the American economy goes from strength to strength.

Unemployment is at a 50-year low, the latest jobs report blew the doors off, the stock market hit record highs, and so did holiday sales.

Democrats tell us the Trump economic program would only benefit the rich and superrich. But the data proved them wrong.

Wages for everyone are rising, and workers at the bottom end of the pay scale are seeing bigger gains than those at the top.

Despite predictions “those jobs are never coming back,” America added over a half million manufacturing jobs since President Trump was sworn in, including some 76,000 factory jobs in 2019 alone.

Tax Reform Was the Spark

How did the four-fold formula produce this economic miracle?

America had one of the highest corporate tax rates in the industrialized world. Essentially, we were penalizing businesses for investing here.

The Tax Cut and Jobs Act changed all that. Rates that were once the highest are now the lowest, and companies that had been fleeing our shores are moving back.

President Trump’s trade reform adds incentives to invest in America. He recognized that Communist China and other countries use predatory trade practices including export subsidies, currency manipulation, wage suppression, and government-engineered theft of trade secrets to drive American businesses into bankruptcy.

Previous administrations placed their faith in failed utopian economic theories and failed international institutions such as the World Trade Organization.

President Trump unilaterally imposed tariffs on wrongdoers rather than waiting for the gutless bureaucrats in Geneva who the record shows could be counted on to do too little, too late.

Of course, the high priests of Davos went into full freakout mode over the tariffs. They predicted inflation would ravage the land like a California wildfire.

But again, the data proved them wrong. Consumer and producer prices remained flat. That’s not what the experts were taught was supposed to happen, so they couldn’t see it even as it was happening.

The Experts Were Proved Wrong Again on Trade

The experts also told us no trading partner would tolerate an America First trade policy. They were used to giving away the store to buy America’s “friends” around the world. We were told Communist China would become a freedom-loving ally of the United States if we gave them our capital, our technology, and our jobs. They were disastrously wrong.

President Trump leveraged America’s consumer market, the largest in the world, for better deals. Threatened with punishing tariffs, Mexico not only sealed its border to stop illegal immigrants, it signed a new trade deal, USMCA promised to replace the disastrous North American Free Trade Agreement, NAFTA. Another campaign promise fulfilled.

Red China came to the negotiating table, South Korea renegotiated its trade agreement with the United States and Great Britain is eager to strike a deal with us.

President Trump also took a machete to the kudzu springing up from the administrative state.

He promised to scrap two regulations for each new one issued. But he exceeded even his own goals, achieving a 22-to-1 reduction.

The Competitive Enterprise Institute found the Federal Register, the bureaucracy’s bible of government rules, has shrunk by a third under President Trump. It took President Reagan years to reach that benchmark.

To understand the impact of deregulation on business activity, consider the American Action Forum tallied $560 million in savings from regulatory cuts in just the first eight months of the Trump administration.

Businesses held their breath—and their cash—in anticipation of another costly regulatory assault from Obama bureaucrats. Now they can finally exhale, and that breathed new life into the economy.

The final element in the four-fold formula for revitalizing America is energy reform, and it is intrinsically linked to the other elements.

Energy reform recognizes that America’s vast energy reserves give us an advantage over global competitors.

The price of natural gas in America is a fraction of what it costs in Asia. Cheap abundant energy—essential for an industrial economy—offsets the cheap labor of East Asia.

So there you have the four aces—tax reform, trade reform, regulatory reform and energy reform—a new deal and a winning hand for all Americans.

Given a choice between placing their money in the clutches of confiscatory regimes abroad and facing punitive tariffs on one hand, or investing in a robust continent-wide consumer market with low taxes and respect for property rights on the other, investors are placing their bets on America first.

Here’s a prediction: President Trump’s populist economics will continue to prove the experts wrong in 2020.

Happy New Year!

Elections

The Democrats’ ‘Green Collar’ Code

America’s blue-collar workers know that today, when the Democrats talk about “green collar jobs,” they’re telling blue-collar workers to “learn to code.” And their response needs no translation.

In response to the regressive Left, let’s take a timely trek down the memory hole to note a rather important missing piece of their public policy puzzle which, as is their wont, they’ve proven unable to find. (Of course, I am in no way implying they’re trying.)

Back in the summer of 2008, I took to the House floor to give a short speech on “How to Speak Democrat.” In my remarks, referring to the nebulous and bogus economic claims of environmental radicals, I made a simple and patently true point:

Green collar jobs translates into unemployment. “Democrats will replace your blue collar jobs with green collar jobs.” [This] translates into “Democrats will replace your blue collar jobs with unemployment.”

The Left’s vehement reaction to my speech was not matched by an equivalent effort to refute my argument, but instead by an effort to try and make me rue my existence. After all, given the elitist media’s aiding and abetting of their narrative, why bother to actually address the issue of blue collar jobs? If the media could not address that question for my sake, then how about for the sakes of the blue collar voters the Democrats allege to champion?

As the Epoch Times’ Zachary Stieber reports, the recent Democratic presidential primary debate held at Loyola Marymount University in Los Angeles proves the Democrats remain blithely content not to champion, but to sacrifice blue-collar workers to slake the apocalyptic whims of the climate cult.

Thankfully, moderator Tim Alberta, Politico’s chief political correspondent who also grew up in Michigan, didn’t get the long-standing elitist media memo informing them that inquiring about the fate of blue collar workers is passé:

Alberta: As president, would you be willing to sacrifice some of that growth even though it could potentially displace thousands, maybe hundreds of thousands of blue-collar workers in the interest of transitioning to that greener economy?

Biden: The answer’s yes. Because the opportunity, the opportunity for those workers is to transition to high-paying jobs, as Tom [Steyer] said, is real.

Gee, if that doesn’t alleviate blue-collar workers’ angst about Democrats and the climate cult coming for their jobs, they can go ask billionaire ex-hedge fund manager Steyer about the fate of their humble, hardworking, heartfelt American dreams. So, what does Steyer have to say to them?

A chimeric tissue of talking points that will serve as their futures’ epitaph: “Not only can we clean up the air and water in our black and brown communities where our pollution is concentrated, this is also the opportunity to create literally millions of middle-class, union jobs—well paid—across the United States of America. Our biggest crisis is our biggest opportunity.”

Hey, and the hits keep on comin’. On his first day in office, Steyer vows to declare a state of emergency due to climate change. (His second emergency declaration will address the economic depression he caused with his first.)

How reassuring for blue collar workers to know Steyer from Day One will start putting them into the unemployment line. One must wonder if Biden, Steyer and their Democratic cohorts realize how being forced into unemployment is the biggest crisis blue collar workers—hell, any person—faces; and that Democratic promises and talking points don’t put food on the table. Or maybe the Democrats do realize it, but just don’t give a damn. If little else, the 2016 presidential election told them that blue collar voters who love their country, work their asses off, and get called deplorable, polluters, and worse have already exited the Democratic Party in droves and will continue to do so long as the Left continues to sacrifice them upon the pyre of the climate cult’s approval.

But wait, for blue collar workers there’s more of this less. Feel the Bern!

Once more, per the Epoch Times:

Sen. Bernie Sanders (I-Vt.), speaking right after Biden, said that the issue wasn’t relocating people in towns. “The issue now is whether we save the planet for our children and our grandchildren.” He said that the United States should declare a national emergency for climate change and “lead the world” in the arena, taking funds from the military and using that money to “fight climate change.”

Yes, why wouldn’t blue-collar workers—many of whom actually make armaments to defend American’s liberty (“Arsenal of Democracy,” Bernie)—want to lose their jobs and, ultimately, their liberty, so a doddering socialist can indulge his cosmopolitan fetish for foreign laurels? The only practical-minded people who would buy into this insanity are all the wrong people—the People’s Liberation Army, the Islamic Revolutionary Guard, et al.

Contrarily, America’s practical-minded blue-collar workers can smell this leftist B.S. a mile away when it wafts in from the coasts. They know that today, when the Democrats talk about “green-collar jobs,” they’re telling blue-collar workers to “learn to code.”

America’s blue-collar workers’ response needs no translation.

Elections

The Crackers and Frackers Could Hold the Keys to 2020

MONACA, Pennsylvania—All Darrin Kelly wanted for the energy workers in Western Pennsylvania was that the Democratic presidential hopefuls would talk to them before going to war against shale.

That opportunity slipped away last Friday when Elizabeth Warren joined Bernie Sanders in calling for a total fracking ban.

“On my first day as president, I will sign an executive order that puts a total moratorium on all new fossil fuel leases for drilling offshore and on public lands. And I will ban fracking—everywhere,” Warren tweeted.

“It is disappointing that any national candidate would not come in here and want to talk to the men and women of this area first before unilaterally making that decision,” said Kelly, a charismatic

Pittsburgh firefighter who is also the head of the powerful and influential Allegheny Fayette Labor Council, which represents workers stretching from Pittsburgh to the borders of Maryland and West Virginia.

The rest of the Democratic hopefuls will follow suit, with the possible exceptions of Joe Biden and Ohio Rep. Tim Ryan. At least, that’s the prediction of Keystone College political science professor Jeff Brauer.

“The natural gas industry employs well over 40,000 people just in this region alone,” Kelly said. “Countless more indirectly, providing economic opportunity for generations of families and communities that had been hollowed out by the demise of manufacturing and coal in this area.”

Donald Trump won Pennsylvania with just over 40,000 votes in 2016.

Kelly doesn’t think he is entitled to the presidential candidates’ time. He just knows what happens when the energy labor force in Western Pennsylvania isn’t behind the Democratic nominee.
“You cannot win the presidency if you are a Democrat without Pennsylvania,” Brauer reminds bluntly.

Democrats have won Pennsylvania in past presidential years because of outsized margins in Philadelphia, Pittsburgh and their suburbs. That support has been declining since Bill Clinton won 28 of the state’s 67 counties in 1996.

Barack Obama won 13 of the 67 counties in 2012.

Trump’s magic came in rural and post-industrial counties such as Luzerne and Erie, but most importantly in the populous counties around Pittsburgh, where shale is king and fracking is seen as the second coming of the steel industry.

They may look like ordinary construction cranes to someone unfamiliar with the history of this region. But if you’re from here, they look like something different. Building the ethane cracker plant, each of these cranes looks like a new colossus rising from the ashes of yesterday’s despair.

Building the plant has brought in 6,000 good-paying jobs, with more to come. Ultimately, there will be 600 permanent jobs at the plant, with industry analysts predicting triple that amount in supporting industries.

Jobs postings are everywhere touting opportunities, no matter the skill level—high school education, trade school certificate, chemists, engineers, information technology, labor. If you reliably turn up for work, there is likely a career for you in the oil and gas industry.

“And if you think our workers don’t care for the environment or climate change you are wrong,” said Kelly. “They are the ones not only working in the industry, but they live here, play here, raise their kids here, hunt, fish, boat, ski, swim, and hike. They want to be in a responsible industry,” he said.

The high tides of the frackers and crackers will be offset by the sinking tide of the broader U.S. economy, experts predict. “We’re going to probably enter at least a little bit of an economic downturn,” Brauer warns, “which is the natural part of the cycle. And it’s probably not going to be the greatest timing for President Trump since that’s his strength.”

“But if the Democrats continue to make these arguments and push these issues which are going to hurt the economy and these key states, then it plays right into Trump’s narrative,” he adds with a twist.

Brauer suggested Trump could easily argue: “This is part of the cycle and what’s going to happen, but would you rather have me, who’s going to have less regulations and not wipe out entire industries and try to build back the manufacturing base and try to get jobs to come back in the United States, or you have a Democrat who is so far to the Left, who’s willing to get rid of entire industries because of some environmental concerns that can be addressed, without destroying the whole industry?”

That’s not a tough question for most Western Pennsylvanians. But it poses a tough question for Biden and the other 2020 Democrats.

COPYRIGHT 2019 CREATORS.COM

Great America

The Magical Mr. Price

Love him or hate him, his work is indispensable.

Have you heard about the nationwide teacher shortage? Or the construction trade labor shortage? Or the current avocado shortage vexing millennial hipsters? We wring our hands trying to imagine a solution for these gaps in the otherwise seamlessly supplied market of everything we need.

To fix these and so many other problems, Americans increasingly turn for help to the most powerful person in the world. Who is the most powerful person in the world? Well, he’s not really a person but his name is Mr. Price.

Mr. Price works behind the scenes. Nobody has actually met him. He can take all the information in the world about something and convert it into one number.

If there’s a crop failure and people can’t find food, Mr. Price will find a way to get food to them. He can tell you if something is rare. He can tell you if something is inefficient. He sets your salary. He determines how much you have to pay for gas.

A copper mine in Chile can produce copper without having any idea who it’s going to sell it to. Mr. Price can efficiently get that copper to China to make Christmas lights, an art foundry in Colorado to make bronze, and a construction site to be used for plumbing. He quickly distributes food that’s perishable before it can spoil. He can make some pigmented oil and canvas into a multi-million-dollar asset. He can take a delicate orchid harvested in Florida on Tuesday and put it in the hands of a bride in Los Angeles on Wednesday.

He makes salmon caught in Alaska appear at a Costco in Kansas City the next day.

We all agreed energy prices were becoming insane a few years ago. So Mr. Price created fracking and horizontal drilling which toppled the $100 per barrel oil cartel. Now the Saudis are (gasp!) borrowing money to keep all of their little projects going.

A Builder and a Destroyer in One

You can love Mr. Price. You can hate Mr. Price. I hear people complain endlessly about Mr. Price’s decisions. Teachers aren’t paid enough. It costs too much to live in New York. Why does it cost so much to get my car fixed?

People have tried to overrule Mr. Price’s decisions. He doesn’t take it personally. In the 1970s, America passed laws against Mr. Price’s decisions on gas. But then something terrible happened. More people wanted to buy gas. Fewer people wanted to sell gas. Lines formed. Stations ran out of gas.

A few years ago, a pharmaceutical company named Turing raised the price of Daraprim from $13.50 a tablet to $750. People screamed for government action. Mr. Price took notice of this turmoil. He recruited another pharmaceutical company to do something about it and within a month it was announced that Daraprim would be offered at $1 per pill.

Mr. Price does not allow ridiculous prices to persist for too long. He looks for lower-cost alternatives and this time he did it faster than the politicians could clear their throats to begin screaming for government intervention.

Mr. Price can also be vengeful. When a company finds a way to exploit its customers, it’s usually because some consumer regulation sets up huge barriers to competition. But Mr. Price often finds a way around that.

Protected by the government for years from any serious competition for local calls, telephone companies eventually fell like a house of cards. Mr. Price invented telephone over internet. At first it was offered as a gimmick, but major companies and individual consumers alike took notice of the substantial savings. I don’t know anyone who gets telephone over a telephone line now. I wonder if any calls still pass under the birds perched on the old telephone lines.

Mr. Price destroyed Blockbuster Video. He’s currently dismantling the taxi and limo industry using Uber and Lyft. Mr. Price says that an enterprising teenager can make $500 in a weekend cutting lawns. Because of Mr. Price, delicacies from the far corners of the world are always on demand. Hotels, flights, cars, food, and clothes all increasingly have become commodities available to almost everyone. Things that take an impossibly long time to plan, organize, ship, fabricate, and design are now just a click away.

Mr. Price conducts an intricate orchestra with billions of moving parts. He feeds the hungry. He employees the unemployed. If you let him do his work, he will enrich only those who find a way to do what they do better, faster, cheaper. Mr. Price hates waste. And when a company doesn’t efficiently employ its workers or wastes resources, Mr. Price looks for a way to do better.

We Mess with Mr. Price at Our Peril

We all agreed energy prices were becoming insane a few years ago. So Mr. Price created fracking and horizontal drilling which toppled the $100 per barrel oil cartel. Now the Saudis are (gasp!) borrowing money to keep all of their little projects going.

And Venezuela, the country that invented an alternative to capitalism has again proven Margaret Thatcher’s timeless quip that socialism only works until you run out of other people’s money. In Venezuela, the government passed a law against Mr. Price’s decisions on food. If stores can’t make a profit on food, starvation is the inevitable result.

Empty grocery stores, unemployed workers, lines at gas stations—these are all indications that Mr. Price is being prevented from doing his work. Taxes, subsidies, regulation or all three usually are at the root of our economic problems.

If an imbalance between supply and demand cannot be resolved by Mr. Price, then somebody is almost always interfering with his important work—even if the “how” is not always obvious.

There is no teacher shortage. The good economy has finally made it possible for teachers to demand higher wages. Teachers, nurses, the construction trades can now command higher wages. Mr. Price says it’s time to give them a raise. When we do, the “shortages” will disappear.