Clean and Dirty

Political choices and policies have consequences. The choices made in the last 40 years have had serious consequences for the job market and balance of trade position of the United States. We’ve made a concerted effort to protect the environment, or "endangered" animals. We do less manufacturing and have greatly reduced our utilization of natural resources.

With the current administration, this campaign has ramped up. It is becoming virtually impossible to drill for oil anywhere in or near the United States. The Alaskan National Wildlife Refuge (ANWR) has been off-limits for years; coastal areas have been off-limits with drilling allowed only further out and in deeper water. The commission established to report on the Deep Horizon spill has no one with a background in oil drilling. It is full of people from environmental organizations committed to stopping drilling. Oil companies are already pulling equipment out of the Gulf. In a congressional hearing (on C-SPAN) Louisiana parish officials are talking about losing 60% of their government’s revenues. They also talked about layoffs and the "lucky" workers who have been offered a chance to go with the drilling equipment to new locations.

The next battle is over shale oil. The Canadian government allows the extraction of shale oil. The United States continues to halt licensing or close off areas to shale oil extraction. There are moves to block the transport to and through the US of Canadian oil obtained this way.

The same restrictions are applied to the lumber industry and even farming. Farms in central California are drying up in order to protect a fish which could be harmed in the pumps used to fertilize the region. Jobs are lost, farmers are going broke and the food supply is harmed.

Manufacturing is being reduced in part because of labor costs, but also because of obstructionist techniques to block their construction. The drive to increase energy costs also impacts the development or maintenance of factory jobs.

Andrew Grove of Intel recently warned that we cannot keep technical knowledge and design skill when the manufacturing is not done here.

[When] technology goes from prototype to mass production … companies scale up. They work out design details, figure out how to make things affordably, build factories, and hire people by the thousands. Scaling is hard work but necessary to make innovation matter.

The scaling process is no longer happening in the U.S. And as long as that’s the case, plowing capital into young companies that build their factories elsewhere will continue to yield a bad return in terms of American jobs.

Without the plants, something more important happens. As Mr. Grove puts it, "what kind of a society are we going to have if it consists of highly paid people doing high-value-added work — and masses of unemployed?"

The goal of "clean jobs for everyone" is unrealistic. People have different skills. Many people need an opportunity to work with their hands or exercise non-academic skills. A society that wants everyone to have a nice white-collar job leaves many people out of the picture.

We have been fortunate to be able to ignore another aspect of this situation. The United States and her allies paid a high price to win World War II, but it could have been higher. The allies had access to oil and other resources. Germany moved against Russia, in part, to get access to oil. The Japanese tried to expand their empire to get more resources.

The dominant factor in World War II was the ability of the United States to serve as "the Arsenal of Democracy." American factories were converted and ramped up to produce an extraordinary supply of ships, tanks, planes and other supplies. As the war moved on, we could be almost profligate in our use of supplies. The Axis countries found themselves unable to replenish their inventory.

What would happen if today’s America were in a full-scale "war for survival?" We rely on high-tech devices to a remarkable degree. How could we make them if all the current plants are overseas? How would we obtain the necessary oil when we currently import a huge percentage of our oil? Could we gear up refinery capacity when we haven’t built a new refinery in years?

Our "clean jobs" goal is unrealistic and dangerous. We need to utilize all our resources, human and mineral. We need enough skilled factory workers to keep our technology at the forefront, or our "value added" jobs will disappear. We need a high level of employment for the financial and political survival of the system. And, we need to effectively use our resources and keep our skills honed to handle whatever geopolitical problems may come.