Chuck McConnell: Solutions needed
April 15, 2009
The economy of the U.S. obviously is in serious trouble. Without sound strategies, the crisis will tear down our standard of living and comfortable way of life. Our political leaders choose social engineering and almost totally ignore the obvious solution. They tell us that our economy miraculously will turn around by 2010. This simply is not true.
Advances in technology have facilitated highly efficient worldwide trade, capital flow and human resource exchange – economic globalization. Skilled workers in China, India, Brazil and Mexico now produce high quality, highly demanded goods and services. Workers in India are easily trainable in jobs for which Americans have until recently been considered the exclusive work force, and two-thirds of India’s population exists on less than $2 per day. America needs high-paying, non-exportable job creation right now.
The American automobile industry cannot compete in global auto production with its unrealistic legacy costs. The industry is an outdated, failed business model. The untold reality is that the pain now felt by automobile workers will spread to the majority of American households. Throuhgout time, labor-cost equilibrium, a natural process by which world labor rates will increase and American rates will decrease as developing nations enter a more realistic global economic profile, will inexorably evolve.
Faced with these dire consequences, the “economic solutions” our politicians are selling to us only exacerbate our problems. Even at currently depressed prices, home values in the U.S. still are artificially high. Billions to bailout our underwater home mortgage holders requires government borrowing, ultimately higher taxes and interest rates. This only succeeds in transferring tax money from people who made good financial decisions and pay their mortgages to those who bought overpriced homes they could not afford. Contrary to the ill-conceived Carter era Community Reinvestment Act, not everyone in America can afford a new home. And how does President Obama’s $900 million gift to Gaza and $100 billion pledge to the IMF provide progress for Americans caught in the economic morass?
Those are the problems. Our golden opportunity solution is American energy independence. Energy independence from renewable sources will give us a global competitive advantage for years to come, reduce the real risk we now face depending on crude oil from unfriendly countries and produce high paying non-exportable jobs. So far, the political solutions contain only a small fraction of what is needed for energy independence.
Why energy independence? I spent most of my career as a chemical engineer working in all phases of the petroleum industry. Petroleum is a finite resource and simply will not be available at some time in the future. We cannot stand by and watch gasoline prices accelerate back to $4 per gallon and, ultimately, much higher.
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Technology now exists in wind, solar and nuclear power generation to achieve independence from unfriendly sources within 10 years. One proof of this is T. Boon Pickens’ (a successful energy man and entrepreneur) privately financed, profit-motivated $10 billion wind project in West Texas. Politicians must immediately direct the billions now being spent on poor solutions to initiating Manhattan Project magnitude publicly financed-privately owned and operated renewable energy projects.
To reduce our energy risks surrounding imported oil throughout the interim 10 years, we must develop our huge domestic natural gas resources. Our Colorado politicians are fighting hard against natural gas drilling (even though gas drilling has virtually no negative environmental impact) and the thousands of jobs it will produce. This resistance is popular with their small liberal cohort but suicide to our economy and future.
In present leadership’s economic approach, the light at the end of the tunnel is a blown-out candle. Without nurturing entrepreneurial, free-market capitalism and rejecting the siren song of socialism, we all will see our financial way of life permanently erode at an alarming pace. We must demand our political leaders to place our precious national treasure where it will give America a global competitive edge and not simply self-serving social engineering. That is the way America has always prospered.
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