Drilling is a win, win choice for U.S.

Obama’s op­po­si­tion seems based more on faith than facts

The Washington Times Daily - - Opinion - By Deroy Murdock

When the sum­mer driv­ing sea­son starts soon, and ten­sion heats up about Iran, gas may reach $5 a gal­lon. Noth­ing both­ers vot­ers more than pay­ing an ex­tra $20 or $30 ev­ery time they fill up. In times like these, they soon might pre­fer even an oil­man in the White House to an ide­o­logue whose op­po­si­tion to new oil de­vel­op­ment seems more re­li­gious than em­pir­i­cally based.

All pres­i­dents, of course, usu­ally get the blame when the price of gas sky­rock­ets and praise when it plum­mets, just like they own a bad or good econ­omy, or a suc­cess­ful or failed war.

Pres­i­dent Obama, how­ever, earns ad­di­tional blame for the gas rise for rea­sons well be­yond the nor­mal oil bo­gey­men — ten­sion in the Mid­dle East, ra­pa­cious OPEC dic­ta­tors, oil com­pany greed and Wall Street spec­u­la­tion.

Why? Amer­i­cans re­mem­ber that his team boasted about want­ing higher en­ergy costs in 2008, when Mr. Obama was still bask­ing in ho­pe­and-change adu­la­tion. Steven Chu, then the en­ergy sec­re­tary-des­ig­nate who doesn’t own a car, pon­tif­i­cated about want­ing higher Amer­i­can gaso­line prices, hop­ing they would some­how reach Euro­pean lev­els.

Can­di­date Obama breezily warned of sky­rock­et­ing en­ergy prices — the nec­es­sary cost of his planned cap-and-trade, anti-glob­al­warm­ing leg­is­la­tion.

Sen. Ken­neth L. Salazar, Colorado Demo­crat who was soon to be­come In­te­rior sec­re­tary, bragged that even if gas reached $10 a gal­lon, he would not vote to open up new fed­eral off­shore oil leases.

Once upon a time, Mr. Obama and his sup­port­ers be­lieved that high gas and oil prices were ei­ther help­ful in en­sur­ing that fa­vored sub­si­dized green en­er­gies would be cost com­pet­i­tive, or that they helped the en­vi­ron­ment. That’s why a now-em­bar­rassed Mr. Obama digs in by mock­ing op­po­nents who call for in­creased drilling.

A pres­i­dent, so Mr. Obama claims, has lit­tle con­trol over gas prices. New do­mes­tic sup­plies of oil would not come on the mar­ket for years. Amer­i­cans con­sume a quar­ter of the world’s oil sup­plies while pos­sess­ing only 2 per­cent of global re­serves. In a global oil mar­ket, ad­di­tional Amer­i­can drilling would not make that much of a price dif­fer­ence.

All of these claims are ei­ther flat wrong or mis­lead­ing.

Pres­i­dents can af­fect gas prices, at least in the long term, by ex­er­cis­ing bud­getary dis­ci­pline re­sult­ing in a cur­rency that buys more oil per dol­lar, by ap­prov­ing or re­ject­ing fed­eral oil leases, and by adding or curb­ing reg­u­la­tions that af­fect oil ex­plo­ration and de­vel­op­ment. In all of these cases, Mr. Obama has sup­ported poli­cies that con­trib­ute to higher gas prices.

The point about the lag time be­tween find­ing and pump­ing oil is valid. But that re­al­ity is pre­cisely why pres­i­dents must green-light ex­plo­ration for fu­ture gen­er­a­tions — and why Mr. Obama is now brag­ging of record U.S. pro­duc­tion only be­cause of his pre­de­ces­sor’s grant­ing of fed­eral oil leases. Mr. Obama’s “it takes too long” ar­gu­ment is ab­surd — as if farm­ers should never plant new or­chards be­cause they won’t see fruit on their trees for three years or more.

Mr. Obama’s knowl­edge of U.S. re­serves is 20 years out of date. In the first three years of his ad­min­is­tra­tion alone, new finds off­shore — in Alaska, in the Gulf of Mex­ico, and in un­ex­pected places such as North Dakota, Penn­syl­va­nia, New York and Ohio — have rev­o­lu­tion­ized Amer­ica’s en­ergy fu­ture in ways un­dreamed of just a few years ago. We prob­a­bly have 100 years of nat­u­ral gas sup­plies at present rates of con­sump­tion and could cut our im­ported oil by 50 per­cent in a few years.

Even Mr. Obama does not be­lieve his own dis­missals of the role of global sup­ply and de­mand in set­ting en­ergy prices. In a tight world oil mar­ket, just a few mil­lion more bar­rels a day pro­duced any­where — or even the in­di­ca­tion that a ma­jor pro­ducer such as Amer­ica might soon put 2 mil­lion or 3 mil­lion more bar­rels a day on the mar­ket — can help sta­bi­lize prices. That’s why Mr. Obama is con­sid­er­ing tap­ping oil daily from the Strate­gic Petroleum Re­serve while ask­ing the Saudis to pump a lit­tle more. Does the pres­i­dent be­lieve that more for­eign or pre­vi­ously pumped oil would lower world prices in a way newly pumped do­mes­tic oil would not?

Tech­nolo­gies such as frack­ing and hor­i­zon­tal drilling have made it pos­si­ble for Amer­i­cans to pro­duce their own oil and gas as never be­fore. We can pump oil with less en­vi­ron­men­tal dam­age than can Venezuela, Mex­ico and Nige­ria. New do­mes­tic pro­duc­tion would save a near-bank­rupt Amer­ica bil­lions of dol­lars cur­rently be­ing lost in im­port costs while cut­ting se­cu­rity ex­penses in de­ploy­ing forces to the Mid­dle East.

New oil de­vel­op­ment will cre­ate thou­sands of jobs, worry spec­u­la­tors that Amer­ica will soon re­lease lots of oil on the world mar­ket, and pro­vide a win­dow to pro­duce al­ter­na­tive en­er­gies with­out slapdash, Solyn­dra-like boon­dog­gles.

Drilling is a win, win and win choice — and so known to ev­ery­one ex­cept the pres­i­dent and his shrink­ing num­ber of re­ac­tionary ad­vis­ers, who pre­fer green faith to hard sci­ence.

NEW YORK — From coast to coast, politi­cians want to hike the min­i­mum wage. New York State leg­is­la­tors aim to lift it from $7.25 to $8.50 per hour. Cal­i­for­nia law­mak­ers are weigh­ing a boost from $8 to $8.50.

Ralph Nader re­cently urged the Oc­cupy move­ment to de­mand that the fed­eral floor in­crease from $7.25 to $10.

For­mer Mas­sachusetts Gov. Mitt Rom­ney told CNBC’S Larry Kud­low on March 6, “There’s prob­a­bly not a need to raise the min­i­mum wage.” In Jan­uary, how­ever, Gov. Etch-a-sketch said he would “al­low the min­i­mum wage to rise with the CPI [Con­sumer Price In­dex] or with an­other in­dex so that it ad­justs au­to­mat­i­cally over time.”

Trag­i­cally, these pro­pos­als don’t go far enough.

What Amer­ica needs is the eco­nomic equiv­a­lent of a 24-hour en­ergy drink. Why not a $100-an-hour min­i­mum wage?

If ev­ery worker legally were guar­an­teed this amount, just imag­ine the pos­si­bil­i­ties:

As­sum­ing 52 weeks of la­bor at 40 hours each, ev­ery Amer­i­can would earn at least $208,000 an­nu­ally.

This sum lit­er­ally would move the typ­i­cal Amer­i­can from rank-and-file to rich. To­day’s $40,584 av­er­age in­di­vid­ual in­come would quin­tu­ple. Why? Be­cause Washington said so. Rather than a na­tion in which the top 1 per­cent fears the rage of the 99 per­cent, Amer­i­cans could live har­mo­niously as 100 per­cent of work­ers would oc­cupy, at worst, the top 3 per­cent. Thus, the Class War would con­clude peacefully af­ter it barely be­gan.

Even greater ben­e­fits would flow like honey, if not like pan­cake syrup.

With at least $208,000 to spend an­nu­ally, each worker could buy tons of lux­ury goods. Tif­fany’s, Nord­strom’s, and Coach Stores could stay open 24/7 as hun­dreds of mil­lions of Amer­i­cans sud­denly could af­ford their pre­vi­ously pricey prod­ucts. The Four Sea­sons could fill ev­ery suite. And the air­lines could add ex­tra first­class seats, since trav­el­ing up front would be­come af­ford­able for ev­ery­one with a pay­check.

This su­per stim­u­lus would pro­pel Amer­ica’s GDP to Hi­malayan heights. A $100-per-hour min­i­mum wage would give Amer­ica’s 133 mil­lion work­ers at least $27.7 tril­lion in com­bined buy­ing power — ev­ery year!

Of course, this fig­ure will climb even higher as this hefty new wage in­spires vir­tu­ally ev­ery­one not work­ing to flood the la­bor mar­ket. With all the money that em­ploy­ers will make in in­creased sales, it will be a snap for them to hire Amer­ica’s 12.8 mil­lion job­less peo­ple, at a min­i­mum cost of some $2.7 tril­lion an­nu­ally. At long last, this will end — not mend — un­em­ploy­ment.

And con­sider the wind­fall for the gov­ern­ment! The U.S. tax code es­tab­lishes a 33 per­cent tax rate on ev­ery­one earn­ing $208,000. Ir­re­spec­tive of de­duc­tions, this would trans­late into roughly $9.1 tril­lion of in­come tax rev­enues ev­ery year. This Ni­a­gara Falls of cash could help Un­cle Sam pay his bills. Bye bye, na­tional debt!

Now, some party poop­ers might ar­gue that the gov­ern­ment has no right to tell em­ploy­ers how much to pay their em­ploy­ees. How­ever these naysay­ers for­get that the min­i­mum-wage law says noth­ing about how much to pay, just how lit­tle. Em­ploy­ers cer­tainly could pay em­ploy­ees more than $100 per hour.

Oth­ers may won­der where em­ploy­ers would find the money to fi­nance this mod­est pro­posal. This ques­tion is im­per­ti­nent and per­haps a lit­tle bit racist. Far worse, it lacks imag­i­na­tion. Af­ter all, imag­i­na­tion set­tled the Amer­i­can West, whisked Amer­i­cans to the moon, and even in­vented Straw­ber­ry­Daiquiri Jell-o. Where there’s a will, Amer­i­cans find a way.

Amid such my­opia, sim­ply lis­ten to Ge­orge Bernard Shaw. As he fa­mously put it: “You see things; and you say, ‘Why?’ But I dream things that never were; and I say, ‘Why not?’” With words like that, who needs a magic wand?

A $10 or even $12 hourly min­i­mum wage rep­re­sents the kind of small-mind­ed­ness that sub­verts the Amer­i­can Ex­pe­ri­ence. $100 an hour re­flects the bold­ness that built these United States. And just imag­ine the beauty of a $1,000-an-hour min­i­mum wage.

Come on, Amer­ica. Think big. Think re­ally, re­ally big!


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