by David Fessler, Investment U Senior Analyst
Tuesday, November 1, 2011
President Obama is great at making speeches.
You’ll get no argument from most Democrats and even some Republicans. Most of the time though, he’s talking about issues that have been problems for weeks or months.
But there’s been little in the way of action. The Administration and Washington’s Congressional cartel seems more preoccupied with finger pointing and getting re-elected than accomplishing anything of substance.
Take jobs, for instance.
In particular, the lack of new ones.
According to the Bureau of Labor Statistics’ most recent figures, there are 14 million unemployed Americans. That doesn’t include an estimated 3.5 million that are so discouraged they’ve given up looking. Our nation’s high level of unemployment is undoubtedly the most important issue facing America today.
Various solutions have been proffered. Jump-starting the housing business, massive infrastructure improvement spending and tax breaks for businesses have all been discussed as solutions.
Wanted: Jobs, Not Political Rhetoric
Lately the President is talking up his big, new plan for creating jobs. Its two major components aren’t really new at all. The extension of payroll tax cuts and unemployment benefits are popular with their respective parties.
These will provide a little relief and dance around the central problem. This country needs more people working. More people working means more tax revenue and more economic growth.
Obama’s plan, unless it was centered on building something the size of the entire interstate highway system – from scratch – will be a drop in the bucket in terms of job creation.
But if you think I’m just lambasting the President and Democrats, well… the Republicans haven’t proffered any profound new ideas, either.
Presidential candidates Rick Perry and Ron Paul are focused on Fed-bashing. It’s hard to imagine how that will create jobs. Romney’s plan is focused on corporate tax cuts, not too unlike most other mainstream conservative plans that were waved about before.
The reality is the tax code is riddled with loopholes. Many companies already pay close to zero taxes.
Companies in U.S. manufacturing and service businesses spent the last four years increasing productivity. It’s now at the point where they can meet higher demand with fewer people. So they’re not hiring.
So What’s a Cash-Strapped, Politically Gridlocked, World Power (the U.S.) to Do?
The solution is an easy one. That’s why Congress, the President and the Presidential wannabees can’t see it. The answer lies in one word: energy.
If you’re a regular reader, you know I’m a big energy guy. I like to read about, research, write and speak about everything energy. The world runs on it. Advanced societies and economies are used to having it. Emerging countries can’t get more of it fast enough.
When the flow of energy stops, catastrophe ensues. Take the recent freak snowstorm that knocked out power for three million people throughout the Northeast Corridor. Estimates are that it could now cost as much as Hurricane Irene in lost GDP. Some areas won’t get power back for a week or more.
So wouldn’t it be great if we could somehow combine our need for cheap, homegrown sources of energy with the need for more jobs?
Wouldn’t it be even better if a “pilot program” already existed that demonstrates how thousands of Americans found new, high-paying jobs? Something that could be expanded to the national level?
If only such a program was happening today, somewhere that we could point to… Well we can. It’s right here in my home state of Pennsylvania.
Pennsylvania is doing exactly what Obama and the rest of the Washington politicians are wasting billions of taxpayers money time trying to figure out: creating jobs.
Consider these Keystone State statistics, just for the natural gas industry:
- 9,000 new hires in Q1 2011.
- 18,000 new hires in Q2 2011.
- 214,000 total jobs related to this activity as of the end of Q1 2011.
- Average wage: $76,036 per year.
- As of the end of August, there were 3,600 new job postings online.
It all boils down to an increase of 2,076 in core jobs for the northern tier of Pennsylvania. These jobs are all in the energy business. All these happy workers are involved in the extraction of oil and natural gas from the Marcellus Shale formation.
And this industry didn’t even exist here five years ago.
Kathryn Klaber, President and Executive Director of the Marcellus Shale Coalition (MSC), made these remarks in a press release a few weeks ago:
“While our nation continues to face historic economic challenges, our industry – made up of tens of thousands of Pennsylvanians – continues to grow at unprecedented rates, helping to provide good jobs at a time when they’re most needed.
“This new data further reinforces the undeniable fact that responsible, American natural gas production is an unmatched private sector job creation machine.
“We take seriously our important work in the Commonwealth [of Pennsylvania], and realize we have an historic opportunity and responsibility to build on this progress in a way that ensures our environment is protected, our economy is strong, and our nation is more secure.”
Perhaps the President, the 2012 candidates and the rest of the U.S. Congress missed the press release.
And the same levels of job growth are happening in Texas, North Dakota, Colorado and just about every other state that’s drilling for natural gas and oil in shale formations.
A study released by the American Petroleum Institute back in September estimated that – with the right development policies – the U.S. oil and natural gas sectors could create one million new jobs in just the next seven years, and 1.4 million by 2030.
All those new jobs would generate roughly $800 billion in sorely needed government revenue by 2030. The U.S. Chamber of Commerce released a similar study, citing “producing more American energy” as one of its top six ways to create more jobs.
So Mr. President, and Members of Congress, there you have it: You want jobs? You’ve got the power to simply create them. And it won’t cost a dime of taxpayer money in misguided subsidies to do so.
Just grease the skids with some energy-friendly policies on the national level and you’ll have what seems to be so elusive: putting Americans back to work.
Article by Investment U