Shale gas, not government, fueling our recovery
The weekly report of actual initial unemployment insurance claims for the week ending April 27, coupled with the decrease during the previous week, showed that 298,692 claims were filed. A showing under 300,000 is consistent with a mild recovery; 250,000 would indicate a fairly strong recovery.
But the administration cannot claim credit. The boom in the natural-gas-from-shale industry, a private-sector phenomenon opposed by the administration’s Environmental Protection Agency, is responsible. Serendipity is once again saving the American people from Washington’s foolish economic policies.
The federal government has run budget deficits amounting to many trillions of dollars and the Federal Reserve has printed money like mad but it has hardly made a dent in our massive unemployment. It has been so ineffective that involuntary unemployment is still 15 percent, not the 7 percent the Department of Labor has been reporting because it does not count as unemployed people who have stopped looking for work.
The Keynesian policies pursued by the administration have been ineffective. President Obama’s 2009 $800 billion economic stimulus ran out of stimulus as soon as the spending stopped. There was no Keynesian multiplier. And the massive annual government budget deficits have had no Keynesian multiplier either.
On balance, the government’s role has been negative. It wasted trillions of dollars on foolish and unnecessary urban expenditures, keeping the unemployed where there are no jobs, subsidizing hybrid and electric autos, and heavily subsidizing inefficient wind and solar power. And the federal government’s housing and economic policies were responsible for the tech and housing bubbles, which ended in recessions in 2000 and 2008.
The invention of horizontal drilling and fracking made it possible to exploit vast new deposits of petroleum and natural gas in shale. The resulting increased output of natural gas and oil is leading our recovery from the Great Recession.
It is creating many permanent jobs not only in exploration and drilling but in transportation. Natural gas is a clean source of electricity generation and a clean fuel for powering trucks, buses and other motor vehicles. New pipelines are being developed. It is worth noting that the federal government has impeded the building of the pipeline from Canada to Texas at the instigation of its reactionary, anti-private-enterprise environmental supporters.
And the increased employment is generating an increasing demand for housing and other goods. It would be good if more of those goods were made in the U.S. We have lost millions of jobs to countries that impose barriers to our goods and subsidize exports to us, as China has been doing for nearly two decades and Japan has since World War II.
U.S. manufacturing is stagnating as a result of anti-business governmental policies. Outsourcing of factories and jobs continues. We must expand our production of petroleum and natural gas. And we must balance our international trade. It is not necessary that we devalue the dollar, which would hurt our trading partners with whom we enjoy balanced trade. Under World Trade Organization rules, we can impose single country tariffs that would reduce to zero as trade becomes balanced.
The development of our plentiful supplies of oil and gas is a good start. Let’s finish the job and put our unemployed to work.
Raymond L. Richman, professor emeritus of public and international affairs at the University of Pittsburgh, is president of Ideal Taxes Association. He lives in Shadyside.