American Elephants

The Obama Administration Understanding of “Full Employment” by The Elephant's Child

It is interesting to contemplate the policies that seem to flow from President Obama’s understanding of the concept of employment.  Right now, the number one concern of the American people is jobs and employment.

Last week President Obama said that “EPA regulations create jobs,”astounding businessmen across the country.  He also said that unemployment benefits create jobs, and that temporarily allowing working people to keep a portion of the FICA contribution on their paycheck — which adds up to maybe $1.000 a year (on which they have to pay taxes)  will also create jobs.

This convoluted FICA relief, he refers to as the Payroll tax. It is not, however, a tax. Democrats from FDR on down have insisted that it is a contribution that goes into the Social Security Trust Fund (a bookkeeping entry which immediately goes out again as some senior’s Social Security check). Social Security is already operating in the red, as current contributions don’t cover all the social security checks that have to go out. So, I assume, we’re borrowing from China to make up the balance. And that’s why it is so impossible to get a straight answer from government.

The government does not create jobs. Yes, a lot of people are employed by the government, but you and I pay their paychecks and their benefits. Jobs out in the private sector mean that something new is created that somebody else is willing to pay for, and the economy grows. A farmer grows a head of lettuce, a trucker takes it to market, a cook buys it to create a salad, and someone hungry buys a meal.

Over at PJ Media, Zombie has a different take on the president’s economics “The Leaf-Blower Paradox and the Fundamental Fallacy of Obamanomics” which is a delightful essay on how Obamanomics works. To translate briefly, there’s no hope! We simply have to add Obama to the rolls of the unemployed.

Obama Rejects 20,000 Pipeline Jobs to Appease Radical Green Base by The Elephant's Child

President Obama today rejected the Keystone XL pipeline.  I guess Valerie Jarrett didn’t approve. The president said he was not acting on the merits of TransCanada Corp.’s proposal, but instead was forced to make the decision based on the “arbitrary” deadline mandated by GOP provisions in December’s payroll tax cut extension deal.  Snort!

The “arbitrary” deadline was February 21. I guess he thinks that this will stop the discussion of the huge numbers of jobs promised by TransCanada’s proposal (the environmentalists have already cost lost jobs as manufacturers of pipeline materials have laid off workers).

“As the State Department made clear last month, the rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment,” Obama said in a prepared statement.

“As a result, the Secretary of State has recommended that the application be denied. And after reviewing the State Department’s report, I agree,” Obama added.

So you see, the decision isn’t really Obama’s fault — blame Hillary. “Health and safety of the American people” indeed. Codswallop. The XL pipeline had already been vetted by every applicable federal agency, and the State Department was all set to sign off on it, until Obama was, I assume, threatened by Big Green.  The environmental organizations play hardball. The president of the Energy Policy Research Foundation wrote in December:

For Canadians, it was unthinkable that a U.S. president would pull the plug after extensive reviews and 57 project-specific requirements exceeding all U.S. pipeline safety standards, including satellite-linked, computerized leak-detection systems and puncture-resistant steel pipe. Even one of TransCanada’s competitors, Enbridge, which ships Canadian crude through existing cross-border pipelines, supported the Keystone permit: Any interruption in the historic bilateral energy trade relationship was a more serious threat to its business than crude shipments by competitors.

The decision to delay the project is such a shift in expectations on the future of U.S.-Canadian energy trade that perhaps the only surprising outcome is that Prime Minister Stephen Harper has not recalled his ambassador. He did announce that shipping the crude to Asia will now receive the highest priority.

Obama used to be very enthusiastic about “shovel-ready” jobs, until he found they weren’t shovel-ready, long after he’d distributed the funding. Keystone XL is shovel-ready. The picture above is of the Keystone pipeline which is currently flowing along happily through the United States.  The XL is simply an extension.  Again, from The Wall Street Journal:

In April 2010 and again this August, State produced multivolume environmental impact statements that concluded the pipeline would have “no significant impacts” on the environment. That should have ended the matter.

But the President’s environmentalist friends have decided to make Keystone a test of his green virtue. “We’ll see if [Mr. Obama] is an oil guy or a people guy,” eco-agitator Bill McKibben recently warned at an Occupy Wall Street event, and the Sierra Club has threatened that it won’t “mobilize the environmental base” in 2012 if he approves the project. Various Hollywood worthies have marched in front of the White House in protest.

More interesting details: “President Obama’s jobs council called on Tuesday for an “all-in-approach” to energy policy that includes expand oil-and-gas drilling as well as expediting energy projects like pipeline.”

“[W]e should allow more access to oil, natural gas and coal opportunities on federal lands,” states the year-end report released Tuesday by the President’s Council on Jobs and Competitiveness.

The report does not specifically mention the Keystone XL oil pipeline, but it endorses moving forward quickly with projects that “deliver electricity and fuel,” including pipelines.

“The Council recognizes the important safety and environmental concerns surrounding these types of projects, but now more than ever, the jobs and economic and energy security benefits of these energy projects require us to tackle the issues head-on and to expeditiously, though cautiously, move forward on projects that can support hundreds of thousands of jobs,” the report says.

President Obama has an odd mindset, which is echoed by Democrats like Nancy Pelosi. He was absolutely set on the payroll tax cut, which would put about $1000 a year into working people’s pay, by diverting that amount from their contributions to Social Security, putting the fund deeper in the hole.

The president believes that the payroll tax cut “will spur spending. It will spur hiring.” This is derived from Keynesian economics. Democrats believe that government money inserted into the economy by citizen spending will have a “multiplier effect” that will somehow create jobs. This was what was expected from the stimulus, from the “Cash for Clunkers” and all the other billions of taxpayer money that accomplished nothing.  If there is a “multiplier effect,” it isn’t much, and it clearly does not create jobs. But Obama’s ideas are set in concrete.

Environmentalists have tried to pooh-pooh the employment claims by pipeline proponents, but TransCanada spelled out just how many, and exactly what positions would open for each section of the 1,700 mile pipeline.  And the pipeline does have a “multiplier effect.” The construction jobs are, by the nature of construction, temporary, but new workers in a region means new business for all local concerns, for truckers bringing materials, for restaurants. Educated guesses put that number at 250,000 jobs.

Obama’s decision is clearly not based on “the health and safety of the American people.” The EPA tries to get away with that one too, and it doesn’t work. The decision is pure politics. Obama is more scared of losing Big Green than he is of losing Big Labor.  He thinks his extension of the Payroll tax cut will create enough jobs to get him off the hook with the unemployed, and he needs that Big Green funding because the donations aren’t coming in as well as forecast.

The Keystone XL pipeline requires no new technology or research, no taxpayer funds, while generating new tax revenue, all with virtually no financial or environmental risk. There is nothing new about pipelines. We have over 2.3 million miles of pipelines, including about 55,000 miles of crude oil trunk lines. They are the safest mode of transporting the lifeblood of the nation.  Trains can derail, trucks can crash, tankers can rupture, sink, or run aground. The Keystone XL would allow us to reduce oil imports from Saudi Arabia, Iraq and Kuwait by 25% or more.

Obama once said “This is our moment. This is our time — to put our people back to work and open doors of opportunity for our kids; to restore prosperity.. ” Political hooey. Just words, no commitment.

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